Contents:

1 Introduction

2 The overview of schools of strategy

2.1 The Planning School

2.1.1 History of ‘Nokia Corporation’ and conversation

2.1.2 Ansoff Matrix analysis

2.1.3 SWOT Analysis of Nokia Corporation

2.1.4 Limitation

2.2 The Positioning School

2.2.1 Porter’s Five Forces

2.2.2 PEST Analysis

2.2.3 Limitation

2.3 The Cultural School

2.3.1 Ashridge Mission Model

2.3.2 Limitation

3 YIP’s Global Drivers

4 Porter’s Diamond Strategy

1 Introduction:
In globalization, strategy plays an important role to achieve the goals and objective of an
organization. “Without a strategy, an organization is like a ship without a rudder, going
around in circles. It’s like a tramp; it has no place to go”. (Ross J and Kami M) Hence to
become competitive and successful in the market, managers should be very careful while
selecting the strategies for the organization to implement them. The determination of strategic
management is to generate news and diverse opportunities for tomorrow; long-term planning,
in contrast, efforts to enhance for tomorrow the tendencies of today.

In this research, the researcher will apply some global strategies models to help the Nokia
Corporation to take various actions to become more globalised in the world. This research
also illustrates some models like YIP’s global drivers, Porter’s diamond strategy, SWOT
analysis, Ashridge mission model, PEST analysis etc.

2 The overview of schools of strategy:

To become successful and survive in today’s market; strategic management is the key factor.
Each and every organization has its own strategies to become competitive. Henry Mintzberg
and his subordinates have identified ten schools which are divided into 2 groups, one is
prescriptive schools and the other one is descriptive schools. Prescriptive schools mainly
focus on the proficiency and strength to achieve the goals and objective of an organization,
while descriptive schools show profound vision of an organization. The first three schools-
Positioning, Planning and Design are prescriptive schools and other seven schools-
Environmental, Cultural, Entrepreneurial, Configuration, Learning and Power are descriptive
schools.

This research will take two prescriptive schools and one descriptive school, which are the
planning school, the positioning school and the cultural school to identifying and applying to
Nokia Corporation to approve this all models work help the company to achieve their goals
and objectives, and become globalized in the market.

2.1 The planning school:

The planning school is a part of prescriptive school which basically focuses on the formation
of strategy as a formal process. In simple term planning is to foresee and forecast the future.
The planning school follows a laborious set of phases from analysis of the situation to the
growth and development of an organization, and explore several alternative scenarios. It also
gives clear direction to an organization. So for an organization like Nokia, Planning school
became very important for an organization to become globalised and for the achievement of
their desired goals and objective.

2.1.1 History of ‘Nokia Corporation’ and conversation:

Nokia Corporation is established in 1871 which is headquartered in Espoo, Finland. Nokia
manufactures mobile devices with internet facilities. It is the world’s largest mobile
manufacturing company. It has around 132,000 employees over the 120 countries and at
present the revenue generated during 2010 is worth €42 billion and makes the profit of €2
billion. The vision of Nokia is “Connecting people to what matters empowers them to make
the most of every moment”. (http://www.nokia.com). So it is clear from the Nokia’s vision
that the company wants to become more globalised.

Basically planning schools focuses on the two models i.e. Ansoff Matrix and SWOT analysis.

2.1.2 Ansoff Matrix analysis:

“Ansoff Matrix is a strategic planning marketing tool which shows the linkage between the
companies marketing strategy and its general strategic decisions”. (Harvard business review,
1957). Ansoff Matrix is like table matrix divided in four parts.

Figure 1: Ansoff Matrix

As shown in the figure Ansoff Matrix is divided in four parts which are market penetration,
product expansion, market expansion, and diversification.

Market penetration: The aim of the company is to increase the sales volume in the existing
market. So to implement this, Nokia must follow few things such as providing discounts or
loyalty schemes to existing customers, changes in existing products etc.

Market expansion: The aim of the product is to sell their existing products into new market to
increase the growth. So to complete market expansion successfully, Nokia must follow few
steps such as reducing the current prices of the current products to attract the consumers,
changing the television adverts timing which helps the product to demand to a new
segmentation of market.

Product expansion: The aim of the company is to introduce new products into existing
market. So Nokia should establish the new technologies to attract the new customers. For e.g.
mobile phone with GPS system activated in it.

Diversification: To increase the sales volume and profit margin, company should offer
innovative products or something different to the customers. So Nokia should establish
something new technology to satisfy the customers.

So as per the researcher Ansoff’s model will helps Nokia to became more globalised.

2.1.3 SWOT Analysis of Nokia Corporation:

SWOT Analysis is a very successful marketing tool scheme to analyse the internal strengths
and weaknesses, and external opportunities and threats of the company. (Makippa M, 2004).

