Nokia

Nokia

By 2003, Nokia was the market leader in terms of profitability and sales in the mobile industry. The company was ahead of other mobile companies such as Siemens, Erickson, Samsung and Motorola among other competitors. Nokia’s strategic intent since the early 1990s was to build a distinct competency for rapid response, product innovation and global brand management. The strategic intent was aimed at the creation of rapid growth in the core business in the mobile industry and among the telecommunication networks. The goal was soon achieved when Nokia expanded and ventured into new markets.

The company had undergone numerous challenges before becoming a world leader in the phone industry. The Nokia Mobile Phone (NMP), in 1990 was the smallest among the Nokia business divisions with 3051 employees and made annual sales of $500 million. Despite this, in the same year the under the management of Jorma Olilla, the NMP became the world second largest phone manufacturer. This was achieved in a period of one and a half years. At this point the greatest competitors to Nokia were Motorola and NEC. NMP’s market share was at 13 percent at the time. At the time the main users of mobile phones were business users who could reach the high prices (Vuori and Quy 46). The everyday consumer avoided getting the phones as they were very expensive and had limited functions.

Despite the ongoing limitations, the market was growing at a very high rate and this attracted the Asian competitors to the market. The analog standards around the globe however required a lot of equipment and technological use. The rise of the digital communication made communication much easier as it provided hope for uniform communication worldwide. The NMP was left at the dilemma of what technology to dedicate the most resources to.

The main focus of Nokia was to maintain its competency as it had been in the 1990s. To do this, NMP made valuable mergers across the industry and moreover made acquisitions to enable it increase on its economies of scale, have access to research and development resources and increase on its market share. The Nokia management had a strong belief in the acceptance of the digital technology and the importance of having uniform standardized communication all over the global networks. Nokia went into partnership with companies such as Alcatel, AT &T, and AEG for the sole purpose of development of the digital networks and telephones (Vuori and Quy 49).

One of the major successes of NMP on the global scale was achieved through the GSM digital standard.  There was also the urgent need for NMP to have rapid response towards the market demand that they faced. Nokia also had its focus on the building of a brand management. This management realized that phones would be the near future’s commodity. To achieve this, the company carried out more advertisements, brand image building and reallocation of resources across the globe. The strategies stated seemed successful as they placed Nokia among the top most admired brands.