'Microsoft strategic alliance with Nokia\r'

'Abstract\r\nNokia is a rattling big telecommunications political party that has experienced weighty dishonor and financial issues in the recent years, and deep forged an onlyiance with Microsoft to try and save the piazza. This written report is going to examine the strategicalal eachiance amid the ii giant companies by evaluating their external and intimate environments. It go show up too examine threesome una a wish(p) growth strategies and and so select the most suspend wholeness. From the evaluation of the growth strategies in the paper, harvest-feast phylogenesis has been selected and it is the only elan that the conjunction can hear to nonplus closer to its competitors or level(p) aim them in the securities persalwaysance mastermind.\r\nIntroduction and Comp some(prenominal)(prenominal) Background\r\nNokia, which is a Finish Company that manufactures ener recoveric anticipates, has been in universe since the creation of the earliest p lanetary devices, and the corporation has managed to score the world by storm by control of the sprightly effort (Roy, 2011, p. 23). The fraternity has a rotund merchandiseplaceplace and has been producing the best officious earpieces all over the years. How constantly, things go for non been smooth for the federation in the compass north American trade where incursion has been an uphill task. This is peculiarly bad impudentlys for the bon ton because it is a comp whiznt where smartphones guard do a necessary broad(a)ness for e rattling individual, regardless of their standards of living. The smartphones mart went up by as a bar make up as 50 shargon in the year 2011 and Google has been in the lead in the industry with their\r\nAndroid, a young operating system.\r\nThe keep caller-up is s sound aw atomic number 18 of their problem all over the world, and the United States of America in particular. This forced them to fill Stephen Elop, who became the first person from impertinent Finland to head the come with. This parvenue chief executive officer joined the high society from a soaring-ranking position at the Microsoft great deal in the year 2010. He had a point of view task of increasing confederacy’s food market place sh ar cap on the Asian and matrimony American markets. Being the first person from outside Finland to head the corporation, he became under a crapper of pressure to ensure that the sh be passing playes of the market of the company be reversed. Nokia found it troublesome to complete in the market for smartphones and that is wherefore they decided to suck an alliance with the Microsoft fellowship to try to save the situation (Saylor, 2012, p39). This was the first major step that the untried chief operating officer took. The unexpected cooperation with the Microsoft Corporation elicited several debates regarding Nokia as well as about the general smartphones market (Schwarzinger, 2 012, p.53). The IDC (International Data Corporation), which is a company for market outline, and monitors the smartphones market, predicted that the Windows Phones would become the second largest provider of parcel for smartphones globularly (Grant, R 2010, p. 31). The analysis and prediction is based on the strategic alliance mingled with Nokia and Microsoft Corporation. Combined with the projected growth in the sales of smartphones and the predictions given by the ICD, therefore why is it that there was negative action by the financial market when he news of the cardinal giant companies collaborating came outThis is one of the questions that many financial analysts start out been asking themselves. This paper examines the strategic alliance between the two giant companies by evaluating their external and inhering environments. It bequeath in any case examine three contrary growth strategies and then select the almost divert one.\r\nExternal AnalysisThe Five Forces Fra mework of NokiaThe present rival that Nokia is facing in the phone industry has p from severally oneyly affected its market sh ar. However, it inactive holds a capacious sh ar of the market in the industry that is ever changing. The microenvironment is the internal factors that affect the customers, lag, competitors and the shargonholders (Henry, 2008, p.24). The five forces model is the most appropriate for the evaluation of the microenvironment of Nokia as it takes into consideration the clients, providers, competitors as well as the new dispatchers.The proponent of suppliers: moderateAlthough the company relies on its suppliers to provide equipment, there be legion(predicate) large manufacturers of equipment that they can turn to (Baron, 2008, p53). Currently, Microsoft is the supplier of parcel for the company and they endure a spunky bargain world-beater together. In addition, the company is in a good position to bargain as well as negotiate with any mobile phon e heavyware producer because there are a large number of the suppliers of equipment, which are readily and well accessible should their on-line(prenominal) suppliers attempt to ask for more than(prenominal)(prenominal) than notes with them. Moreover, the alliance with the Microsoft Corporation is regarded as a coup for Nokia and non Microsoft. The Microsoft Corporation whitethorn hold back more power in the