Figure 2: SWOT

STRENGTHS WEAKNESSES
• Strong brand name • Increasing wage costs forever
• Strong position in the market • Paying high supply chain
• Customer base diversification costs
• Most popular company • Aiming at saturated market
• Current market share segment
• Some products are not user
friendly

OPPORTUNITIES THREATS
• Improvement in technology • Powerful competition
• Entry in computers, • Growth of WLL network may
smartphones and phones affect the sales volume
• Re-invent their products by
using innovation

So both the analysis is related to planning school and is very important for an organization.
With the help of these two models and planning school, Nokia can plan their new innovative
products to new market to attract the new and existing customers, can restructure the process,
and can manage their programmes, schedules and budgets to achieve their desired goal and
objective.

2.1.4 Limitation:
Each and every model has some advantages and limitations, though planning school is very
beneficial it has some limitations also. Firstly planners may apply these strategies to compete
against their competitors which sometimes could be very risky for the business. Secondly, as
future is uncertain and planners use to plan their strategies as per the current economic
conditions.

2.2 The positioning school:

An organization which develops its strategic position within the company is known as the
positioning school. This school was founded in 1980 by Michal porter. This school is also
prescriptive in nature and focuses on the formation of strategy as an analytical process. Porter
focused on the structure of industries and their outcome on strategies. This strategy has been
applied by many successful companies to increase their brand image in the market. This
model is influenced by porters five forces strategy and PEST analysis.

For Nokia, the main competitor is Apple. Apple i-phone is more successful in United States
than any mobile devices of Nokia. A good business position is derived by the strength of the
company ( Porter, M.E, 1985), and strength is categorized into two ways i.e. differentiation
and cost leadership. Out of these two strategies differentiation matters as Apple i-phone is the
most expensive mobile device and provides video calling facility which Nokia have not
launched yet.

2.2.1 Porter’s Five Forces:

In 1980, Porter has developed five forces analysis which is still applicable in the market.
These five competitive forces give the snapshot of every industry and every market. The five
forces are shown in the figure 3 below.

Figure 3: Porter’s Five Forces:

1 Threat of new entrants:

When the competition is higher in an industry, it will be easier for other companies to enter in
the market. Barriers to entry are also high in technological or mobile phone sector.
Economies of scale also play an important role as a barrier to entry. Nowadays lots of mobile
companies are entering into the market so Nokia will encounter more competition than
before.

2 Threat of the substitutes:

Nokia has a brand image over the world, so there is no direct substitute of Nokia in mobile
phone industry. But growing mobile companies like Motorola or Sony may sell their products
at lower prices than Nokia, so threat of substitutes is high.

3 Bargaining power of suppliers:

Bargaining power of suppliers is low, as Nokia is the market leader in mobile phone industry
and has a strong position in the market.

4 Bargaining power of customers:

Nowadays customers are not directly purchase mobile phones from the company, but they
purchase handsets from service providers, so Nokia could encounter the durable bargaining
power of customers.
5 Competitive rivalries within the industry:

Mobile industries like Sony, Motorola, LG, etc. are growing very fast. So a rivalry within the
industry is high.

2.2.2 PEST Analysis:

Nokia is a classified international brand. The focus of Nokia is to become more globalized, so
Nokia need to focus on the environmental factors such as macro factors. Macro
environmental factors are directly connected to PEST analysis. It is compulsory for Nokia to
know about the current market situation in other countries. PEST analysis has four factors
such as political factor, Economic factor, Society factor and technological factors.

1 Political factor:

It is very important for Nokia to take certain decisions based on government. Today because
of the Finnish policies, Nokia become number 1 in home country and other countries.
(Zheng,2001). The economy of Finland is highly specialised and internationalised with the
help of public sector. As a result Nokia, an internationalised company has developed their
national growth and information society.

2. Economic Factor:

According to organization for economic and Co-operation and development, the fact was that
the Russian Federation was collapsed in 1990 and it also assailed the Finish economies. Due
to this, Nokia also have faced problems and change its overall function from single market to
global market and have focused on mobile phones.

3. Social Factor:

Some organizations do business only to earn profit. Some un-ethical issues are against the
law in which company cannot be involved, but some issue though it’s legal by law but can be
considered un-ethical by public or customers, industries which are involved in these practices
may lose the market share price if they are found out. For instance, in some countries
cosmetic testing of animals is legal but consuming public are not happy, so company must
know the taste and preferences of the consuming public. Nokia first have to do the market
research to know the preferences of new customers before entering into the new market.

4. Technological Factor:

In the mobile sector market, technology plays an important role, which Nokia have to take
into consideration. They have to do a lot of research about the taste of consumers, as
technology is growing faster and the numbers of competitors are also very high.
So both the analysis is related to positioning school and shows the current market situation.
Nokia must have use these strategies to plan and achieve for defining their generic position
within the industry and in the global market.

