Finland and Nokia: Creating the World's Most Competitive Economy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Finland and Nokia: Creating the World's Most Competitive Economy
Finland, with a special language and culture, has developed as a country in between the west (the Nordic region and Europe) and the east (especially its neighbor Russia). In the 1980s, a process started of moving out of an investment-driven economy into an innovation-driven one. With the collapse of the Soviet Union around 1990, Finland reached a crisis. This case covers policy changes made in the 1990s and how, by 2002, the country had managed to become one of the most competitive in the world. A large part of the success could be attributed to the dynamic telecommunications cluster--especially Nokia, accounting for some 70% to 80% of the cluster exports and the world leader in mobile phones. Nokia also reached a crisis around 1990.
Swot Analysis of "Finland and Nokia: Creating the World's Most Competitive Economy" written by Michael E. Porter, Orjan Solvell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Finland Nokia facing as an external strategic factors. Some of the topics covered in Finland and Nokia: Creating the World's Most Competitive Economy case study are - Strategic Management Strategies, Economic development, Policy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Finland and Nokia: Creating the World's Most Competitive Economy casestudy better are - – there is increasing trade war between United States & China, central banks are concerned over increasing inflation, increasing transportation and logistics costs, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, technology disruption,
increasing commodity prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Finland and Nokia: Creating the World's Most Competitive Economy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Finland and Nokia: Creating the World's Most Competitive Economy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Finland Nokia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Finland Nokia operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Finland and Nokia: Creating the World's Most Competitive Economy can be done for the following purposes –
1. Strategic planning using facts provided in Finland and Nokia: Creating the World's Most Competitive Economy case study
2. Improving business portfolio management of Finland Nokia
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Finland Nokia
Strengths Finland and Nokia: Creating the World's Most Competitive Economy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Finland Nokia in Finland and Nokia: Creating the World's Most Competitive Economy Harvard Business Review case study are -
Diverse revenue streams
– Finland Nokia is present in almost all the verticals within the industry. This has provided firm in Finland and Nokia: Creating the World's Most Competitive Economy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Highly skilled collaborators
– Finland Nokia has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Finland and Nokia: Creating the World's Most Competitive Economy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Finland Nokia
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Finland Nokia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Finland Nokia has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- Finland Nokia is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Finland Nokia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Finland and Nokia: Creating the World's Most Competitive Economy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Finland Nokia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Finland Nokia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Finland and Nokia: Creating the World's Most Competitive Economy Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Sustainable margins compare to other players in Strategy & Execution industry
– Finland and Nokia: Creating the World's Most Competitive Economy firm has clearly differentiated products in the market place. This has enabled Finland Nokia to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Finland Nokia to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Finland Nokia in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Finland Nokia has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Finland and Nokia: Creating the World's Most Competitive Economy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Finland Nokia is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Michael E. Porter, Orjan Solvell can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Finland Nokia are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Finland and Nokia: Creating the World's Most Competitive Economy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Finland and Nokia: Creating the World's Most Competitive Economy are -
Need for greater diversity
– Finland Nokia has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Finland Nokia, firm in the HBR case study Finland and Nokia: Creating the World's Most Competitive Economy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Finland and Nokia: Creating the World's Most Competitive Economy has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Finland Nokia 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Finland Nokia is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Finland and Nokia: Creating the World's Most Competitive Economy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Finland Nokia has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study Finland and Nokia: Creating the World's Most Competitive Economy, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Finland and Nokia: Creating the World's Most Competitive Economy, in the dynamic environment Finland Nokia has struggled to respond to the nimble upstart competition. Finland Nokia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Finland and Nokia: Creating the World's Most Competitive Economy HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Finland Nokia has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Finland Nokia supply chain. Even after few cautionary changes mentioned in the HBR case study - Finland and Nokia: Creating the World's Most Competitive Economy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Finland Nokia vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael E. Porter, Orjan Solvell suggests that, Finland Nokia is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Workers concerns about automation
– As automation is fast increasing in the segment, Finland Nokia needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Finland and Nokia: Creating the World's Most Competitive Economy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Finland and Nokia: Creating the World's Most Competitive Economy are -
Developing new processes and practices
– Finland Nokia can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Manufacturing automation
– Finland Nokia can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Finland Nokia in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Finland Nokia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Finland Nokia has opened avenues for new revenue streams for the organization in the industry. This can help Finland Nokia to build a more holistic ecosystem as suggested in the Finland and Nokia: Creating the World's Most Competitive Economy case study. Finland Nokia can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Finland Nokia to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Finland Nokia to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Finland Nokia to increase its market reach. Finland Nokia will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Finland Nokia has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Finland Nokia has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Finland and Nokia: Creating the World's Most Competitive Economy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Finland Nokia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Finland Nokia can use these opportunities to build new business models that can help the communities that Finland Nokia operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Finland Nokia can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Finland Nokia can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Finland Nokia can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Finland and Nokia: Creating the World's Most Competitive Economy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Finland and Nokia: Creating the World's Most Competitive Economy are -
Stagnating economy with rate increase
– Finland Nokia can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Consumer confidence and its impact on Finland Nokia demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Finland Nokia needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Finland and Nokia: Creating the World's Most Competitive Economy, Finland Nokia may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Finland Nokia can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Finland and Nokia: Creating the World's Most Competitive Economy .
Shortening product life cycle
– it is one of the major threat that Finland Nokia is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Finland Nokia in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Finland Nokia in the Strategy & Execution sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Finland Nokia has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Finland Nokia needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Finland Nokia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Finland Nokia high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Finland Nokia can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Finland and Nokia: Creating the World's Most Competitive Economy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Finland and Nokia: Creating the World's Most Competitive Economy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Finland and Nokia: Creating the World's Most Competitive Economy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Finland and Nokia: Creating the World's Most Competitive Economy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Finland and Nokia: Creating the World's Most Competitive Economy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Finland Nokia needs to make to build a sustainable competitive advantage.