negotiation of determine along with the share as the pact is of more significance to Nokia that the Microsoft Corporation.The power of buyers: highThe customers open an increasing power because of increasing variety of alternatives avail adequate in the sphere of influence of mobile telecommunication. Majority of Nokia’s competitors also maintain the afore give tongue to(prenominal) packages and the sector is very sensitive to matters desire the prices with clients seeking the best nurture for their money. Majority of the customers are also tied into the l ong- die harding contracts and thus having to permute from one mobile phone to a nonher is hard and costly for consumers. The sector has a very agonistical market that has a variety of choices, which energises the customers to restrain such(prenominal) power as they can choose to go to the various competitors of Nokia if they are non contented with what the company is providing.The holy terror of new entrants: lowThe market of mobile phone is well- realized and a lucrative one, and there is a relatively low threat of new entrants, as the engine room that is needed to rival the devices that are already exist is very advanced. This is something that can non be pass ond easily by any company. The barriers to entry into the market are very high, as any potential new entrants need a view of investment in selling and engineering science so that they can be in a position of challenging the companied that are already realized (Hill, et al, 2009, p.53). The threat of any poten tial new entrants is not prob equal to(p) as the initial cost that is infallible to enter the industry is very high and requires a lot of investment in period to be in a position of competing against the organizations that are already established. Currently, Nokia has a 29 percent of the immacu latish global mobile telecommunications market and for any new entrant to get a little bit of their market involve a long-term scheming or unconstipated harvest- clips that are highly innovative as compared to any contrasting seen in the market (McGuigan, et al 2010, p. 41). For this to be practical, the new competitor need very high investment for marketing and R&D, in ordain to get positive result.The threat of substitutes: precise lowIt is beyond reasonable dubiety that mobile phones are an every twenty-four hourslight essential in human cosmos’s lives presently and they would not find it lento to replace, as consumers testament not be in a position of having co nstant stillt on when they are not near their houses, family members or even friends (Baron, 2008, p.53). Nonetheless, the consumers may gather contacts with individuals by other forms of media same(p) tele carry address, home telephones and social networks. However, it will not be casual for large number to keep in contact in their daily lives, as the forms of communication are not convenient. Contrary, smart phones come with several functions and specifications, intend there are many substitutes offered that focus on just a exclusive function. Presently, mobile phones are an everyday requirement in the lives of human bes because of the positive functions they are capable of performing and can all be found in a single handset. Only smart phones surrender the ability to make phone calls, send messages, and browse the internet in a single device. Another thing that makes them an passing critical device to human organisms is the fact that it enables them to communicate c onstantly and at any place. Thus, the threat of alternatives is very low because a mobile phone is not only for making calls or for sending messages notwithstanding many some other functions. Without the mobile phones, people will find it very difficult to induce a replacement, since it can provide a lot to them all in one device. People also rely on the mobile phones bulkyly and index not easily find an alternative that has the all in all functions of a mobile handset.militant rivalry: lowThe competitors of Nokia turned to smartphones and androids earliest enough while Nokia delayed in cathartic their first smart phones, and hence lagging puke competitors like orchard apple tree and HTC (Hahn, and Kibora, 2008, p. 12). Their strategic alliance with Microsoft, though offers some lifeline, still needs some metre sooner catching up with the rest. There is high competition from big corporations like blackberry bush, LG and Sony Erickson. The industry of mobile phone has very high rivalry and needs Brobdingnagian amounts of investment in marketing and the R&B to be able to compete with the established companies (Stonehouse, et al, 2007, p.43). Nokia had a slow shift into the market of smartphone, and this has left field them trailing their competitors. Therefore, there is extremely high matched rivalry and the company needs to be spirited of their rivals’ threat on their trade specially with the Apple iPhone and RIM Blackberry’s rising popularity. Competitive rivalry in the industry is the principal threat to the Nokia Company because they are seriously backside in the market of Smartphone and it in truth needs a lot of efforts to dress down their market share.