2.2.3 Limitation:
In an organization, the important decisions are always taken by the top managers or directors.
All these decisions which are taken are implemented by lower level employees, which may
cause the problems for instance discrepancy. So due to unsuccessful implementation, lower
level employees might get de-motivated. (Susanne, R, 2005). These strategies predict future
on the basis of current market situation which may change in future due to several reasons
and if the prediction is on the basis of past and presents situation than strategies are very risky
to implement.

2.3 The Cultural School:

Basically cultural school tries to input various departments and groups within an
organization. It reflects the corporate culture of an organization. This school is descriptive in
nature and focuses on the formation of strategy as a co-operative and collective process. This
model basically focuses on the role of beliefs, values, social processes etc. Some models like
ashridge mission model, cultural dimensions etc. are related to this school, so researcher will
take ashridge mission model to explain the cultural school of Nokia.

2.3.1 Ashridge mission model:

Each and every organization has its own mission statement. Nokia’s mission statement is
“Connecting People”. A mission statement is a pronunciation of an organization’s mission.
According to Campbell, mission statement is more harmful than good as they infer sense of
path, clearness of thinking. This model is a technique which helps to create mission
statement. This model contains four key elements which is shown in the figure below

Figure 4: Ashridge mission model

These all factors are tightly interlinked with each other to create a proper mission model. This
model emphasizes the desire for an appropriate mission statement between strategies and
values. It improves decision making process, raises energy levels, promotes productive
behaviour and increases satisfaction, motivation, and loyalty. The four key elements are as
follows:

1 Purpose: Purpose is beneficial for the shareholders, stakeholders and top managers of the
company. It shows clear vision of the selfish interest of the shareholders, stakeholders,
employees etc.

2 Strategy: Strategy is the commercial sense of an organization. It links purpose with

behaviour. It defines the clear business domain and identifies how attractive the mission is. It
gives competitive advantage to the company.

3 Values: Values shows the moral principles of the company’s culture. The wisdom of
mission statement arises when workers finds their personal beliefs associated with the
company’s values. It gives standards behavioural morals in an organization. Due to all this
reasons ashridge’s mission model is in diamond shape. It identifies the values between the
company and their employees.

4 Standards and behaviours: Standards and behaviours give clear guidelines to the employees
about the timings and working hours. It shows the character of the employees. It shows clear
snapshot of the company and captures the culture of an industry.

So as Nokia is a world’s leading mobile company they should use this model to analyse the
internal environment. The culture of Nokia is based on life cycle thinking. They should make
their devices very strong, increase energy efficiency etc. by using this model.

3.1.3 Limitation:
The commitment of values may create steadiness in the company’s behaviour and hence can
depresses the changes in strategy. Ambiguous, can forage resistance to change and can be
distorted to rationalize status-quo.

3 YIP’s Global Drivers:

In modernization, there is a rapid increase in global trade which is explained in the YIP’s
Global strategy by George S YIP (1992) who is the follower of Michael Porter. To enter and
become successful in the global market, the three important steps should be taken into
consideration which is as follows:

1 Develop the corporate strategy as a justifiable competitive advantage.

2 More involvement in global business or in other words internationalization of the core

strategy.

3 If the global strategy is powerful, company will not have to adapt the local market needs or
in other words the combination of the industry’s business practices, managerial culture etc.

YIP’s global drivers are based on these three concepts and Nokia should follow the YIP’s
model to become more globalised. YIP’s four global drivers are shown in the figure below.

Figure 4: YIP’s Global Drivers

1 Market Globalization drivers:

There is always a convergence of taste of customers which creates opportunities to

standardise the product in the market. Global channels also play an important role i.e. global
man may buy products in low price in one country and sells at higher price in another
country. So Nokia must do this to become more globalised.

2 Cost Globalization drivers:

Some businesses must be global such as mobile phone companies, newspapers, fast food
chain stores etc. which means by participate in multiple markets, the economies of scale and
scope at a specified location can be increased. Sometimes it will become cheaper to develop
the international products than the national products. Furthermore average cost can be lower
as costs and skills are different in some countries. So the researcher would suggest Nokia to
apply this driver as it is more effective to become globalised.

3 Government Globalization Drivers:

The main advantages of government globalization drivers are technical standards,

dismantling of communism, more liberalisation of trade etc. Technical standards create more
opportunities for the standardisation of product. So Nokia should follow all the rules and
regulations.

4 Competitive globalization Drivers:

All the three drivers such as market, cost, and governmental drivers are eventually static for a
company to any given time, but competitive drivers are utterly in the monarchy of competitor
choice.

So YIP’s framework helps Nokia to know about the market situations, cost effectiveness and
global competitors. This framework is used to analyse the industry and market. It permits
identification for both global and local drivers.

