Thursday 18 October 2012

ASSIGNMENT ABOUT NOKIA STRATEGIC MANAGEMENT

CASE STUDY : LAST CALL SOURCES : FORBES ASIA, TECHNOLOGY : SMARTPHONE BY ELIZABETH WOYKEL, DECEMBER 2011 1. State Nokia CEO strategic plans. Stephen Elop, Nokia CEO in September 2010 join Nokia with a mission : Save the once world beating mobile phone company from oblivion. Nokia has been losing ground to Apple iPhone and to Google Android-based models from HTC, Samsung and others. Nokia CEO strategic plans Stephen Elop come out with 3 pillar strategies: i. To adopt Microsoft Windows Phone software for smartphone. Windows Phone is a family of mobile operating systems developed by Microsoft, and is the successor to its Windows Mobile platform, although incompatible with it. Unlike its predecessor, it is primarily aimed at the consumer market rather than the enterprise market ii. To focus on Nokia’s other handset business : affordable phones for emerging markets. iii. To support the other two. Elop decribes it as “investment in future disruptions”. This includes developing technologies that could become platforms, devices or software for upcoming phones. Two “horizontal elements” intersect the three pillar. One is the need to differentiate Nokia’s devices and services from its rivals. The other concerns changing Nokia’s culture to be more nimble. 2. Identify Nokia’s strategic actions in order to remain competitive against it rival. Nokia’s strategic actions in order to remain competitive against it rival are : i. To launch dual-sim handset and multiple card slots that let users toggle among networks, switching to whichever carrier has the lowest rates. ii. Nokia world the company added a new line of low-cost, Java-based phones. For example, this approach is popular in India and other developing market for example dubbed Asha, which have unsubsidized prices of $81 to $156. Nokia intends the Asha phones to be aspirational purchases; the name means “hope” in Hindi. Some models have touchscreens, some have QWERTY keyboard. They connect to the internet and download and run application. iii. Focus to CRM (Customer Relationship Management) and rubric of “urgency, accountability and emphathy ”. Encouraged employees to move faster, greater responsible and listen more to consumers, partners and one another. iv. Removed Nokia’s tendency to make decisions by committee. His first senior-level hire was a chief marketing officer, Jerri DeVard. She replaced Nokia’s “Brand Board” a group of 30-40 people who aften disagreed about marketing practices. v. Introduce new dawn for Nokia called Lumia 800 and mid-range Lumia 710. The phone are sleek, boldly coloured and sport a few Nokia-only features, including a navigation services and themed streaming-music channels 3. State the rationale of using strategy’s in the business. Rational to Nokia Rational of using the strategy of low-cost handphone that concentrating on a narrow price-sensitive buyer segment and on costs to offer a lower-priced product can be able to increase sales and attract average income customer. Microsoft Windows is primarily aimed at the consumer market rather than the enterprise market. The less expensive but in reasonable modern design and features nokia handphone. The strategy of low-cost provider that striving to achieve lower overall costs than rivals on products that attract a broad spectrum of buyers. The strategy also can attract middle-level customer such as dual-sim handset and multiple card slots can save customer’s budget, just using one handphone with multiple card slots and giving customers more value for the money by offering upscale product attributes at a lower cost than rivals Focused Differentiation is a strategy that concentrating on a narrow buyer segment by meeting specific tastes and requirements of niche members. For example, The Lumia 800, with vivid colors and a curved, black display, features Windows Phone's live icons on the home screen, which automatically update news, weather and Facebook feeds. Rational of using strategies in the business. By using strategies in the business, the company can focus is placed on the important things. The resources such as employees, time, talent and money are properly allocated to those activities that provide the most benefit. The company also can be able to aware of the changing environment as a foundation for needed change and analyze the internal business culture and evaluate its impact on the company's performance. They can recognize the impact the changing business environment is having on the company and affect the needed changes in direction. They become aware of the company's potentials in light of its strengths and weaknesses as well as to identify and analyze available opportunities and potential threats. Business strategies may bring about a needed change of direction of the company. Any strategic issues can be brought up for top management review and able to make clear decision and able to set more realistic objectives that are demanding and attainable. A need for better information for decisions making may be recognized and growth can be accelerated and improved. The need of business strategies is poor performing areas can be identified and eliminated as well as to gain control of any operational problems. The company can be able to develop better communications with those both inside such as employees and outside the company such as customers, suppliers, bank, government, non-government organization and others. Strategies also provides a road map to show where the company is going and how to get there, develop better internal coordination of activities as well as develop a frame of reference for budgets and short-range operating plans. The company able to gain a sense of security among employees that comes from better understanding of the changing environment and the company's ability to adapt. Strategic planning is an essential activity for top managers in order to exercise of their own intuition is the only way to make decisions, formal strategic planning must become an integral part of their managerial activities. Strategic planning asks and answers some key questions in an orderly way, with a scale of priority and urgency. Such questions as the following come to mind: What is our basic line of business? What are our underlying philosophies and purposes? What are the company's long- and short-range objectives? Are they in balance? What products are going to be obsolete? How and when shall we replace the obsolete products?" Strategic planning introduces a new set of decision forces in a business. One of the great advantages of strategic planning is that it simulates the future. If the simulation does not result in the desired picture the exercise can be erased and started all over again. Strategic planning applies the systems approach. It permits the top management of the company to look at the enterprise as a whole and the interrelationship of parts, rather than deal with each separate part alone and without reference to the others. Strategic planning forces the setting of objectives. A strategic planning process will not get very far if at some point specific objectives are not set for such things as sales, profits, and market share. There is no doubt that individuals in organizations will generally strive hard to achieve clear objectives that are set for their organizations. They will strive harder if they themselves have had a hand in setting the objectives. Quite obviously, long-range objectives are more likely to be met if plans are carefully prepared to reach them. Strategic planning creates a channel of communication. A well-organized planning system is an extremely useful communications network. The planning process is a means for communications among all levels of management about objectives, strategies, and detailed operational plans, as noted previously. As plans approach completion, common understanding is generated among all levels of management about opportunities and problems important to individual managers and to the company. The choices made in the planning process are discussed in a common language and the issues are understood (or should be) by all those participating in decision making. Once plans are completed and written there should be a permanent and clear record of decisions made, who is going to implement them, and how they should be carried out. Strategic planning creates a sense of participation and helps train future general managers. A number of companies have understood that the strategic planning system is a management training process. Improved manager motivation and morale should accompany strategic planning. By helping to formulate plans managers should have a sense of satisfaction in at least a partial creation of their own destiny. They know what is expected of them, which when achieved brings a sense of satisfaction. As a conclusion, nowadays the most popular handphone in the world is Samsung. Stephen Elop had come out with 3 strategic pillar, aggressive management team and marketing but he have to come out with the extremely strategic in order to beat Samsung. aware of the changing environment poor performing areas can be identified able to gain a sense of security among employees, improve communication, effective decision making and creates sense of participation among employees. References Steiner, G. A., Strategic Planning, New York: The Free Press, 1979.

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