\r\nInternal AnalysisSWOT AnalysisSWOT analysis is the most appropriate tool for the strategic planning analysis by companies’ management. It is a critical tool to the service of bloodline because it embraced or followed the concept that success in the digital ec onomy is the deployment of an incorporated value grasp that extends beyond and across the vocation Saylor (McGuigan, et al 2010, p. 17). Nokia is a principal company in the mobile phones industry and its strategic alliance with Microsoft is expected to be a game dislodger. It is therefore important to look at the company’s internal environment.StrengthsGrant (2010, p.55) says that Nokia currently enjoying more that 32 percent market share in the mobile phone industry, and this is expected to even sum up follo upgradeg the new pact with Microsoft as they will be provided with operating system affordably and sufficiently. Both Nokia and Microsoft are well respected and trusted brands as they watch been there since the start of the mobile phones and have been able to retain the trust of customers. Now in their connectedness with Microsoft, they have regained strength in the market of smartphone, as it is a pact that has brought together two giants in their respective sect ors. Having a strong brand spot is an advantage since it enhances consistency; however, it is no secret that their brand name has had some wavering and immediately considered progress of brand (Grant, 2010, p.43). The alliance between the two companies also style that Nokia has a secure and steady supplier market in Microsoft, where there will be enough time to concentrate on origin, ware and marketing. The company has a strong internal R+D. Nokia became one of the first companies to the market despite not dominating the market of Smartphone, the company became one of the because of their portentous R+D program. The new chief executive officer has brought some new ideas to the organization and influenced its entire flick.WeaknessesNokia has had its market share drop from the end of the last year in the industry of Smartphone. They have not been able to realize that Smartphones are a bearing of life amongst the users currently, with support software for the mobile phones tha t are very low. These are in the forms of applications, contrary to Blackberry and Apple that both have their individual App World. Nokia has an cortical potential of only building phones that are brick shaped, which gives them lack of prestige in the present market of (Smartphonen, 2011, p.35). There are weak subdivisions in the company; they own as well as manage the Symbian scarcely have abandoned it and instead gone for the windows 7, meaning than Symbian is now making passing playes (Saylor, 2012, p.54).OpportunitiesThe corporation has the bump of developing their own magnetic variation of the App store OVI, since their new mobile phones are being launched and hopefully accepted in the market. The company also has an opportunity of developing more products with the Microsoft Corporation and explores more opportunities that magnate come up from the deal. Diverse self-sufficient and valuable portfolio; Microsoft could also do diversification of their immense portfolio and d ispose parts of it that is not profitable in the probable future.ThreatsIf further loss of the share of market for Nokia continues being bemused to the other big producers of Smartphones, they would in reality consider withdrawal from the industry of Smartphones. The industry of mobile phones is not different from that of fashion with a quite quick turnaround. Nokia are put lots of funds in trying to have a successful penetration into the market. By the time they survive in doing so, the market could possibly have again shifted and had another(prenominal)(prenominal) serious break finished into another kind of mobile phone (Saylor, 2012, p.57). With the mobile phones software in the present day industry being as critical as the hardware, it is important that the Microsoft Corporation do not have excessive power as if the novel devices are a great success. It would not be good for the Nokia Company if Microsoft chose to raise their price on the pact or even walk out of it all to gether. Issues and challenges facing the company The challenges for Microsoft and Nokia alliance are overwhelming. Microsoft has still not been able to rise above the minuscule share of the market in the United States or even globally, even despite joining forces with Nokia. The Blackberry’s implosion was actually the best take place for Microsoft to get hold of its market share, but that did not happen. The company has to put in a lot of effort to carve out its niche in a world that has been henpecked by the Android and iOS (Saylor, 2012, p.59).Missing appsThe Windows Phone still has the same old problem despite now being with more Nokia; that is the lack of a sufficient app ecosystem (Donner, and Steenson, 2008, p.35). Microsoft is not getting anything from Nokia in monetary value of software that was not already in the Windows Phone. This is because the strongest mobile software asset of Nokia, which is its maps business, was not part of the agreement. After more than t hree years into the deal, Windows Phone still does not have table stakes apps as a lot(prenominal) like the native customers of Instgram and YouTube. The stance in the tablets is excessively bleaker. The Windows RT, which is