The objective of establishing a firm in any industry is to increase profit or provide services and products to the society. A company is established in a market where there is a niche since the management aims is to ensure that the company is sustainable in the long run. The structure that a company will adapt will depend on barriers that exist in the market. With the increased possibility of competition, every company’s management is in search of strategies to ensure they gain competitive advantage. Competitive advantage is attained when a company can manage to retain its market share despite the presence of different firms that provide the same product or service. Before a company can decide to operate in a particular market, it is essential to analyze the market forces and determine the strategies to formulate to ensure the desired company's goals are achieved. The essay aims at analyzing the Nokia Wireless Cell Phone industry in consideration to the competitive strategies that the company has used. The Nokia Company operates in a market structure that has led it to acquire several firms which are a strategy that has helped the company achieve its competitive advantage.
Nokia Incorporation is the leading company when it comes to mobility, driving transformation and growth. The company has managed to introduce mobile devices into software and services that have enabled its customers to experience a wide variety of benefits like navigation, music, and imaging, games, television and business mobility. The key focus of the company is to ensure that its clients benefit when it comes to internet services as well as the enterprise software and technology. The company has managed to do this through acquisition and partnership agreements with entities that offer competition to its growth and expansion goals. An example is Qualcomm, which partnered with Nokia to develop next-generation cellphones with North America as the target market. Nokia agreed to this deal since its presence in the region was lagging behind.
In this essay, the focus will be on AirFrame, which is a company that Nokia acquired with the objective of introducing the 5G network services. The objective of acquiring the firm is to ensure that Nokia clients can be able to access the quickest internet speeds. The mobile devices that Nokia produces have internet services and with the acquiring of AirFrame, the company would be able to provide cloud computing. The data center that Nokia has will be complemented by the presence of AirFrame technology hence helps compete successfully with other companies. The AirFrame will provide a competitive edge for Nokia products due to the platform that its technology will bring into the company. AirFrame adheres to the standard approach and hence ready to provide support for Nokia Virtual network functions.
The market structure that AirFrame operates in is Oligopoly market where they are only a few firms that provide cloud Telco. The acquiring of this vendor by Nokia is with the objective of ensuring that Nokia Network data center is combined with the cloud computing technologies to meet the stringent expectations of the Telco world. The competition in this business is proactive and establishing a partnership with other companies is the only way to ensure that Nokia market is sustainable. In an Oligopoly market, it is expected that the companies try to acquire more joint agreement with other firms that can help attain a competitive advantage. The partnership or the joint agreement may be from other businesses that operate in different market structure other than the current structure.
The partnership or acquisition done by any company is to ensure that a firm is in a position to increase its market share by improving the services offered to its clients. The Nokia was the leading mobile device and mobility company, acquire businesses that ensure it maintains it position in the industry. The competitors like Dell, HP and Cisco which are enterprise IT company but provide wireless technology can decrease Nokia’s market share if the company does not take the necessary steps. The AirFrame will provide technology that will help in the merge of IT and Telco domains and in turn help in paving the way for 5G. This will be a milestone goal for Nokia since the company will manage to provide high technology mobility for enterprise and businesses and other clients who depend on Nokia products for their day to day activities.
The strategies that the company can use will have to help the company gain competitive advantage. Some of the strategies that can be used are cost leadership and differentiation. These strategies will ensure that the company is in a position to compete with other companies. Cost leadership is the ability of a company to reduce the operating cost, and this will result in reduced cost of products. Low-cost leadership leads to high-quality products while ensuring the customers getting inexpensive products. Cost efficiency would ensure that Nokia can offer its products at low prices hence gain competitive advantage. A differentiation is a competitive strategy that a company can use to help customers to identify products of one company from the other. The Nokia products can now be differentiated by the inclusion of the AirFrame technology. By doing this, the clients can be able to get better services for the devices they acquire. The pricing strategies can be used to ensure penetration of a product into the market, and this can help create customer loyalty. The pricing strategy of promotion can also increase sales for a product by attracting customer to the product. Once the product is in the market, the other clients can buy the product at the set mark price considering the previous promotional sales would help sell the current products through referrals. For example: a newly introduced device if sold at a cheaper price during promotion and the buyer is able to acquire the product, he will definitely talk about the good services the device is offering hence attract others to buy it even if it is expensive.
The AirFrame technology introduction will help a lot in increasing the sales of the Nokia devices due to the new platform introduced. The strategies that would help the company increase profits are, establishing a target market, high-quality products, and appropriate prices. Creating a target market helps in ensuring that the products that are produced are customized to meet the expectations of the predetermined customer. This would ensure that the client gets value for the product bought. High-quality products attract more customers since most of the customers consider quality first then the price of the product. Quality products would create loyal customer hence increased sales. The prices of a product would determine the number of clients that the firm will acquire. Products that are beyond the price expectations of the client will attract fewer sales since none of the customers will be willing to sacrifice other needs to buy the product. It is, therefore, important to charge the right price.
The objective of every firm is to make the profit through the sale of its products and services to the customers in the established market. Profits cannot be attained easily, and that is why firms need to set the strategies to ensure they achieve this objective. Sustainability in a market depends on the external and internal strengths of a firm. The power is obtained by the formulation of policies and strategies that help the firm attain competitive advantage. Nokia leaders in the production of quality mobile devices and software that has helped its clients to receive value for the products they buy. The objective of the company is to ensure that its products help the client implement their activities through the provision of support services. With this objective in mind, Nokia decision to strengthen its brand led to the launch of Airframe which is a company that would work together with data center based in Finland to ensure that 5G is available to its client. The customization of the Nokia products to include this technology is a milestone objective for Nokia Incorporation since this is a sure sign for better returns. Acquisition and partnership agreements done by companies like Nokia have the interest of the client and hence the decisions that the company takes are all market-based. Firms that need to sustain their activities in an industry must establish a target market hence customize their products to meet the expectations of the clients.
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Mahnken, T. (2012). Competitiveness Strategies for the 21st Century: Theory's, History, and Practices. Palo Alto: Stanford University Press.