Nokia is one of the largest telecommunication manufacturer companies in the world. They are recognized globally for their reliable and high quality products. Though they are a pioneer in manufacturing mobile phones and the GSM technology, Nokia’s profitability has been on the decline in recent years. A reduction of market share in North America of thirty-five percent in March of 2008 to eight and one tenths percent in April of 2010 highlight’s Nokia’s decline (Wong, 2011).
Synopsis of the situation
Nokia has been on a steady decline for the last few years due to outdated product design and technology. On February 11, 2011, Nokia’s new CEO Stephen Elop announced a new mobile strategy to adopt Microsoft’s new but unproven windows phone as its primary smartphone operating system (Wong, 2011). Nokia’s flagship phone, the Vertu, has been a staple in the urban luxury market for the last eight years. Will Nokia’s loyal customer accept or reject this new move for their beloved devise.
Nokia was once an industry leader, but as of recently found themselves behind in the times. Nokia has several key issues that need to be addressed. The first is their shrinking market share and brand preference. The next issue is the inability to deliver innovative products in a timely manner.
Define the Problem
The Microsoft operating system is not a winning over the customers that Elop thought that it would. Nokia has one phone that has been their flagship item for the last eight years. It is believed that making the change to the Microsoft operating system on that phone will cause Nokia to lose the customers for that one popular devise.
One alternate solution that could be well received would be to scrap the Microsoft idea all together. The system could be replaced with the current Android smartphone operating system. Android has a proven track record and is even more popular and used than iOS6 which is Apples current operating system.
Selected Solution of the problem
The solution is to move forward with the production of the phones with the Microsoft operating system. Nokia has always been on the cutting edge of technology. They did not get to the place that they are by following the trends. Nokia is a company that sets the trends. Microsoft’s operating system is a viable option for the Nokia platform and
Implementing new technology in the workplace can be an advantage to current job performance levels. You may experience an increase in production and reduction of working man hours while adding considerably to the bottom line of the company’s income statement. This could be the shot in the arm that Nokia needs. Integrating this new technology in your current system without any disruption to the current workflow can prove to be challenging. You may run into problems with compatibility due to existing systems, hard-to-train workers or errors in the technology installation, all of which adds cost and time to the integration process (Simmons, 2011). There are approaches you can take to make the integration of the new technology as seamless and frustration-free as possible. It is just a matter of careful planning and the support of the workers and vendors alike.
It is my recommendation that the Nokia stays the course. The new and improved Vertu will be a greater success that its predecessor. It is time for the company to regain its place on top of the leader board in the industry, and this new decision could take them there. Nokia will never be at the head of the pack by following its competitors.
In conclusion, I feel that that the current CEO of Nokia, Stephen Elop, should take the reins of this company and lead it into a new era. Elop has solid ideas and sound vision for the direction of the company. I feel that the customers that have been loyal to Nokia will continue to be loyal to the company. These customers expect something new and exciting. That excitement is what led them to Nokia in the first place. It is Nokia’s job to fulfill that promise. There was some initial negative reaction to the news of the direction of the company, but you can always expect some adversity with change. We do not change because it is the easy thing to do; we change because it is necessary. It is necessary to evolve to remain in existence.
Simmons, L. (2011, June 26). How to integrate new technology into the workplace. Retrieved from http://www.ehow.com/how_8649447_integrate-new-technology-workplace.html Wong, K. (2011). The university of western ontario. Retrieved from http://cb.hbsp.harvard.edu/cb/pl/13869357/13869379/8c9f5c6e71f70c7e1656143f94c6f6dd
Figure 1. SWOT Analysis
Nokia’s SWOT analysis:
Worldwide leader in mobile phone sales
International research capability
Nokia also owns NAVTEQ
Good global reputation
Produces mobile phone infrastructure and other telecommunications equipment for applications Strong brand name
Slow to adapt
Capital structure is comprised of 64% debt ($25B) to 36% equity ($14B) Does not have the marketing and advertising presence in North America that it does in other countries
Expand their market share
People are interested in Telecommunication Market
Can build on their reputation
Cell phones are no longer luxury items
Lawsuits from Apple and Motorola