Nokia Case Study
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Nov 24, 2024
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Nokia Case Study
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Nokia Case Study
Question 1,
Strengths
Nokia posed as the leading manufacturer of mobile phones globally in the year the alliance was
formed. As a leading producer, the company enjoyed a large revenue of $ 55 billion and a $19
billion capital. Microsoft was also the leading software maker globally, with an average revenue
of $69 billion and a $266 capital. The alliance brought together these two giant companies with
increased revenues and capital, and the alliance succeeded in investing a significant amount of
money. Technologically, the two were giants, with Nokia being a market leader in mobile
technology and Microsoft leading the software technology. On competitive advantage, each of
the two companies had established itself as a strong competitor in various parts of the world.
Weaknesses
Nokia is losing its considerable market share due to its old technology. The company's
performance is in an increasingly deteriorating trend.
Opportunities
The strategy alliance formed by the two companies created a pool of opportunities for each of
them. The alliance created opportunities for each of them, with Microsoft seeing an opportunity
in Windows phone software. The same software can also benefit Nokia as the mobiles will be an
improved technology that can help the company greatly as it can make huge gains through such a
venture. The alliance allowed the two companies to use their vast resources optimally for
increased profits. Nokia produced Lumina mobile phones enabled with Microsoft Windows
technology through such an opportunity. Microsoft also benefited from such an advancement as
it increased its revenue significantly.
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Threats
Despite the large pool of opportunities and strengths, the alliance suffered from significant
threats. First, Apple was reaping a huge success from the production of iPhones. This was the
number one threat. Secondly, customers demonstrated immense love for Android mobile phones
that were cheaper and easier to use. Thirdly, mobile technology was fast changing, presenting
new challenges to the strategic alliance. Lastly, there is increased competition from other
technological companies.
Question 2,
Despite their strategic alliance, Nokia and Microsoft had many similarities and differences that
could affect the alliance's success. On the similarities, the two were the leading manufacturers in
their respective fields. Nokia was the market leader in the production of mobile phones, while
Microsoft was the market leader in the manufacturing of software technology. Both companies
enjoyed a good brand reputation with a large following in terms of customer base. Both
companies had a global presence operating in Asia, Europe and America. Lastly, both companies
have huge revenue and huge capitalization.
In contrast, the two companies differ significantly in operations and ventures. First, Nokia
focuses greatly on manufacturing smartphones and mobile phones, while Microsoft focuses on
software and services provision. Secondly, the two differ in market presence. While Nokia's
existence is largely felt in emerging markets, Microsoft's presence is felt in global markets. The
other aspect that presents some difference is that of competitive advantage. Nokia's long history
of operations enables it to reap from its competitive advantage in the mobile phone industry,
specifically smartphone production. Microsot's extensive experience in software development
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gives it a competitive advantage in software manufacturing. Lastly, Microsoft has significantly
ventured into the cloud computing market, but Nokia has not.