NAME: PATRICIA S ZIOGARA

REG NO: M165430

PROGRAM: BUSINESS MANAGEMENT

COURSE: INTERNATIONAL BUSINESS MANAGEMENT

CODE: BM401

YEAR: 4.1
2.1). Analyze the global marketing environment for the telecommunications
industry with respect to telephony (mobile devices) from a macro perspective using
the Nokia case study as a guide and your own research. Apply the STEEPLE model
to undertake the analysis. [10 marks

Telecommunication is basically any communication over a distance, either via telephone,

wireless network, computer network, radio or other means-but conventionally it has been
used for telephone service. STEEPLE analysis is a strategic planning tool, which offers an
overview of various external fields and can be helpful when planning the strategic
positioning. Acronym for Social, Technological, Economic, Environmental, Political,
Legal and Ethical, constituting all major macro-environmental forces that have a direct or
indirect impact on the business operations and strategies of an organization (Frederic etal,
2011). These forces are present in the external environment of the organization, but are
essential to be analyzed in order to compete in the industry in the most profitable way.

Social/ cultural factors

Telecommunication has become a vastly important aspect of the daily life of the average
person. Customers need these packages to communicate with friends, partake in social
media challenges, buy products online, find stable careers and more (P.Macmillan, 2018).
The major cultural factor that has hurt Nokia has been the widespread adoption of
smartphones and the growing use of apps. Nokia’s decision to utilize the Microsoft
Windows Phone instead of Android limited its appeal to many customers. The
popular association of Apple with smartphones in some countries such as the United
States, has cut deeply into Nokia’s market by creating a generation of customers that
only buy one brand. In more recent years, Nokia has had to deal with the popular
misconceptions that there are only two brands of smartphone in the market, Apple
and Samsung, and only two operating systems: iOS and Android. This has kept many
customers from even considering Nokia products.
Technological
The entire telecom industry is based on technology and therefore technological changes
influence it deeply. It is the telecom sector that stands to gain the most from these
technological trends. For example, telephone companies install fiber wire in their builds
over copper now. Phones are becoming more compact, moving the telecom business into
a primarily wireless business. This ‘need’ leads to more investments in companies who
hold a strong influence over telecom developments in computers, smartphones, and
laptop. The problem was compounded by Nokia’s decisions to utilize the less popular
Windows Phone operating system and to stick with its own operating system. This
limited customers’ choices and made it difficult to sell Nokia products to younger
consumers. Nokia has not been able to significantly tap the potentially lucrative market
for other kinds of mobile devices such as tablets and wearable technology. This could
greatly reduce its competitive edge in the future.

Economical factors
Interest rates, inflation, and taxes affect the telecommunication industry. Expenses affect
the pricing per plan offered to customers too. Growth is dependent on the market
(customers) and technological advancements. Businesses are using the internet and
mobile phones for marketing. They create social media pages, advertisements on sites,
and digital marketing campaigns to reach customers around the world. For this reasoning,
jobs are opening up and increasing in the telecommunication industry. The happier the
economy is, the higher will be consumer spending on any product or service, (Cassell,
2004). Nokia lacks the vast economic resources available to some of its competitors, such
as Google, Apple and Samsung. In particular, Nokia seems to lack the research and
development capabilities that have enabled these companies to develop new devices and
tap new markets. The reason being that Nokia simply does not have the money to finance
extensive research and developments efforts like its competitors do.

Environmental factors
Smartphones are a large part of the e-waste generated every year. In the light of the level
of e-waste generated by both service and equipment providers, the industry is focusing on
waste management and minimizing its environmental footprint. More and more providers
are investing in reducing their carbon intensity. Climate changes and global warming can
affect how telecommunication products reach customers. A long-range challenge could
be climate change created by global warming, which could disrupt transoceanic shipping
and Nokia’s supply chain. Nokia has faced the problem of safely and economically
disposing of its used products in an environmentally-friendly manner, particularly if the
devices use lithium batteries.

Political Factors
The political environment of a country affects all the individuals and business entities.
Political or regulatory actions (e.g. spectrum regulation) are critical determinants for the
entire mobile industry, (Porter, 2007). Nokia has expanded its business network to all the
major regions of the world, each of them has its own political environment (Lancaster,
2007). Being a multinational corporation, Nokia has to analyze the current political
conditions and governmental behavior of the target country towards foreign companies
(Cadle etal, 2010). Nokia takes the biggest impact from tax laws and political stability in a
country. For example, some countries put heavier taxes on foreign manufacturers than their
local manufacturers, which increase the costs of doing business.

