Introduction
Every organization may have different success factors. However, with time, it can face several crises. The organization must see it coming and make effective strategies to sustain the business and regain growth. In this part of the report, the emphasis is on the antecedents of Nokia, operating sector, the purpose of the business continuity plan, turning points, identification of crises, stages of crises, and proposals for business continuity plan along with a pertinent justification. The purpose of this study is to understand the existence and impact of disasters.
Before going deeper into Nokia’s crisis, it seems imperative to elaborate antecedents of Nokia.
The brief background of antecedents of Nokia
Nokia is a Finnish multinational organization. This company was founded in 1865 with a single paper machine. However, business expansion was quite visible in the 19th century. The company started its mainstream business in the 20th century, as it began to contribute to computers and mobile phone developments. The firm started significant operations in 1967 through mergers and acquiring some major technology giants. Initially, the firm began developing tires, cables, rubber boots, personal computers, and many other electronic devices. Nokia also started making different mobile radio telephones for the military. Developing the VHDF radio was a significant development, and it seemed the vase for the company to create Nokia mobile phones.
Furthermore, the company developed Nordic Mobile telephones. However, the development of the global system for mobile communication was a significant achievement. In 1987, it became the standard for digital cellular technology in Europe. In 2000, the development of the Nokia 3310 mobile was a considerable achievement, as it changed the customer’s perceptions about mobile phone technology (Carphonewarehouse.Com, 2017).
In 2003, the firm developed the Nokia 1100 handset and made it the best seller at that time. Nokia has produced many other mobile phones with time. However, the industry was growing, and Nokia failed to integrate with modern mobile phone industry trends.
Operating Sector
Initially, Nokia was operating in tire, cable, computer, and electronics industry. However, it was recognized through remarkable mobile phone developments. It is one of the best companies in the mobile phone industry. The firm produced the bestselling mobile phones at that time, which made it financially capable of expanding the business, especially in developing countries. Thus, in the 20th century, the operating sector is the mobile phone industry. Interestingly, the mobile phone industry became competitive due to several global rivals (Saeed, 2018).
Statement and Purpose of Continuity of Business Plans
Nokia is looking to sustain the business in the competitive mobile phone market, and it is possible through an effective business continuity plan. The firm has to identify several business risks or threats in the competitive landscape and protect resources to work better even in disaster. Nokia needs a business continuity plan for long-term business sustainability.
The purpose of the continuity of the business plan is to shape the best strategies or alternatives to face future crises. The business continuity plan can help the company identify and navigate future crises and business trends. Nokia aims to be a great contributor to the industry, and it is possible through the perfect execution of the plan.
Recognition of Turning Point & Significance
Steady growth
Apple and Microsoft sustained the development process. For Instance, Apple Inc started making touch screen mobile phones. On the other hand, android proved the importance of software than hardware in the mobile phone industry. Nokia relied on its small cell phones and sales, and it was the turning point. In the contemporary business era, Nokia contained an excellent research and development process. However, it has been revealed that this process was quite slow compared to other companies. Nokia was enjoying sales and profit from existing products, especially in developing countries. Big technology giants were aware of the future mobile market. It is an important turning point for Nokia because it was the perfect time to move on and integrate with some modern mobile phone industry trends.
Nokia gained success in the 90s and early 2000s due to high-quality mobile phones, sales, and brand image. However, with the time, Nokia did not focus on the innovation. It is a fact that the company failed to develop and utilize the innovative culture to come up with some innovative outputs. Mobile phones were converted into smart phones by significant rivals in the industry. Ignoring the creative culture was one of the most prominent turning points. It has significance. It could save Nokia from possible future failure (Doz & Wilson, 2018).
Unfortunately, as mentioned in the crisis section, Nokia technology integration was delayed. It was a turning point for this company. For Instance, It depended on Symbian for a long run, and it seems traditional in the contemporary mobile phone market. The firm integrated with windows, but it was delayed.
