Business Strategy 商业策划.docx

Business Strategy 商业策划.docx

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BusinessStrategy商业策划

Course:

BusinessStrategy

Studentnumbers:

10123210

Studentname:

SONGSU

ModuleLeader:

PaulDavies

Submissiondate:

25thJuly,2011

Contents

IntroductionPage2

1–TheStrategicPositionofNokiaPage2

1.1-CompetitiveAdvantageAnalysisPage2

1.2-CompetitiveStrategyAnalysisPage5

2–ExternalInfluencesandDriversAffectingNokia

2.1-PESTLEAnalysisPage6

2.2-FiveForcesAnalysisPage8

3-TheValueAddingActivitiesofNokia

3.1-ResourceAuditPage10

3.2-ValueChainAnalysisPage12

4-TheSustainabilityofNokia’sStrategicPosition

4.1-ConclusionPage14

ReferencesPage16

AppendicesPage18

Introduction

Nokia,amobilephoneenterprisewasfoundedbyFredichIdestamin1865.Itthroughahalf-centurydevelopment,becomethelargesttelecommunicationsequipmentsuppliersallovertheworld.Nowadays,Nokiahasninefactoriesovertheworld,andannouncingwithMicrosofttoreachaglobalstrategicpartnership,MicrosoftlaunchedanewWindowsPhone7systemwillbeNokia'smainoperatingsysteminmobilephones（Nokia,2011）.

Inordertoknowaboutthecorporationstrategyanditssustainabilitycompletelyanddeeply,thisreportwillusesixanalysismodelstodemonstratethestrategyposition,keyexternaldriversandaseriesofothersquestionsofNokia.

Findings

1-TheStrategicPositionofNokia

1.1-CompetitiveAdvantageAnalysis

InordertocomprehendNokia’sstrategy,thestrategypositionoftheenterprisewillbeconsideredasapriority.Accordingto‘Generic’analysisbyMichaelE.Porter（1985:

13）,thestrategypositionofNokiawillbeconfirmedbasedontheanalysisofthecorporation’scompetitiveadvantageandcompetitivescope.Thedatawillbeshowedbelow.

CompetitiveAdvantage

LowCost

Differentiation

CompetitiveScope

BroadTarget

Nokia

NarrowTarget

（PorterME,1985）

Inordertocaterfortheworldmarketbetter,NokiaCorporationhasthirdpartylogisticscenter,whichcancohesionofallsuppliersusingoneinformationplatformtocommunicationeachother.Inaddition,Nokiaarrangeproducingdifferentlevelsofmobilephonesbydistinctabilitiesandskillsstaffindifferentcityareawhichmeansarrangethemorespecificstaffproducingtheupmarketmobilephonesintheircitiesandviceversa（YujingWang,2011）.Itwillbeseenfromthisthefirmofferslowcostproductstoabroadtarget.However,itcouldbearguedthatthelowcostproductsofNokiaonlyforitsstrategy,thefirmalsomustconsiderprovidingvariousproductsandservices.

Asforthebroadrangeofproductsofferedbythefirm,itisnotonlylowcostbutalsohasdiversity.Thecorporationhasinnovationfrequently,andnowfrequentlyNokiabeginssmartphonefightbackwithnewhandsets（BBCNews,2010）.ItclearlyshowingtheNokia’sinnovationanddiversitybasedonthedemandsofmarketandcustomers.

Similarly,Nokiaalsoneedsthemethodofdiversitytodevelopmentbetter.Early1990s,Nokiarecognisesthat,owingtotherestrictionsontheuseinmobilephonebusiness,causingthemobileconsumermarketlimitations.Becausethat,Nokiafindtheirculturalrootsandthebrandnewmarketsellingpoint,andputforwardthe"Human-Technology"strategy（ChunyangQiao,2010）.Thestrategychangepeople'smindsetofhigh-techenterprises,establishmentofbranddifferentiationandexpandeduseoftheproductareas.Specifically,Nokianotonlyagoodareawithothersimilarbrandsseparate,buttofindanewgrowthpointsofinterest,thebrandvalueriseinthewon,whilethemarkethasmadeprofits.Inaddition,thestrategyhaschangedpeople’sunderstandonthephone,whichisalimitedunderstandingofhigh-techcommunicationsproductsandthenmakingpeopleawareofthephoneispartoflife（ChunyangQiao,2010）.ItshowsthatNokiahasdiversityserviceandcompetitionstrategyandbroadmarkettargetstodevelopment.

InFebruary2011,StephenElopsaidthatthefinalchoiceoftheNokiamobileplatformmusthavesufficientdifferentiationadvantages（StephenElop,2011）.Hesaid“it’snotjustdifferentiationbutsustainabledifferentiation”（ChrisDavies,2011）.Asabigcompany,Nokiacouldnotrelyonpartners,sotheymustperformsustainabledifferentiationandinnovationtohelpthemdevelopingbetter.Sotheyhighlightthefirm’sknowledgeofitscustomersandabilitytodiversifyitsservicetomeettheirdemands.

NokiahaveworkingdifferentiationthroughEnvironmentalPerformance."I'dliketothinkthatthegeneralenvironmentalawarenessatNokiaishigherthaninotherglobalcompanies,"saysSonjaWeckström-Nousiainen,VicePresident,GlobalHumanResourcesDevelopment,NokiaMobilePhones.Long-termstrategymakeNokiahaveenvironmentinnovationanddiversityservice（Nokia,2011）.