Legal factors
Legislation issues, particularly issues with the government, monopolies, and customers,
often impact the telecommunication industry. But the industry has allowed importing and
exporting of telecom products (international smartphones, for example). Allowing more
development in telecom tech devices. Nokia’s legal environment is extremely
challenging because it operates within the European Union. One possible game changer
could be that popular Google solutions such as Gmail could be taken off of Android,
which could limit its popularity.

Ethical factors

These are moral issues that should be considered in business decision-making such as
health and safety a challenge for Nokia, especially within Nokia Networks, which
operates in some challenging environments. Employees and contractors can face
significant risks, including installing and maintaining equipment at height or in confined
spaces, and constructing base station towers. They are required to run programs to
improve our health and safety performance, and encourage open reporting of incidents
and near misses by contractors and employees, and report all tiers of contractors to ensure
that all incidents are investigated, For example It is also in the case that Nokia’s core
values are customer satisfaction, achievement, continuous learning and diversity at the
workplace.

2.2 Discuss the possible segmentation approaches Nokia can use (need to very
practical, contextualize to Nokia) [6 marks]
Market segmentation is the sub-division of a large heterogeneous market into smaller
homogeneous markets. This helps in more effective strategic planning, because it helps
utilize necessary resources and power in order to reach the ultimate sales. It also helps the
marketer to distinguish what marketing mix will be more appealing for a particular group
of consumers. Nokia is one of the few global corporation that has been successfully
practicing multi-segment targeting. Nokia segment groups are separated by a number of
variables.

Geographic Segmentation.
In terms of geography company can use regional approach to be able to appeal to the
local population and gain their respect and trust, (Johnson el al, 2005). Nokia keeps
opening its flagship stores all over the Asian and Middle Eastern rural regions to be able
to bring their customers all the latest innovations and provide them with quality support
services. Nokia keeps opening its flagship stores all over the Asian and Middle Eastern
rural regions to be able to bring their customers all the latest innovations and provide
them with quality support services.

Demographic Segmentation.
It involves dividing the market on the basis of statistical differences in personal
characteristics, such as age, gender, race, income, life stage, occupation, and education
level. Nokia has many mobile and smartphone devices to appeal to all the age categories
(from kids to seniors), all income categories, people of different religions and
occupations. Nokia has many mobile and smartphone devices to appeal to all the age
categories (from kids to seniors), all income categories, different family cycles (singles
and married couple households), people of different religions and occupations.

Psychographic Segmentation.
It is based on traits, attitudes, personality, interests, or lifestyles of potential customer
groups. Different models of mobile devices appeal to customers with various lifestyles.
For example, Nokia N79 was marketed as a sports phone thanks to a wireless heart
monitor implemented from Polar. The wireless Polar Bluetooth WearLink heart rate belt
helps monitor a heart rate along with a speed and distance while you are enjoying your
jog. Also Nokia has become a symbol of user-friendliness, simplicity and style, combined
with high technology and broad choice of features.

Behavioural segmentation
It divides customers into groups in terms of occasions, benefits, user status, usage rate,
loyalty status, readiness and attitude toward products. Most of the Nokia consumers have
strong loyalty to the company’s products because they are able to find the best quality for
their money. Among benefits Nokia has to offer great power life, various number of
applications for different needs and wants, durable and practical design. Because of the
large number of consumers, Nokia has to keep its target market excited with new
releases. It is clear that Nokia segmented on the bases of readiness as they anticipated
that, the internet would generate a new demand for broadband services, thereby offering
new challenges, as well as business potential, to Nokia. From the usage rate of the
internet would generate a new demand for broadband services.
2.3 Examine the bases for segmentation by Nokia [6marks]
The Market Segmentation means dividing the entire consumer market into the subgroups,
such that the customers in each group share the common set of needs and wants and have
more or less similar or related characteristics. Nokia segments on the base of age,
income, lifestyle, buyer readiness among others.
Nokia can use the following approaches to segment its market to facilitate competitive
advantage. These approaches include cluster, universal selling and differentiation.

Cluster segmentation
Cluster analysis is the use of a mathematical model to discover groups of similar
customers based on finding the smallest variations among customers within each group.
The goal of cluster analysis in marketing is to accurately segment customers in order to
achieve more effective customer marketing via personalization. Nokia can use this
method by finding the group of homogeneous characters. This will help the company to
produce according to the requirements of the segment.

Universal segmentation.
Also called the hybrid is the most innovative of the three. Products can be standardized
and transferred among different countries. This is when a product is produced fitting the
required standards of the country to be supplied. This means that will be profitable for
Nokia since resources will be allocated where high quality and quantity is needed. This
will increase Nokia brand reputation and image. Thus facilitate competitiveness of the
brand than that of its rivals.

