Overview
The previous paper (Kirsten) examined Nokia as a mobile corporation, its strategic intentions, internal and external evaluations, customer expectations, and the impact of international crises on the company and its rivals. It was identified that Nokia is attempting to dominate the present markets despite fierce competition from other mobile manufacturing businesses such as Apple and Samsung. The other problem of the company lies in the fact that the buyer has considerable influence in the mobile sector. Yet, Nokia products are not user-friendly, and its materials have not been created sustainably (low price, customer needs) compared to other mobile manufacturers. Furthermore, Nokia has faced and continues to face significant technological challenges. Nokia failed to grab prospective markets like Japan and the United States. Sales and brand identification have suffered due to poor top-level management and a lack of vision in developing the Nokia tech stack. Finally, many political and economic influences have impacted Nokia’s business and supply chain, the most recent being the consequences of the COVID-19 pandemic and the Russian invasion of Ukraine in 2022.
Nevertheless, the company has several opportunities highlighted in the paper (Kirsten). First, there is a possibility to be more strategic to increase brand awareness and market share. Namely, Nokia is still a well-known brand with the capacity to transform its image. Moreover, university students are an ideal market for Nokia’s profits. Since the number of students continually expands, Nokia has a significant market opportunity to improve as a telecommunications firm. The audience of young people from developed nations should be its primary aim since developed countries have the infrastructural stability, technology, and mass population to desire Nokia’s product. The other opportunity for growing market share lies in expanding its 5G coverage. Fortunately, Nokia has recognized the environmental effect of the mobile sector and is working to mitigate climate change. Next, since mobile phones have become necessary in modern life, the threat of replacement items is negligible, and new entrants in the industry provide less risk. Due to Nokia’s current strategy of targeting countries with inexpensive goods, the company is projected to post positive growth in the following years as markets stabilize.
Strategic Alternatives
One can propose several strategic alternatives to Nokia, the first of which is to increase brand awareness among the audience of students in developed countries. This strategy will address the issue of low brand awareness and market share. As such, the firm’s primary objectives should be defined at the corporate level (Helmold, 2021). For Nokia, the corporate-level strategy, in this case, is to expand sources of revenue. This approach includes understanding and serving customer needs and increasing their confidence in the company’s services, which corresponds to Porter’s Focus generic strategy (Danisworo et al., 2021). Next, on the business level, it is necessary to define how the company will compete (Helmold, 2021). Hence, Nokia must invest in and develop its Customer relationship management (CRM). Customer loyalty, achieved by this approach, assists businesses in developing new markets for their goods or services, as customers can pay more for something they value (Dewnarain et al., 2018). Finally, the functional level involves specific projects to achieve the aforementioned objectives. In terms of marketing mix components, the proposed strategy needs to change its product to be user-friendly and set promotions for the students’ audience.
Furthermore, Nokia’s second strategic alternative involves investing in research & development (R&D) to furnish and implement advanced technologies. The strategy will leverage Nokia’s competitive advantage against its more cutting-edge competitors. At the corporate level, this alternative indicates improving efficiency by leveraging technology. In Porter’s generic strategy terms, the described approach falls into the category of differentiation strategy. This targeted strategy covers a wide range of products, from complete product variety to distinct characteristics inside a core product (Kabeyi, 2018). Next, the business level of the strategy supposes that Nokia employs a product differentiation approach to distinguish its products from those of its rivals by stressing key qualities of its products. It has been highlighted that Nokia’s target audience values user-friendliness and, at the same time, appropriateness for educational and professional activity, which means that the company should frame its R&D in this direction (Kirsten). Lastly, the functional level of the strategy implicates providing valuable skill training, a high-achieving environment, and streamlining the credit approval process, which is necessary for technological innovation (Guzmán et al., 2020). As for the marketing mix, the company needs to be primarily concerned with product development.
The third alternative strategy that can be proposed to Nokia is to change its supply chain and manufacturing process to lower production costs. This decision is especially crucial for further reducing Nokia’s product prices, which have been repelling the company’s potential buyers and preventing its market extension (Kirsten). The plan falls under Porter’s generic strategy definition of Cost Leadership at the corporate level. The Cost Leadership Strategy is one in which a company focuses on lowering the cost of delivering products or services to customers in order to be more profitable and hence invest in other aspects of the business strategy (Ali & Anwar, 2021). Moreover, Cost Leadership further influences business strategy, providing Nokia with the competitive advantage of affordable prices to vie with giants like Apple and Samsung. It supposes that Nokia adopts cost efficiency, proactive risk management, compliance, and identifying target regional opportunities. Hence, evaluation and change of supply chain and delivery services are needed. On the functional level, the approach implies risk management updates, personnel training, and an improved logistics plan. As for the marketing mix, the strategy involves changes in product, price, and place.
Strategic Selection
The top-line marketing strategy among described above for Nokia is the third one, which involves reducing manufacturing costs through the change of the supply chain and production process, as well as service delivery. However, the approach implies not only logistics improvement and product production process rethinking. The other important element of the change supposes that Nokia develops a new organizational infrastructure, which would include a product management team and marketing department. The marketing personnel is necessary for the implementation of the plan due to its ability to identify critical regional opportunities for improvement, as well as strategic decisions regarding the satisfaction of the new target audience’s needs (Morgan et al., 2018). In turn, the management department is necessary for the designation and assessment of the resources that are needed for the achievement of the strategic objectives. These include hiring staff with appropriate proficiencies, training the existing personnel, budget allocation, and other resource management.
