"Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence
Nokia has dominated the mobile handset business for over 20 years. But as mobile technologies evolves and the consumer focus shiftsfrom handset design towards software and content platforms, it creates an opportunity for new players, such as RIM, Apple and Google, to enter the market and challenge Nokia's position. This case examines the competitive situation in the mobile ecosystem and Nokia's attempt to redefine itself as an 'internet company' in 2008.
Authors :: Chen Wei-Ru, Javier Gimeno, . Workiewicz, Jose De La Torre
Swot Analysis of ""Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence" written by Chen Wei-Ru, Javier Gimeno, . Workiewicz, Jose De La Torre includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mobile Handset facing as an external strategic factors. Some of the topics covered in "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence casestudy better are - – increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing energy prices, increasing commodity prices, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels,
wage bills are increasing, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mobile Handset, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mobile Handset 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 "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence can be done for the following purposes –
1. Strategic planning using facts provided in "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence case study
2. Improving business portfolio management of Mobile Handset
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 Mobile Handset
Strengths "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mobile Handset in "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence Harvard Business Review case study are -
Innovation driven organization
– Mobile Handset is one of the most innovative firm in sector. Manager in "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Mobile Handset 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 "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Mobile Handset 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 "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Strategy & Execution field
– Mobile Handset is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Mobile Handset in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Mobile Handset in the sector have low bargaining power. "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mobile Handset to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence firm has clearly differentiated products in the market place. This has enabled Mobile Handset to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Mobile Handset to invest into research and development (R&D) and innovation.
Learning organization
- Mobile Handset 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 Mobile Handset is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Mobile Handset has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mobile Handset to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Mobile Handset 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 Chen Wei-Ru, Javier Gimeno, . Workiewicz, Jose De La Torre 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 Mobile Handset 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.
Diverse revenue streams
– Mobile Handset is present in almost all the verticals within the industry. This has provided firm in "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence 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.
High switching costs
– The high switching costs that Mobile Handset 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.
Weaknesses "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence are -
No frontier risks strategy
– After analyzing the HBR case study "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence, 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.
Skills based hiring
– The stress on hiring functional specialists at Mobile Handset has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Mobile Handset has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to strategic competitive environment developments
– As "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence HBR case study mentions - Mobile Handset takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High bargaining power of channel partners
– Because of the regulatory requirements, Chen Wei-Ru, Javier Gimeno, . Workiewicz, Jose De La Torre suggests that, Mobile Handset 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence, is just above the industry average. Mobile Handset needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– It come across in the case study "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence can leverage the sales team experience to cultivate customer relationships as Mobile Handset is planning to shift buying processes online.
High cash cycle compare to competitors
Mobile Handset 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.
Low market penetration in new markets
– Outside its home market of Mobile Handset, firm in the HBR case study "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Mobile Handset has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Mobile Handset even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Products dominated business model
– Even though Mobile Handset has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence should strive to include more intangible value offerings along with its core products and services.
Opportunities "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence | 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 "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence are -
Leveraging digital technologies
– Mobile Handset 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.
Loyalty marketing
– Mobile Handset 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mobile Handset 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 Mobile Handset to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Mobile Handset has opened avenues for new revenue streams for the organization in the industry. This can help Mobile Handset to build a more holistic ecosystem as suggested in the "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence case study. Mobile Handset can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Mobile Handset 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.
Building a culture of innovation
– managers at Mobile Handset can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mobile Handset can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mobile Handset is facing challenges because of the dominance of functional experts in the organization. "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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. Mobile Handset can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Mobile Handset 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mobile Handset in the consumer business. Now Mobile Handset can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mobile Handset can use these opportunities to build new business models that can help the communities that Mobile Handset operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Using analytics as competitive advantage
– Mobile Handset 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 "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mobile Handset to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mobile Handset with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Mobile Handset is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence, Mobile Handset 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 .
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.
Stagnating economy with rate increase
– Mobile Handset 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Mobile Handset.
Increasing wage structure of Mobile Handset
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Mobile Handset.
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. Mobile Handset can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mobile Handset 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 "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence .
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 Mobile Handset in the Strategy & Execution sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Mobile Handset has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Mobile Handset 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Mobile Handset needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Mobile Handset needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Mobile Handset can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence 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 "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence 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 "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence 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 "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence 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 "Nokia and the New Mobile Ecosystem: Competing in the Age of Internet Mobile Convergence 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 Mobile Handset needs to make to build a sustainable competitive advantage.
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