Differentiation.
Differentiation approach is defined a business strategy to develop a unique product or
service that customers will find better than or in another way distinctive from products or
services offered by competitors. Nokia can use this approach to produce more unique
brand than those of Samsung. Differentiation will distinguish Nokia Company from the
competition. This will allows Nokia to have the opportunity to charge a premium for the
brand. Keep in mind, however, that the business often encounters higher costs to offer the
unique product or service and thus, needs to be successful in attracting customers to
cover that
3.1). Application of the SELECT model to Nokia. (15)
Competitive advantage is the basis for superior performance and is at the heart of much
of the strategic management in organisations. Competitive advantage is the skills,
expertise, exclusive relationships, core competences, and/or ownership of unique
resources that enable the organization to outperform others within its competitive
environment, (Lee, 2012). The select model framework helps organizations to make the
ultimate choice of matching resource commitment with changing opportunities for
gaining and sustaining competitive advantage.

Substance of competitive advantage

The two basic schemes used to categorize the substance of the competitive advantage are
positional and kinetic advantage and heterogeneous and homogeneous. Positional
advantage often derives from ownership or access-based sources and organizations with
positional advantage generate competitiveness from their superior attributes or unique
endowments of resources, market positions, established accesses, managerial talents,
skilled and dedicated employees and other traits that are relatively static in nature.. The
positional advantage of Nokia is emphasized in the case in that Nokia’s shares were listed
in Helsinki in 1915, traded in Stockholm, London, Paris, Frankfurt and New York, the
merging of Nokia, Finnish rubber works and Finnish cable works to form Nokia
corporation and its high-frequency technology expertise and extensive R & D investment.

Kinetic advantages are often knowledge and capability-based which allows an

organization to perform its operations more effectively or efficiently than others. Theses
includes entrepreneurial capabilities, ability to locate valuable customers and to identify
new market opportunities; technical capabilities that enhance creativity, efficiency,
flexibility, speed, or quality in a firm's business process, organizational capabilities that
help mobilize employees, foster organizational learning, and facilitate organizational
changes. For instance, Nokia's kinetic advantage emanates from its knowledge gained
from its extensive investment of research and development, flexible manufacturing
capability allows it to respond to market changes more quickly than rivals. Nokia also
proved its kinetic advantage when they identified the opportunity for digital
developments before anyone else, introducing its first digital transmissions systems in
1969

Homogeneous advantage is when is a firm outperforms its competitors using similar or

homogeneous strengths and skills. Such advantage is regarded as homogeneous
advantage. In the case, Nokia's cost advantage in mobile phones derives from its long
accumulated experience and its overall efficiency in operation and organization. A firm
can also enjoy heterogeneous advantage over rivals by playing the game differently or
playing a totally different game: better serving the customers through different skills,
resource combinations, or products from those of rivals.

Nokia's innovation allowed it to engage in the manufacturing of low cost and high quality
products. For example in the case Nokia is seeks to adopt differentiation strategies that
build on its current strengths and include its high-frequency technology expertise in order
for them to be ahead of the field. Also it was able to come up with the GSM phone with
fax, e-mail, short message service, address-book, calendar and internet connections and
created an entirely new category of digital all-in-one communications device. Nokia also
proved its heterogeneous advantages when they identified the opportunity for digital
developments before anyone else, introducing its first digital transmissions systems in
1969.

Expression of competitive advantage

The expression of competitive advantage can be derived from tangible or intangible and
discrete or compound. Tangible advantages are presented in physical forms which can be
readily observed, such as ownership of strategic tangible assets (Lee and Carter, 2012).
Location advantage comes as a tangible advantage. Nokia proved to be a global player
with established businesses in the Eastern and Western Europe, manufacturing in 11
countries to sell in 130. Additionally, the company has also aimed at breaking the
geographic boundary by increasing its research and development and global marketing.
In contrast, intangible advantages are not easily recognized as they are hidden in human
and other factors. They are more difficult to replicate as they are likely to be derived from
organization traits, brand name, reputation, employee know-how, characteristics, and
organizational culture that are socially complex. For example, Nokia enjoys a tremendous
reputation advantage due to its reputation of being the leader in the telecommunication
industry, unique organizational culture of customer satisfaction, respect for diversity, and
continuous learning more, research and development and philosophy that emphasize the
balance of a firm's social and economic missions. Also, the advantage derived from the
Nokia name, a symbol for luxury, prestige, and status, lasts longer than any tangible
advantages.