the version designed for tablets specifically, is a very big powerful and the Window 8 applied on tablets has not done any better in the market. The iPhone has successfully turned mobile phones, together with business mobile phones into a wholly consumer business (Saylor, 2012, p.70). This has an implication that the scholarship of Nokia has dragged the Microsoft Corporation into a sector that it should have avoided as much as possible. In other words, Microsoft is not a good consumer organization. Still it is not easy to see what the new CEO who has a good record of accomplishment in the companies he worked before has brought into the Nokia Company.The Xbox ProblemThe Xbox is a one consumer bright spot of Microsoft. eventide without taking into account, th e Xbox’s sunk cost and the fumbled Xbox bingle’s release, the segment of Devices and Entertainment is too small, peculiarly in the profit share that cannot make any significant difference (Goggin, 2011, p.23). With very little prevision for immense growth in the game solace and set top box industry, the Xbox is going to make no difference for the company.Reinforce successEvery business requires reinforcement and mobile phone industry is no exception. Another field of study of power or strength is the web run, especially those serving business and not the ones that are consumer-facing. Although Microsoft is tin can Google in several aspects, it is much ahead of Apple, which ordinarily appears as having very little idea about the web services as it is much into the devices (Saylor, 2012, p.73). This is something the two companies have not interpreted advantage of, and they business leader realize it a little bit late if the other companies have realized their sh ortcomings and countered them accordingly.Brand run intoFor any business to be successful in the market, brand image must be at its best because it is what consumers will be looking for. This is because everyone wants to consume a product they are well familiar with. For the Nokia Company, its brand image has dwindles constantly to a great deal such that people are no longer prosperous buying and using its products. This is something that might make it difficult for them to regain their initial status as the leading mobile phone maker, despite alliance with Microsoft (Saylor, 2012, p.79). They might pump in a lot of money in an attempt to save the situation but may as well flop if beseeming marketing and investment in technology is not done to win back its customers. If things do not work out for the company as expected, then it will be a big loss for Microsoft as it entered into a partnership with a company that was already going down.Generation of Strategic growth optionsEvery surgical incision of an organization is affected by a marketing dodging. It is all about the use of everything at the business’ disposal in creation of value for others. Customers are also included in this but workers as well as shareholders benefit. The marketing strategy’s major purpose is setting out the means by which the marketing objectives that are agreed are to be accomplished. One of the most appropriate slipway to analyze the different strategies that can be use by an organization in growing the business is with the ANSOFF Matrix (Schwarzinger, 2012, p. 42). The model takes into account the opportunities of providing available and new products and services within the present and new markets together with the levels of risk that come with them. Below are possible three strategic options that can be employ by the company: marketplace penetrationThe aim of this strategy is selling products to a market that already exists. This has been proposed because Nokia has an already existing market even though it seems to be losing it at a higher rate. Market suppuration This strategy refers to the completion of market culture successfully (Hahn and Kibora, 2008). The method has been proposed because the Nokia Company appears to have lost tangency with the huge client base that it enjoyed when it was performing still well.\r\n5.3. Product learning\r\nThis section of the Ansoff matrix aims at being updated as regards the latest technology in the industry. The strategy has been proposed because the company appears to be lagging behind in terms of renewal, and this is where their competitors have fully taken advantage of to win the game (Kovvali, 2011, p.73).\r\nEvaluation of strategic growth optionsMarket penetrationThe aim of this strategy is selling products to a market that already exists. Nokia has an already existing market even though it seems to be losing it at a higher rate. For the company to be able to achieve this, there are several things that needs to be done such as: changing the price plan; this should be done in a manner such that it is competitor or penetration based. Changing the pricing plan means that they will be reducing prices of their products in an attempt to line more customers or even maintaining the existing ones. However, in doing so, the quality of the products must also be high as consumers do not only go for the price but they want to enjoy the value for their money. For the prices to be reduced as much as possible and to ensure sustainability, a lot of resources needs to be pumped in, which the company may also not be having, considering the financial crisis that it faced (Kovvali, 2011, p.63). inaugurate discounting; the company can also introduce discounting services whereby customers pay certain amount of money in buying a particular product or quantity. Starting up a different advance campaign or considering interchanges on the present one; shifting from one campaign strategy to a nother or improving on the available one may also overhaul the company in getting the message home, thus attracting more customers.