SWOT Analysis of Nokia
Nokia was founded in 1865, is headquartered in Finland, mainly engaged in the production of mobile communication products multinational, is the world’s third largest mobile phone manufacturer. February 2011, Nokia and Microsoft entered into a strategic alliance and the depth of cooperation.
Over the past few years, Nokia shares have gradually from London, Frankfurt, Paris and Stockholm stock market delisting. February 9, 2012, due to poor management, Nokia announced layoffs in three mobile phone manufacturing plant 4000. April 11, 2012, due to huge losses for several quarters, Nokia shares plunged 17 percent, the market value has shrunk $ 5 billion a day, to fall back to 1997 levels. In the September 3, 2013 Microsoft officially announced a $ 3.79 billion euros acquisition of Nokia mobile phone business, to 1.65 billion euros while the acquisition of its patent portfolio, which means that Microsoft’s acquisition of Nokia’s business and assets of the expenses totaled 5.44 billion euros (about $ 7.17 billion).
Nokia failed because of its long-term monopoly in the mobile phone market, resulting in a slack, underestimate the enemy emotions; enterprise bureaucracy has become popular, gradually lost self, lost the incentive to innovate. And in the mobile phone industry has changed, especially after the popularity of 3G mobile Internet revolution brought, Nokia has not been able to face changing market to make the right judgments.
Legal constraints, such as 3G, must be considered because many businesses plan to make a profit so they may be tempted to misinform their customers about pricing, products’ quality and the availability of their goods. Also, they may try to cut expenses by using lower quality materials in their products, such as weaker resources for Nokia cases and batteries. Also some companies may set out their waste in ways that harm the environment without ensuring high standards of hygiene and safety in the workplace.
Including, outlet stores, which are illegal and can cause legal problems for companies. In 2000, the UK Government started to accept bids from thirteen companies who wanted to run a licence to sell next-generation mobile phones. It raised £22.47, a neat sum to anybody. However, the companies began to refuse paying the huge amount of money for the licences. The UK auction was structured so that each challenger bid was planned to be a certain percentage higher than the previous bid. This unexpectedly resulted in the size of bids strengthening sky high at a rate of over 150 rounds of bidding.
Current economic indications, such as exchange, inflation rates, unemployment, gross national product can orient companies how to determine their policies. The other significant factor is the global economic situation for an international company such as Nokia. Considering the last two years of global handset devise market, there is a downturn in the sales.
The global economic recession and the related domestic economic crises are the most significant factors of shrink mobile phone industry. So its natural result is decrease of Nokia’s mobile phone sales. According to a resource firm, named Gartner, worldwide mobile phone sales decreased 8.6 % in the first quarter of 2009 compared with first quarter of 2008. Nokia’s market share dropped to 36.2 per cent to 39.1 per cent in the last quarter of 2008 (Gartner, 2009).
Nokia is not a company without a sense of crisis .Instead, Nokia has long recognized the existence of the crisis . IPhone, launched in 2007, Nokia was first proposed in the global transformation of the Internet strategy. Of all the mobile phone manufacturers , Nokia is the first high profile vendors need restructuring .
At the time, Nokia’s transformation direction can be attributed to Ovi – this has now been forgotten by many names. Concept Ovi by Nokia on August 29, 2007 and the company also announced a comprehensive restructuring strategy .In response to industry changes , the Nokia Ovi store via software programs , music , maps , mail, and N-Gage mobile gaming platform , five major business transformation to fully support the Nokia Mobile Internet .
In order to conform to Internet trends , Nokia also the first to make a lot of ” free ” move. For example in January 2010 , Nokia announced that its worldwide smart phone walking and driving navigation will all free. You know, a well-known high German navigation, Baidu navigation , etc., until the end of last month , was determined to totally free.
But Nokia seek self- transformation and the result is a failure. Some call it summed up the lack of mobile Internet genes, some say lack of execution , also said that Nokia’s big company disease dragged its own transformation . Anyway, Nokia does not rely on their own efforts to turn things around .
IBM not so computer
December 8, 2004, Lenovo Group in Beijing announced $ 650 million in cash and stock worth $ 600 million (total value of about 10 billion yuan) won including Think brands, including IBM PC business (PC Division). Completed, IBM Lenovo Group holds 18.5% of shares, while Lenovo Group Lenovo Holdings will occupy about 45% of the shares. According to the agreement, Lenovo also within five years, IBM’s brand. If successfully completed the acquisition of Lenovo, Lenovo will then become the world’s second only to Dell, Hewlett-Packard after the third-largest PC vendor.
Lenovo’s acquisition of IBM’s personal computer business before, its revenue was 30 billion U.S. dollars, after the merger is completed, the business volume reached $ 13 billion, so the company’s foreign operations accounted for more than 75% of all business proportion, legal risk has changed greatly . Another example was a very well-known Chinese enterprises in mergers and acquisitions, foreign workers paid after termination of the contract is almost equivalent to the original acquisition cost of all the funds.
Change management generally is difficult but no undoable. With a world closing in every day. not only international blue-chip companies are forced to critically reassess and. if necessary, change their business model, but also their organizational structure or their corporate culture. Most failed change projects underestimated or simply did not take into account the human factor.
To avoid this failure the assistance of change experts or change agents (in most cases professional consultants) should be sought. Not only that most employees have no or little experience in the field of change management. In most cases people are used to their environment and emotionally unwilling to change.