4 Porter’s Diamond strategy:

Porter’s diamond strategy shows that why some countries are more competitive than other
countries and why some companies within the nations are more competitive than others.
Porter introduced this model to examining the areas of strengths and weakness of an industry
within a country, or a country a competitive advantage or limitation. This model includes four
main elements which are shown in the figure below.

Figure 5: Porter’s Diamond strategy:

1 Factor conditions:

Factor condition is the situation of an country regarding their factors of production such as
skilled labours etc. which is pertinent for competition in an particular organization. These
factors can be gathered into material, human, knowledge and capital resources. So porter said
that these factors are not necessarily inherited as factors may change or develop.

2 Demand conditions:

It describes the demand for goods and services produced in the country. A powerful trend
local market helps native firms to anticipate global trends.

3 Related and supporting industries:

When the native supporting firms are competitive, than company enjoys more effectiveness
of cost and the inputs of innovative ideas. This effect will become strong when dealers
themselves are powerful competitors.

4 Firm strategy, structure, and rivalry:

The local market conditions can affect the strategies of a company. Local rivals forces
companies to move beyond elementary advantages that the native country may enjoy for
instance low factor cost.
So Nokia has to take these four factors to eliminate the situation of market. Nokia has
132,000 employees which show that factor conditions are excellent in all the countries. As
Nokia is user friendly all over the world, the demand condition is also very high. Recently
Nokia make a deal with Microsoft to manufacture windows mobile phone device. Rivalry in
Europe pushed Nokia into innovation which resulted in quick cost reduction.

5 Global Strategic decisions:

Today Globalization is one of the most challenging trends in mobile phone market. New
mobile base industries are coming rapidly fast in the market over the last decade. The
durability and purity of mobile phones is highly prejudiced by variation in customer
preference and behaviour. Entrants in the market such as Apple, Samsung, Motorola, Sony
creates more competition for the Nokia. Many mobile companies have tried to enter into
global market but failed to launch themselves. So to improve managerial strategic decisions
and compete with the competitor’s researcher has suggested few models to Nokia
Corporation to increase their brand name and image. This will helps Nokia management to
correct some decisions in terms of corporate and global strategies to evade the problems
which may arise from unaccustomed of new market of each country that Nokia has expanded
into it such as new competitors, entrants, customers etc. In late 1990s due to collapse in
Soviet union, Finland’s economy was also affected which directly took an impact on Nokia.
But in 1994 Nokia came up with new electronic device called as Mobile phone and become a
brand market leader in mobile sector within few years.

Furthermore Nokia should think to compete Apple as Since last two years Apple i-phone is
widely used in the developed countries. They should provide a new mobile device which can
compete i-phone. Though Nokia has tried and launch N8 with 12 megapixel camera and 5.5
touch screen but won’t get success as i-phone is in the heart of each and every youth. SO
Nokia should apply these models to compete with its main competitor Apple and become
more successful.

6. Conclusion:
From the research it has been found that, as globalization is growing faster, Nokia managers
should have a global mind-set as traditional way of business becomes invisible nowadays.
And Globalization forces top managers to construct the strategies globally. A combination of
these strategies and international business is resultant in strategies of worldwide cooperation.
For instance, Nokia Corporation is working with Microsoft to launch a new mobile phone
with windows operating system.

Furthermore it can be said that smartphones will have created a massive impact on other
mobile companies. Nokia has its own climate strategy which includes precise target covering
sectors that contribute directly to their indirect emissions. They focused on four main areas
such as products and services, operations, facilities, leveraging mobile and computer-
generated tools in the way of employed and management practices. They provide
independent assurance for some important targets.
So Nokia Corporation is the well-known mobile phone manufacturer all over the world. In
2011 Nokia has 300 million active users. They have direct and continues relationship with the
customers. So from all this we can say that Nokia has participated more actively in the global
market. It has proved that it is very much successful in 120 countries and trying to become
more globalised in other countries as well.

References:
Books:
1 Fred R David, Strategic Management, 13th edition, Pearson

2 Koch R, The financial times guide to strategy- how to create and deliver a useful strategy,
Prentice hall

3 Ansoff, Corporate strategy, 1965

4 Mintzberg H, Lampel J, Quinn J B, Ghoshal S, The strategy process- concepts, contexts

and cases,2003, pearson education

Bibliography:
Books:
1 David F R(2011), Strategic management concepts, 13th Edition

Internet:

1 http://www.bizsum.com/strategysafari.htm

2 http://www.nokia.com/results/Nokia_results2010Q4e.pdf

3 http://www.businessdictionary.com/definition/Ansoff-matrix.html

4 http://www.soopertutorials.com/business/marketing/1787-intensive-growth-
strategies-ansoffs-product-market-expansion-grid-2.html

5 http://www.scribd.com/doc/11986275/Promotional-Strategies-of-Nokia