Nokia Company Strategy and Analysis

Solution Preview

1. Company History

Nokia is one of the leading mobile phone manufacturers in the world. The company produces and supplies mobile phones as well as other equipment and services for communications networks. Although its primary focus is in mobile phones, Nokia is comprised of two other business groups: Multimedia and Enterprise Solutions. The Mobile Phone group centers on the manufacturing, development and supply aspect of mobile phones. Multimedia focuses on creating applications for communication devices that allows connectivity over multiple technology standards. The Enterprise Solutions group is catered for businesses and institutions whereby Nokia offers communication systems and software for the companies.

Although headquartered in Espoo, Finland, Nokia’s areas of activity span many countries across the globe. The company has production units in Brazil, China, Finland, Germany, Great Britain, Hungary, India, Mexico and South Korea and their mobile phones are supplied throughout the world. In addition, the company is listed on the Helsinki, Frankfurt, and New York stock exchanges.

Managing this corporation, the Board of Directors currently consists of nine members who are elected at each Annual General Meeting. Following the Board’s annual meeting on May 15, 2006, the CEO, Jorma Ollila was released of his duties effective June 1st and in his place, former COO Olli-Pekka Kallasvuo was named as the new CEO.

2. The External Environment

The mobile phone industry has experienced tremendous growth and continues to enjoy profits as mobile phone use increases throughout the world. According to research firm In-Stat/MDR, about 186 million new mobile phone subscribers have signed up every year between 2003 and 2007 alone. The main companies in this industry are Nokia, SonyEricsson, Motorola and Samsung Electronics. Future growth in this industry relies on the Asia-Pacific region, China, the Middle East and Africa with growths expected to be more than 15%. The Nokia corporation expects the global market for mobile devices to grow 10 percent in 2009 to more than 1.2 billion, and that its share will also increase. The company also predicted that globally there will be 4 billion mobile subscriptions by 2010, bringing forward its earlier prediction that that number would be reached in 2011.

As of the first quarter of 2009, Nokia is still outselling its competitors in the mobile phone market by more than two to one, and the company's market share increased from the second quarter. According to the analyst firm, iSuppli and the International Business Times, Nokia currently controls 39.5% of the market.

It is important to note that it is becoming increasingly difficult to pinpoint the industry that Nokia and these other companies are in. This is because of the fact that as technology improves, the mobile communications, Internet, music, media, information technology, entertainment and consumer electronics industries are converging into one broader industry.

3 Development and Growth

On December 4, 2007, Nokia unveiled an impressive and ambitious plan to move beyond mobile phones and deeper into the world of Internet services, where it will compete more directly with Google, Apple, and Microsoft. The plan centers around the release of the company’s new website, Ovi.com which is aimed at becoming users’ one stop location for managing content and services they enjoy. The concept is for Ovi.com to provide a mobile social networking experience where users can share photos with friends, buy music online, play and buy games. All of this can be accessed through users’ mobile phones as well as through their PC’s. ...