Therefore,Nokiaenterpriseindicateslowcostproductsandbroadsaletargets,whichmeanthefirmowningadifferentiationstrategyintermsofitsproductsandservicestosatisfythedemandsofworldmarket.Sothefirm’scompetitiveadvantageissuccessfulbecauseofdifferentiation.

1.2-CompetitiveStrategyAnalysis

AccordingtoBowman’s‘StrategyClock’（Bowmanetal,1996）,itcananalyseNokiacorporationcompetitivepositionincomparisontotheofferingsofcompetitorswhichincludingthepricefactorsandperceivedaddedvalue.

Inthediscussionofcompetitionadvantageanalysis,Nokiashowsitsstrategyindifferentiation.Itcanbeseenthatthereisahighperceivedaddedvalueaboutitsproductsandservices.Duetolowcostofitsproductsandservice,Nokiacanconsiderthestrategyhybrid.

However,owingtothefirm’smissionthat“thefinalchoiceoftheNokiamobileplatformmusthavesufficientdifferentiationadvantages,andit’snotjustdifferentiationbutsustainabledifferentiation”（StephenElop,2011）.

Obviously,inordertobecomethemobilephoneleadershipovertheworld,Nokiadecliningproductspricetocaterfortheworldmarketwithoutbadquality.Conversely,itusuallycreateandinnovatingnewproductsforpeopletocometruethedifferentiation.Specifically,Nokiadecreasepricetoparallelwithcost,theyalsocanobtainprofitsandsharetheearlyinvestmentwhentheyeverytimetosaleoneproduct,whileasforthosecorporationwhichpaylessearlyinvestment,leadtothehighmaintenancecostandmaterialcostsothattheycannotsupportpricedecreasesituation.AllaboveanalysisshowsthatthestrategyofNokiaCorporationwouldbenumberfour,namelydifferentiation.

2–ExternalInfluencesandDriversAffectingNokia

2.1-PESTELAnalysis

Environmentdeterminesthedevelopmentofafirm’sstrategy.PESTELmethodcanaccuratelyanalysekeyexternalfactorsofthefirm.Accordingtotheanalysis,theenvironmentchangeshavebeendiscussed.

Political

Economic

Social-Cultural

vRiseinVATfrom17.5%to20%affectingthesupplychain

vApplicationforsuspensionofallcertificates

vGlobaleconomicdownturn:

vIncreasedsuppliercosts,incurredbyVATriseandinflation

vShipmentstoincreasebyonly10-11%

vPeople'sdisposableincomehasbeenimproved

vMobilityofthepopulationhasincreasing

vThemarketdemandshasincreased

vWiththeexpansionofthenetwork,addingmorenodesinthenetwork

Technological

Legal

Environmental

∙HandsetchipsuppliersisconcentratedinGermanyinstruments,STMicroelectronics,andIntelenterprises

∙Itisapioneerofmobilephoneoperatingsystemsuchassymbian，maemo，meegoandWP7

∙TheproductsaresubjecttogovernmentregulationsinUSA

∙ManyfieldswithintheEuropeanUnionsinglemarket

∙Toreduceradiationwhenusemobilephone

∙Tostablesignalwhenpeopleusemobilephonesindifferentenvironment,i.e.rainydayandincavern

∙Itisinfluencedbyitsrivalry

KeyExternalFactors

ThekeyexternalfactorsinfluencingNokiatendtoEnvironmentandTechnological,whicharedirectlyaffectthefirm’spositionandprofitability,howevertheothersfactorslikePolitical,Social-CulturalandLegalareindispensableonthefirmforitsdevelopmentintheworld.

WithregardtoEnvironmentaspect,itisobviousthatthefirmhasdisturbedbyenvironmentinmarket.Inotherwords,Nokia'smarketsharehasfallenmorethan14%sinceJuly2009,althoughitstillcommandsmorethanhalfthemarketinmanywesternEuropeancountries（JonathanFildes,2010）.Thereasonisitsrivalriesarefocusonthefirmandhaveastrongcompetitionwiththefirm.Inaddition,theriseinVATto20%willalsoincreaseextracostsandthefirmhastoraiseproductspricetokeeptheprofitsbalancesothatdecliningthefirm’sprofitsmargins.

AsforTechnologicalfacet,Nokiakeepitswaywhichusingdifferentiationtocreatetheflawlessproduct.Tothenewsystem“MeeGo”,StephenElopclaimedthat“Tobecomeaneffectiveecosystem,itmustalsobeabletoattractotherpeople,includingourcompetitorsinordertoreachacertainsizeandcredibility”（StephenElop）.

ItmeansthatElopconsidertheinnovationofnewsystemwillgivehimahugeconfidenttoperformbetter.However,owingtoitsthreerivalriesthreatcreatemorepersonalisedproducts,leadingtoNokiafallinadilemmasituation.Inotherwords,thefirmasthelargesttelecommunicationsequipmentsuppliersovertheworld,itstechnologycannotappealtocustomersandfoundthelimelightwhichislargeimpacttothefirm,ontheotherhand,thefirmcannotgiveupanychancestoimprovingitsdevelopment,consideringpeople’strendyandprice,Nokiamustfindawaytofititconductingmorecompetitiveproductstooccupythemainpositionovertheworld（NickClark,2011）.

Therefore,Nokia’