Moreover, the poor management process was also a crucial factor that created the impact on the company’s growth (Doz, 2017). For Instance, the firm management was ineffective, as it streamlined poor and delayed decisions. Poor management and decision-making matrix created barriers for the company to expand and move on in the competitive mobile phone industry. After restructuring the business and management process, the firm still struggled. Now, it was the best time for the company to sell the mobile phone business to Microsoft. It was an important turning point because it saved the company from a complete downturn (Hern, 2016).
Identification of the ‘Pivotal’ Crisis
Despite containing these crises, one single pivotal crisis has been derived from Nokia’s Journey. Instead of blaming Nokia’s engineers and Nokia’s culture, there is a need to examine the whole picture. Nokia did not focus on the United States, especially North America (Schrage, 2011).
Interestingly, poor technology is not a single factor in Nokia’s failure. The firm is still capable of embracing new innovative strategies to develop different products to be relevant and lucrative in the competitive market. Nokia ignored America, and it seemed the base of crisis. After gaining the success due to newly developed mobile phones and sales in European and Asian markets, Nokia was restricted. It relied on market dominance in these regions and struggled to identify possible benefits that it could derive from this potential market. The United States is one of the richest countries, and operations in this region could save the company from the big downturn (Schrage, 2011).
Apple’s mobile phone and Google’s Android in the United States gained success in this market. The firm lacked innovation because it was not a part of the US mobile or technology industry. Nokia’s market share was 47%. However, drastically, it declined. Just operating with a 7 % market share in this market hit the revenue growth and profitability, and it also created barriers regarding the business expansion. The US market was a perfect platform for innovation, as the firm could acquire (Schrage, 2011). For Instance, the global market share of Apple’s iPhone is 16%, and it is quite good as compared to a single product by Nokia in the global market.
Latin and North America are potential markets for international brands. Lack of business expansion in this market undermined the brand. It lost its market and technical leadership. The company lost its customers because it relied on the wealth of households in different markets and ignored the wealth of ideas in the United States. Integrating with Microsoft is a good move, but the firm is still not in a good position to exist in the real competition (Goldman, 2010).
It seemed a pivotal crisis, and all unfavorable factors revolved around it. From the business expansion to the lack of innovation, the firm had to think strategically.
Stage of Crisis
An organization may face prodromal, acute, chronic, and resolution crisis stage. Nokia is facing the acute stage of the crisis. It moved from pre-crisis to the critical phase. For Instance, Nokia was not aware of these business consequences. It was the pre-stage of the crisis. Now, it is happening for Nokia (Wollaston, 2018).
The management of the company is looking to make and execute all strategies to depict the damage control. The administration has no option but to control it. In other words, Nokia could not stop this business damage, and now, it is looking to survive the business instead of gaining a competitive edge or increasing its market share in the competitive market. The damage has been done, as the firm is not developing new products and expanding the business in different markets. Customers from different parts of the world expected some competitive and differentiated products as compared to Apple, Google, Samsung, and many other mobile phone companies (Katragadda, 2017). The damage has been done in the form of loss of poor market share, sales, and product development.
Proposal for business continuity
The business continuity plan is divided into four phases. These four phases are business impact analysis, recovery strategies, plan development and testing and exercise.
Business Impact Analysis
In the business impact analysis, the firm management will identify the effects of the crisis or disruption of different business functions. For Instance, the pivotal crisis of Nokia was ignoring the United States as a potential market (Davtyan, 2016).
Thus, the firm has to obtain an impact on business and operations such as innovation, product development, market share, customer response, and business sustainability. Taking the information from this analysis is a better approach to make better recovery strategies in the competitive landscape. Through a better impact analysis, the company can identify the root causes of the crisis and pivotal crises. It has been observed that the company suffered due to the crisis, which created a lousy impact on operations and financial capability.