The strategy mentioned above is the most preferred option due to several reasons. First, this approach incorporates the objectives that should be prioritized and implemented before any other strategy is considered. Namely, the organizational infrastructure that can effectively assess and address market demand and the customers’ needs is necessary for further improvements in staff regarding R&D. Moreover, appropriate market research and promotion is possible only after the company can provide what is needed for the customers. The other issue concerns the prices of the products, which should already be reasonable for the new audience proposed in the first strategy, which means that cost efficiency is necessary. Finally, it has been underlined that Nokia’s revenues have declined recently due to world crises (Kirsten). Thus, the strategy that aims to reduce costs of production and delivery will address the problem of profitability.
The presented strategy will solve some existing challenges and capitalize on the opportunities outlined in the previous paragraphs. One of the apparent problems that will be addressed is the lack of sustainability due to the inappropriate use of products. Next, the challenge of the disrupted supply chain due to the COVID-19 crisis and the Russian-Ukrainian war will be managed by modifying the logistics plan and adapting e-commerce approaches. Moreover, e-retailing will provide an opportunity to expand the market that has been out of reach for Nokia due to the absence of brick-and-mortar stores in multiple developed countries (Kirsten). The opportunity that the remaining brand recognition provides to the company lies in the fact that it will be more accessible to attain new suppliers while retaining loyal customers for revenue (Kirsten). Finally, the new student target audience provides a possibility for further rebranding after the company implements the strategy.
Strategic Objectives
The objectives for the identified priority strategy involve different actions. The first objective is to research the proposed quality and price in the mobile market in order to establish an aim regarding the desired proposition for the customer. To achieve this goal, Nokia has to find and hire qualified marketing and management staff and organize and communicate the research and assessment results, which could be done in half a year. The intent is needed for the further initiative of cost reduction and can be measured by the quality and quantity of the completed surveys. The next objective is to identify unproductive staff that could be reduced, unnecessary equipment expenses, and cheaper raw materials and utilities from another supplier to become cost-effective. The aim can be implemented in four months and measured by the closeness of the new expenses plan to the desired result in accordance with previous research on prices.
Next, the third objective concerns implementing the new plan of expenses. The necessary steps at this stage include negotiating and contracting with suppliers, replacing the inefficient staff, and providing solutions for cheaper production (Fragapane et al., 2020). This aim might take a year to be entirely achieved, while measured by actual expenses on the manufacturing and other elements that contribute to the price of the products. The final objective is to implement e-retailing practices that can extend Nokia’s market reach and provide more opportunities for delivery service. The goal should be implemented under the guidance of tech personnel, marketers, and managers in half a year and measured by the quantity of the launched platforms and chains for retail.
Marketing Mix Components
After the strategy has been defined, developing the marketing mix should help in planning a successful product line. Moreover, it aids in the conception, development, and implementation of effective marketing procedures and allows organizations to capitalize on their strengths while avoiding unneeded expenditures (Solimun & Fernandes, 2018). Hence, the first element that needs particular attention regarding the prioritized strategy of the product. Product development focuses on creating the best products and services for your target audience. Nokia’s services and goods must meet a specific customer requirement. Since the strategy is primarily concerned with the costs of production, the features and branding of the existing products might remain the same to allow the company to invest more resources and effort in its objectives. However, the composition and design of the firm’s items might alter due to the changes in the use of the raw materials and equipment. Thus, Nokia should primarily focus on providing nearly the same quality of the product while reducing its costs.
Next, the promotion element of the marketing mix should be discussed. Promotion is the process of informing the targeted audience about the service or product. It entails direct contact between vendors and potential customers. The promotion element is unnecessary for the implementation of the identified strategy. However, the company can still invest some of its resources to address this part as well since it needs to increase its revenue by selling more products. Since one of the objectives includes establishing e-retailing in its final stages, it is possible for Nokia to develop an advertising strategy for online platforms. The value of this marketing approach lies in its opportunities for gaining attention and sales from the targeted audience. Online advertising is especially effective since the new customers Nokia should attract are students.
Furthermore, price is the most crucial element of the four P’s in the proposed strategy. When determining the pricing of the product, Nokia must consider the competition in its target audience as well as the entire cost of the marketing mix. Moreover, it needs to estimate client reactions to potential product pricing. Since it has been emphasized that Nokia’s current prices are not affordable for the customers, it is necessary to lower them, which is possible through cost efficiency. Moreover, to encourage consumer spending, Nokia can offer discounts on their existing products so that to increase the number of sales, which will generate more revenue (Ertekin et al., 2019). Hence, when the new items, which production cost is already lowered, are proposed, the customers will be more eager to buy cheaper goods.
Finally, place elements involving gaining access to the appropriate distribution networks should take into account where buyers would anticipate finding an item or service like Nokia’s product. It has been identified earlier that Nokia should make the development of online selling platforms one of its priorities. Although brick-and-mortar places of sale are still crucial for the business, the targeted audience of the company, which is young students from developed countries, might prefer to use the internet to find goods. Moreover, there is a greater chance that they will encounter Nokia’s products on the internet than in physical space. As a result, the company should invest in renovating its website and investing in marketing on other e-retailers platforms.
Activity Summary
To summarize, the paper has identified the problems and opportunities of Nokia while proposing several strategic alternatives for its growth. The strategies involve focusing on the target audience, R&D opportunities, and reducing the cost of production. The most viable strategy in the case of Nokia concerns costs efficiency since it addresses the central issue of the company’s products and has the potential to improve revenues quickly, as well as lay ground for other strategies.
References List
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