Nokia

SM374
Strategic Management and Leadership
Group Assignment

Sarah Moss
05007223
BA (Hons) Business Studies

Jerusha.Karunananthy.Selvadurai
08024110
Accounting and Finance

Matthie Gilli:
08020373
International Business Management

Artemiy Osipiyan
08023593
Finance and Investment management

Ashleigh Logan
06007636
Business with Human Resource Management
Overview
Nokia isan international company that operates in the communication industry. However for this strategic analysis we will concentrate on the largest area of this industry that Nokia produces for the Telecommunications industry. Nokia’s main role is the manufacturing and sale of mobile phones. It is estimated that ‘1.6 billion mobile phones will be sold in 2008’ (Nokia.com 2008) In 2007 Nokia held 38%market share making them the market leader, offering products for a variety of consumers. The product range of Nokia varies from standard handsets to high tech, high quality mobile phones targeted at teenagers, women, men and business people.

External Analysis

PESTEL Analysis
Political / Legal:
• downloading music illegally can make individuals liable for prosecution (at least in developedcountries),
• Possibility to register a patent, Nokia can secure a new technology to reduce the risk to be copied
• A contract with a network operator could be difficult to break the relationship. When buying a mobile, individuals are getting the phone at a reduced price or free on the basis on their contract, compared to if you buy “only” the mobile. So the issue with this situation isthat the longer you may be under contract, the longer you may not buy a new mobile

Economics:
• In the current economic climate most major countries, are now in a recession. This meaning people are less willing to spend.
• There is quite a saturated market; accounting for possible sales decrease
• Possibility to do Foreign Direct Investment especially in Asia to driveNokia’s cost down.
• In emerging countries (like in India for example) will have a high demand for Hi Tech product such as mobile phones. These emerging markets can be a place of development for companies in this industry.

Socio cultural:
• Downloading has become a popular trend, especially for teens and tweens; technology convergence allows the mobile phone industry to respond tothis demand.
• Fashion and the need to be cutting edge is a popular trend within consumers, need to aware of rapid changes in trends.
• Teens and tweens, are the key buyers of mobile phones, wanting to meet the demand among their peer groups, this is followed closely by women, who are know demanding hi-tech fashionable phones.
• There has been a rise in recent media issueslooking into the medical safety of mobile phone usage.
• Increase in demand for mobility, globalization seems people jetting from one place to another they need to stay in contact, with organisations or family.

Technology:

• Nanotechnology allows for the reduction in component size, making mobile phones more compact.
• Technology convergence (a mobile phone is integrating now acamera, Internet, platform for downloading). Apple released the I-Phone which was revolutionary: 100% touch screen with mp3 and camera uses. Becoming a popular trend amongst manufactures
• Standards of product and manufacturing of devises need to be followed (CE for example is a must for a mobile phone’s battery in the EU)

Environment:

• A lot of attention on organisations beingenvironmentally friendly, product should be manufactured within ISO 14001 standards,
• Recycling is hot topic at this period of time with issues around climate change. A number of organisations

Porter’s 5 Forces

Threat of New Entrants: VERY LOW
In this industry the threat of entrants to Nokia are relatively low because the cost of Research and development is high so it is very…