Nokia Internal and External Problem

External Problem

Thank you Tommy for presenting the internal problem and redesign methods.

Next, I am going to show you Nokia external problem and the recommendations

We believe that the biggest problem

Sold its handset business to Microsoft in 2014

Problem:

• If Nokia give up one of the core business by selling their mobile phone business to Microsoft
• Their competitiveness and their market share in mobile phone market would be decreased or disappeared.
• Since they sold their handset business to Microsoft. Microsoft would have a chance to run and test their own strategy in the mobile phone market. A new competitor will then be occured in the market if Microsoft successfully implement know about their strategy.

Re-design: Build Strategic Alliance

Since there is a high level complementarity between Nokia and Microsoft. If they Join together to pursue mutual benefits, They would provide resource for each other such as materials, funding, capital equipment, knowledge and expertise which we believe those resources are important for the company requires a lot of innovations

Since Telecommunication Company in an unstable environment, Nokia requires a lot of investment in R&D for their innovation. Thus,

Through building the strategic alliance Nokia is able to enjoy the economies of scale and scope. And this is good for Nokia to share expenses and risk with Microsoft through the Strategic Alliance.

2. Failure to understand and identify the changes in the environment

In 2010, the previously CEO, Stephen Elop decide not to use Android OS in Nokia OS. The reason for him to decide not had Nokia to join Android system is the

• High potential risk that someone would dominate the market.
• He was afraid of Apple and Samsung.
• He wants to be the third alternative – adopting window operating system.

We believe that staying away from competitions is not a good strategic, why don’t Nokia do something to compete with their competitors?

Redesign Method:

So we recommended that Nokia should create Boundary-spanning roles, keep in touch with what is going on in the environment so that top management can respond to market changes and other development.

Adapting Competitive intelligence to give top executives a systematic way to collect and analyze public information about the competitors and use it to make better decisions. As jack Ma said: Learn from the competitors