A discrete advantage is one that functions in stand-alone, discrete fashion for example
superior property locations, (Lee, 2012). Nokia had a vast ownership network of cable
and optic fiber lines that support its long-distance calling service, employed more than 36
000 people from all nationalities, ethnic groups, ages, sexes and backgrounds and views
diversity. All these created competitive advantage for Nokia corporation.

A compound advantage, on the other hand, consists of multiple individual advantages

that work together as an integrative whole. Such compound advantages can be found in
superior capabilities which mobilize and coordinate multiple assets and skills to build
competitive advantages in differentiation, quality product or service, low cost, quick
response to the market, or constant innovation. In 1967 Nokia, Finnish Rubber Works
and Finnish Cable Works merge to form Nokia Corporation as a way of cost cutting
measure.

Locale of competitive advantage

This can be traced at three different levels that are firm-bound, individual-bound, or
virtual-bound. Firm-bound advantages are either stored in or shared by many people in
the organization, and hence are less mobile and more difficult to duplicate. An
individual-bound advantage is one such that it is derived from particular individuals or
certain mobile assets. Whereas a Virtual-bound advantage lies outside of the firm's
boundary and resides in certain networks, relationships, and other entities that the firm
has access to. From the case, the Nokia firm has acquired businesses in western and
eastern Europe and manufactures in 11 countries and sells in 130 countries. This has
helped the company to spread its reputation across all these markets hereby creating
competitive advantage over its rivals.

Effect of competitive advantage

To justify investment in the pursuit of competitive advantage, it is necessary to ensure
that the efforts deliver desirable effects for the organization. A direct advantage directly
creates and adds values to the business operations and is typically more tangible in
nature, (Teece, 2010). For example, Nokia's expertise on wireless telecommunications
contributes directly to the quality and reputation of its products, enhancing sales and
profit. Also its ability to respond and meet customer needs quickly as they developed,
with the added benefits of cost reduction, improved quality and competitive leverage. On
the other hand, a firm often derives its indirect advantage from its supporting activities in
the value chain (Porter, 1985). For example, the competitive advantage Nokia derives
from its efficiency- oriented culture contributes significantly to its overall low cost
advantage.

Cause of competitive advantage

Competitive advantage can be acquired through purposeful strategizing. Spontaneous
causes include shifts in environment as well as pure luck (Barney, 1986). Strategic causes
refer to competition, cooperation, or a combination of both through deliberate strategy
formulation and implementation (Brandenberg and Nalebuff, 1996). Nokia’s strategic
advantage is derived from the fact that its reputation and image is sustainable, long
lasting and not easily surpassed or duplicated by its rivals.

Time span of competitive advantage

It is important to understand the life cycle of competitive advantage to determine when a
potential advantage will materialize and the sustainability of such an advantage. An
actual advantage is one that is currently in effect thus Nokia’s reputation from its global
markets and production of quality products gave rise to actual competitive advantage
because it resulted in increased market share across the globe.

3.2). Discuss the strategies that are deemed appropriate for Nokia to obtain
competitive advantage. The generic competitive strategies should be used to
comment on the suitability of each strategy, if a strategy is deemed to be
inappropriate for Nokia please motivate your answer. (10)

A competitive advantage is an attribute that allows a company to outperform its

competitors. Competitive advantage allows a company to achieve superior margins
compared to its competitors and generates value for the company and its shareholders.
There are three primary strategies companies can use so as to achieve a sustainable
advantage which are cost leadership, differentiation, and focus, (Porter 1985).

Merging
It is the marriage of two or more companies to achieve greater efficiencies of scale and
productivity, (Lynch, 2003). In a cost leadership strategy, the objective is to become the
lowest-cost producer. This is achieved through large-scale production where companies
can exploit economies of scale. In this case, that Nokia, Finnish Rubber Works and
Finnish Cable Works merged to form the Nokia Corporation and it started to strengthen
its position in the telecommunications and consumer electronic market. This also enables
Nokia to invest in advanced technology that will bring down their costs so that they will
be able to reap profits due to its significant cost advantage over its competitor. By so
doing they will be able to sell their products at the same price as its rivals whilst reaping
higher profit margins because of lower production costs, since higher profit margins lead
to further price reductions, more investments in process innovation and ultimately greater
value for customers. However the cost of using this strategy is that other firms may also
lower their costs as well. Also it can stifle competition which will affect production
capabilities, thus eliminating competitive advantage.
Differentiation Strategy
Differentiation involves making products or services different from and more attractive
than those of competitors so as to attain competitive advantages focused on enormous
market. This can be based on functionality, durability, features and also brand image
(People management, 2008). As illustrated in the case Nokia is seeking differentiation
strategies that build on its current strengths and include its high-frequency technology
expertise. The risks associated with a differentiation strategy include imitation by
competitors and changes in customer tastes. Also if rival firms like Samsung or Apple
pursue the focus strategy they may be able to achieve even greater differentiation in their
market segments which will lead to cost disadvantage to Nokia.