Thus, these are critical areas of the company in the restoration process. Nokia will examine the implications for sales, product development, brand image, business expansion, management structure, and profitability. Accordingly, the firm will be in the best position to make appropriate strategies.
Recovery Strategies
On the other hand, the management requires some key resources to make the recovery strategies. Based on the crisis identified above, the firm must need employees, technology, finance, and third-party services. For Instance, to expand in the competitive US mobile market, the intention of the company will be on local talent or workforce. The third party will run the distribution process. Financial capability may help the company to transform or embrace advanced technology. Thus, all these resources are necessary to make recovery strategies.
Strategic alliance with Microsoft is a good move by the company to regain the growth and start business operations in the United States. However, it is not a single factor to gain success. For Instance, Nokia still contains the capability of mass production. It can acquire small technology giants in the United States and take the first step to increase the market share (Campbell, 2017).
After acquiring or containing the partnership with small companies, the firm must have to change its cost structure, especially in the United States. Low-cost strategy is useful so far in developing countries. However, the company can depict a price shift and experience the different customer perception. In the innovative culture, the firm has to differentiate its products from other companies in the US market. Accordingly, the company can increase process. It will create a direct impact on sales, revenues, market share, and profitability.
Smartphone development will be a significant difference. The times have changed now, as people move on. Nokia existed successfully in the handset era, but it has to emerge in the Smartphone industry soon. Partnership with Microsoft may have the firm start developing smart phones. However, gaining growth and competing for advantage will be tricky.
Nokia is looking to restart its business from the United States Instead of Asian countries or other European markets. Now, Nokia has to decide some initial steps. For Instance, the management knows what it wants to recover and achieve in an intense rivalry. Selling the mobile phone business to Microsoft was a tough call. Now, the firm has to develop with its own innovative culture. Building the creative culture and becoming a permanent part of the innovative Smartphone market of the United States is the primary plan (Danova, 2014). Also, the firm needs an effective and comprehensive implementation plan.
Testing and Executing
The final phase of the continuity of the business plan is testing and executing. Due to identified threats to the company in the market, the collaborative approach is an excellent strategy to ensure the workability of the plan. If the firm decides to develop a new Smartphone series, it can collaborate with its strategic partner. A proper product and brand vision must be created and communicated to all key stakeholders. It seems a significant change process, and urgency must be designed to make the difference.
Justification
A business continuity plan is valid for Nokia because it is the single option for the company. A merger and acquisition are an appropriate strategy or plan to sustain or continue the business and put the company back on track. Interestingly, this plan does not require significant changes in the company. It is less costly and workable in the US mobile market. Working with companies like Microsoft can help to build its own innovative culture. The firm needs some operational shifts to satisfy its stakeholders such as customers in the market. In the United States and other countries, all recovery strategies are triggered by the customer’s needs and wants. It seems a successful trend integration, which could have been done years before. Now is still the best time to move on and execute the plan in an effective and lucrative manner.
It is to mention that selling the business to companies like Microsoft is not an option that goes in favor of this technology giant. Companies such as Microsoft, Google, Samsung, and Apple are developed due to high brand image and customer loyalty. The company had to take this step to survive the business in the United States and other regions. The purpose is to retain growth and market leadership. It is a good beginning, and Nokia has to do more to meet the objective.
Conclusion
In the end, it is to conclude that Nokia must execute the business continuity plan effectively. Despite containing some threats and the existence of an acute crisis in the competitive landscape, the firm is still capable of shifting the business operations. A comprehensive analysis of the general turmoil and the pivotal crisis has been done in this study. Apart from it, a comprehensive business continuity plan is the first step for this technology giant to move on and come up as a different organization for all key stakeholders. The business continuity plan has been presented to this company to improve both the internal and external business environment. It looks like a long journey to get an advantage in the presence of significant technology or mobile phone giants. Nokia, on the other hand, has to take baby steps to get rid of these crises.
Click to read Crisis Management: A Case of Nokia-Proposal
References
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