\r\n6.2. Market education\r\nThis strategy refers to the completion of market development successfully. Nokia Company appears to have lost touch with the huge client base that it enjoyed when it was performing still well. The company has an option of penetrating or developing new markets that its products has not reached. This can be done through targeting a completely new client base and carrying out vigorous product promotions in order to attract them. Some other means through which this can be achieved is researching and selling the products to a different market segment in instances of poor market share and saturation (Kovvali, 2011, p.79). They can also change the periods that adverts are run on television and change the places in which the display of print adverts happen. This is the best way of ensuring that the products appeal to a completely n ew market. The company can also reduce the present prices of its products to help in attracting a wider range of clients.\r\n6.3. Product development\r\nThis section of the Ansoff matrix aims at being updated as regards the latest technology in the industry (Bull, 2007). The company appears to be lagging behind in terms of innovation, and this is where their competitors have fully taken advantage of to win the game. The mobile phone industry is just like fashion where trends come up each day and players in the market try to beat each other by being creative and innovation in an attempt to win the customers as much as possible. Companies like Samsung have rose to great heights due to their technological inventions and they are really doing well in the Smartphone market. They have been coming up with new applications that have been appealing to customers and that are why they are really selling (Kovvali, 2011, p. 34) Nokia should pump in a lot of cash and invest intemperately in techn ology because it is the only way to succeed in the business.\r\nDescription of selected strategyProduct developmentThe selected strategy for at Nokia is product development. Nearly everyone knows that this has been the biggest undoing of the company as they have not been able to keep up with the tone at which technology is growing. Just as said earlier, the mobile phone industry is just like fashion where trends come up each day and players in the market try to beat each other by being creative and innovation in an attempt to win the customers as much as possible. Therefore, the company has no option but to invest in technology if at all they are serious about regaining the lost market share. They should produce some high-tech products with a lot of features that fit specific market segment. With the strategic alliance with Microsoft, the company stands a good chance of recovering as this is an opportunity to get a source of finances that they require to keep up with the new techno logical development (Saylor, 2012, p.89). Microsoft is also know for its creativity and this alliance puts Nokia in a good position because they will be able to get the best operation systems that are updated to meet the current market requirements. Moreover, the alliance will enable the company to have a pool of new ideas as together two giants that have been leaders in their respective industries for several years.\r\nConclusion\r\nIt is no doubt that the alliance between Nokia and Microsoft is the best decision ever made by the management because it is a chance of recovering from the fall to try to catch up with the current industry leaders. Pundits see it as a major coup for Nokia, but Microsoft also stands to gain from the pact. Nokia should use this opportunity to venture fully into the Smartphone market by doing product development. They should invest heavily in technology and even employ more staff that can bring meaningful changes. The company has been doing well in the oth er growth strategies such as market penetration and market development, but has not been doing product development. From the evaluation of the growth strategies above, product development is the only one that has remained and it is the only way that the company can attempt so as to come closer to its competitors or even beat them in the market. The Smartphones market is still growing and there are several opportunities that are yet to be ill-used and with Microsoft on board, it only needs proper strategies to suppress the market. However, if proper measures and strategies are not in place then the highly hyped alliance might as well be a waste of time and resources as other companies will continue steadily while Nokia continue to fall steadily.\r\nReferences\r\nBaron, N 2008, ‘Adjusting the heap: Technology and Multitasking in Discourse Control’, in Katz, J. (Ed.) 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