Focus Strategy
It is using the cost leadership or differentiation focus on certain customer group, regional
market and product segment market. Nokia should concentrate on particular niche
markets inorder for them to understand the dynamics of that market and the unique needs
of customers within it and develop uniquely low-cost or well-specified products for the
market. By focusing on consumer requirements, Nokia has become a symbol of user-
friendliness, simplicity and style, combined with high technology and broad choice of
features. It is a customer driven company which sets out to identify, anticipate and satisfy
customer requirements and this will tend to build strong brand loyalty amongst their
customers, thereby making that particular market segment less attractive to competitors
and by so doing Nokia will be able to obtain their competitive advantage. However firms
pursuing a focus strategy have lower volumes and therefore less bargaining power with
their suppliers.

Intensive research and development

Nokia’s research and development investment has been channeled into a number of key
areas where it knows that it can create a competitive edge over its rivals. From the case,
Nokia’s extensive R & D investment has been channeled into a number of key areas
where it knows it can create a competitive edge over its rivals. Global telecommunication
organizations are therefore required to meet growing consumer demand for rapid
competitively priced methods of communication. Nokia therefore looked to expand
globally by concentrating on its strengths and cutting out its least effective lines. They
also decided to look to future markets rather than past successes.

Staff training and development

Staff training and development is the upgrading of the workers’ skills so that they
become experts in that particular task. Nokia recognized and value the diversity of its
employees and operating units and generates a shared vision within the organization. It
sees itself as a learning organization, it does not rest on its existing strengths but seeks to
add to them, encouraging employees to take on more responsibilities and acquire new
knowledge and skills. This worldwide network of knowledge and expertise is at the
disposal of all the members of the Nokia team and is ultimately available to provide
complete customer satisfaction.

Conclusion:
Based on the above assessment of Nokia’s strategies to obtain competitive advantage, no
single approach can facilitate the company to succeed in achieving competitive advantage
within such a dynamic and complex mobile phone industry. Therefore, the various
strategies should be viewed as complementary. Therefore, if Nokia wants to get
competitive advantage in the mobile phone industry, the three strategies are all necessary.

4.1 Discuss how Nokia can utilize competitor intelligence (CI) for its products to
remain a leading player in the global market. Mention should be made of the four
categories of CI and examples given as to how Nokia can put each aspect to use. (8)

Competitive intelligence refers to information collected by a company about rival

businesses and markets, which may then be analyzed to create more effective business
strategies moving forward. Competitive intelligence assembles actionable information
from diverse published and unpublished sources, collected efficiently and ethically,
(Bartle, 2018). Nokia can utilize competitor intelligence using the SWOT analysis, by
analyising the strength, weakness, opportunities and threats of competitors. In this case
Nokia can come out with the strategies on how to produce and what to produce. The four
categories include social intelligence, market intelligence, technical intelligence and
technological intelligence.

Market intelligence
Market Intelligence is the information relevant to a company’s markets, gathered and
analyzed specifically for the purpose of accurate and confident decision-making in
determining market opportunity, market penetration strategy, and market development
metrics, (Weiss, 2002). In this case Nokia should analysis the market trend to gain the
knowledge about the customer needs. It is largely synonymous with market research, the
systematic gathering, recording, analysis and interpretation of information about a
company’s markets, competitors and customers.

Social intelligence

According to social intelligence theories intelligence is associated with the cognitive

component and other components, these components facilitate social communication. The
concept of social intelligence refer to the ability to understand thoughts, feelings and
behaviors of the others in different social situations, it also consisted of the skills which
enable individuals to solve social problems (Abuhashim, 2008). This will enhance Nokia
Company to understand thoughts, feelings and behaviors of its competitor such as
Samsung.

Technological intelligence

Technology intelligence is an activity that enables companies to identify the

technological opportunities and threats that could affect the future growth and survival of
their business. Nokia can put this aspect to use by actively monitoring and taking
advantage of changing environments and new innovations by other competitors. This will
enable them to become more innovative and reduce competition thereby enhancing
competitive advantage. For example Nokia used this strategy when it introduced the
GSM phone, it exploited the opportunity presented by technological changes.
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