Case Study Description of Nokia India: Battery Recall Logistics
The case provides an opportunity for students to develop practical knowledge of the role of operations management in a product recall situation, particularly in an emerging market context. Product recalls are an integral part of supply chain management (SCM). Companies inevitably face a question of when, not if, a recall will be necessary. These situations combine the complexity of operations with the time-urgency of a mission-critical task. The case also provides a rich context to learn about the interaction of SCM, information systems and reverse logistics, and to understand the marketing, logistics and communication challenges faced by a multinational company operating in an emerging market such as India.The case presents the challenge faced by Nokia India in 2007. Nokia had built a strong brand reputation over a ten-year period and was a market leader in the Indian mobile devices. India, incidentally, was also Nokia's second largest market, next only to China. Suddenly, what corporate headquarters considered a routine product advisory for a defective battery, resulted in panic in customers after the Indian media widely publicized the potential dangers that defective batteries could pose.Over a three-month period, Nokia India had to recall a few million batteries and replace them with new ones.The objectives of the case include 1) developing an effective product recall / reverse logistics plan that would ensure preparedness for the challenges and urgent circumstances that might surface in a recall situation, 2) understanding the key criteria for success of product recall systems and 3) understanding the interface of management action and the logistics system under a crisis situation.
Authors :: Charles Dhanaraj, Narendar Sumukadas, P. Fraser Johnson, Monali Malvankar
Swot Analysis of "Nokia India: Battery Recall Logistics" written by Charles Dhanaraj, Narendar Sumukadas, P. Fraser Johnson, Monali Malvankar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Recall Nokia facing as an external strategic factors. Some of the topics covered in Nokia India: Battery Recall Logistics case study are - Strategic Management Strategies, Crisis management, Emerging markets, Supply chain and Global Business.
Some of the macro environment factors that can be used to understand the Nokia India: Battery Recall Logistics casestudy better are - – increasing commodity prices, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic ,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Nokia India: Battery Recall Logistics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nokia India: Battery Recall Logistics case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Recall Nokia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Recall 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 Nokia India: Battery Recall Logistics can be done for the following purposes –
1. Strategic planning using facts provided in Nokia India: Battery Recall Logistics case study
2. Improving business portfolio management of Recall Nokia
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Recall Nokia
Strengths Nokia India: Battery Recall Logistics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Recall Nokia in Nokia India: Battery Recall Logistics Harvard Business Review case study are -
Ability to lead change in Global Business field
– Recall Nokia 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 Recall Nokia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Recall Nokia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Recall Nokia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Recall 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 Charles Dhanaraj, Narendar Sumukadas, P. Fraser Johnson, Monali Malvankar 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 Recall 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.
Operational resilience
– The operational resilience strategy in the Nokia India: Battery Recall Logistics 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.
Ability to recruit top talent
– Recall Nokia is one of the leading recruiters in the industry. Managers in the Nokia India: Battery Recall Logistics are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Recall 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 Nokia India: Battery Recall Logistics HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Recall 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 Nokia India: Battery Recall Logistics - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Recall Nokia is present in almost all the verticals within the industry. This has provided firm in Nokia India: Battery Recall Logistics 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.
Superior customer experience
– The customer experience strategy of Recall Nokia in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Recall Nokia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Recall Nokia has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Recall Nokia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Recall Nokia has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Nokia India: Battery Recall Logistics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nokia India: Battery Recall Logistics are -
Low market penetration in new markets
– Outside its home market of Recall Nokia, firm in the HBR case study Nokia India: Battery Recall Logistics needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Recall Nokia supply chain. Even after few cautionary changes mentioned in the HBR case study - Nokia India: Battery Recall Logistics, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Recall Nokia vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Charles Dhanaraj, Narendar Sumukadas, P. Fraser Johnson, Monali Malvankar suggests that, Recall 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.
Slow decision making process
– As mentioned earlier in the report, Recall Nokia 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. Recall Nokia 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Recall 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.
Lack of clear differentiation of Recall Nokia products
– To increase the profitability and margins on the products, Recall Nokia needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Recall Nokia 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.
Interest costs
– Compare to the competition, Recall Nokia has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nokia India: Battery Recall Logistics, in the dynamic environment Recall Nokia has struggled to respond to the nimble upstart competition. Recall Nokia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nokia India: Battery Recall Logistics, is just above the industry average. Recall Nokia 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nokia India: Battery Recall Logistics 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 Recall Nokia has relatively successful track record of launching new products.
Opportunities Nokia India: Battery Recall Logistics | 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 India: Battery Recall Logistics are -
Building a culture of innovation
– managers at Recall Nokia 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 Global Business segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Recall Nokia can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Recall Nokia can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Recall Nokia is facing challenges because of the dominance of functional experts in the organization. Nokia India: Battery Recall Logistics 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.
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 Recall Nokia in the consumer business. Now Recall Nokia 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, Recall Nokia can use these opportunities to build new business models that can help the communities that Recall Nokia operates in. Secondly it can use opportunities from government spending in Global Business sector.
Creating value in data economy
– The success of analytics program of Recall Nokia has opened avenues for new revenue streams for the organization in the industry. This can help Recall Nokia to build a more holistic ecosystem as suggested in the Nokia India: Battery Recall Logistics case study. Recall Nokia can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Recall 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 Nokia India: Battery Recall Logistics - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Recall Nokia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Recall Nokia can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Recall Nokia to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Buying journey improvements
– Recall Nokia can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nokia India: Battery Recall Logistics suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Recall Nokia to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Recall Nokia can develop new processes and procedures in Global Business 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Recall Nokia 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 India: Battery Recall Logistics, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Nokia India: Battery Recall Logistics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nokia India: Battery Recall Logistics are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Recall 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 Nokia India: Battery Recall Logistics .
Environmental challenges
– Recall Nokia 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. Recall Nokia can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Increasing wage structure of Recall Nokia
– 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 Recall Nokia.
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.
Technology acceleration in Forth Industrial Revolution
– Recall Nokia has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Recall Nokia needs to keep up with the evolution of technology in the Global Business 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. Recall Nokia needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Recall Nokia can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Recall Nokia business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Recall 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.
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 India: Battery Recall Logistics, Recall 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 Global Business .
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 Recall Nokia in the Global Business sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Recall 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.
Weighted SWOT Analysis of Nokia India: Battery Recall Logistics 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 India: Battery Recall Logistics 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 India: Battery Recall Logistics 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 India: Battery Recall Logistics 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 India: Battery Recall Logistics 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 Recall Nokia needs to make to build a sustainable competitive advantage.