TABLE OF CONTENT

INTRODUCTION................................ ................................ ........................ 2

2.0 FINDINGS................................ ................................ ................................ .... 3
2.1 Context of Nokia business strategv and the significance of stakeholder analvsis .. 3
2.2 External environment and organi:ational audit of the companv .......................... 7
2.3 SWOT analvsis of the companv and strategic positioning techniques to the
analvsis of Nokia ................................ ................................ ................................ .......... 13
2.4 Current environment in Jietnam and possible consideration for strategic analvsis
of the companv and strategic plan for Nokia. ................................ ................................ 15
CONCLUSION................................ ................................ .......................... 20
4.0 REFERENCE................................ ................................ ............................. 21

INTRODUCTION
Nokia, a large Finnish industrial group, is known as one oI the most Iamous mobile
companies in the world. The Iirst century oI Nokia began Irom 1865 to 1967 through a
merger oI three companies: Fredrik Idestam's paper mill on the banks oI the Nokianvirta, a
cable company and a rubber Iirm to set the new Nokia Corporation on the path to
electronics. The new company was included in many sectors: paper products, bicycle and
car tires, Iootwear, personal computers, communications cables, televisions, electricity
generation machinery, capacitors, etc (Nokia, accessed 2008). In 1979, Radio telephone
company Mobira Oy merged with Nokia and he Iirst international mobile phone network is
built in 1981. AIter that, in 1992 Nokia decided to Iocus on telecommunications business.
Now, Nokia develops and grows in consumer Internet services, enterprise solution and
soItware, equipments, solutions and services Ior communications networks.
Nokia Corporation has the head oIIice in Finland and Research & Development
(R&D), production, sales and marketing around the world. With the device volumes 437
million units, operating proIit EUR 8.0 million and net sales EUR 51.1 billion in 2007,
Nokia is estimated to take 38 share iI global device market. The number oI employees in
Nokia is 112 262 people in which 30 415 employees work in R&D. Nokia now is known as
the world`s 5
th
most valued brand and the Iirst brand in Europe (Nokia Corporation, 2008).
To understand more about the success oI Nokia, in this report, I will deIine the
context oI Nokia business strategy and explain the signiIicant oI stakeholder analysis. The
external environment and organizational audit oI company are also identiIied. A SWOT
analysis oI Nokia will be conducted as well as applying appropriate strategic positioning
techniques to the company. Finally, through identiIying the external environment in
Vietnam, I will explain the possible consideration Ior strategic analysis and prepare a
strategic plan Ior Nokia.

$
2.1 Context of Aokia business strategy and the significance of stakeholder
analysis
Nowadays, Nokia, one oI the largest companies in the world, oIIers a wide range oI
mobile devices with various Ieatures including music, navigation, video, television,
imaging, games and business mobility Iacilities. We can say that one oI the reasons Ior this
success oI Nokia is clear vision and mission. According to the scenario, the vision oI Nokia
is 'To be the world leader in mobility, driving the transIormation and growth oI the
converging Internet and communications industries. Nokia aIIirms that they are a
consumer led company because they know people have the need oI communicating and
sharing. Thus, Nokia promises to connect people in new and better ways with truly
connected, independent oI time and place. ThereIore, 'Nokia`s strategy is to build trusted
consumer relationships by oIIering compelling and valued consumer solutions that combine
beautiIul devices with context enriched services (Nokia, 2008). From that, the mission oI
Nokia is 'The purpose oI Nokia Corporation is to satisIy the needs oI communication by
providing products and services with high quality and human technology to our customers.
In order to achieve both the mission and vision, Nokia has to set up not only
corporate objectives but also Iunctional objectives. According to Edexcel HND/HNC
Business (2004), objectives are speciIic outcomes that Nokia wishes to achieve by carrying
out its activities. The Iunctions oI objectives are enabling the overall objectives to be
divided into clear statements oI what needs to be done at each level, providing a Iocus Ior
all activities and targets Ior both individual and group achievement; Iacilitating the control
oI perIormance and providing the basic Ior evaluation. In third quarter (Q3) 2008, Nokia
estimated that the mobile device market share is 38, down Irom 39 in Q3 2007 and
down Irom 40 in Q2 2008. Thus, the corporate oI Nokia Ior Q4 2008 is to increase the
mobile device market share up to 42 by through product development and appropriate
marketing strategies. Increasing the proIit attributable to equity holders oI the parent by 5
over the last year`s Iigures through increasing sales, proIit margin, and improving
production methods is other objectives oI Nokia. Company has strong Iunctional
centralization structure, thus each department will have private objectives. As regard to
R&D department, they need to improve and develop new products and services to satisIy
customer demands. Increasing net sales up to 5 over last year`s Iigures is the Iunctional
objectives oI Sales department. Nokia`s mobile device volume in Q3 2008 is estimated to
4
117.8 million units. ThereIore, the Production Department`s objective is to increase the
mobile volume by 8 over the volume in 2007.
In accordance with Edexcel HND/HNC Business (2004), stakeholders have
suIIicient power to inIluence management`s choice oI strategy. Thus, stakeholder analysis is
important Ior the development oI knowledge and understanding about other organizations in
the company`s environment. There are three types oI Nokia stakeholders: internal,
connected and external stakeholders.
Internal stakeholders oI Nokia include employees and management as chairman,
CEO, CIO, CFO.. Both employees and managers, are connected directly with the
organization, so that, they have the strong inIluences on activities oI company. In addition,
employees and managers have similar goals such as security and increase oI income,
promotion, beneIits and satisIactions, saIety, working conditions, community, and skills
development. However, they also have their own interests. For instance, managers might
seek organizational growth over proIits, employees might seek high wages.
One example oI Nokia`s managers is Nokia Board oI Directors which consists oI the
ten members: Georg Ehrnrooth, Lalita D. Gupte, Bengt Holmstrm, Henning Kagermann,
Olli-Pekka Kallasvuo, Per Karlsson, Jorma Ollila, Marjorie Scardino, Risto Siilasmaa and
Keijo Suila.The responsibilities oI the managers are to control the activities oI the
organization, make strategies, evaluate the strategic direction and policies, assess the overall
riskand maximize the wealth. Another task oI managers is making interest oI shareholders
increase Irequently. Thus, when the company has the surplus Iunds, managers will invest
them in project to make the shareholders preIer the Iunds and make up their minds.
Managers make decisions; hence, they can have extensive or negative power as impeding
strategy, pursuit oI systems goals rather than shareholder interests, industrial action,
threatening to relocate, and resign (Edexcel HND/HNC Business, 2004). Nokia Corporation
has in total 112 262 employees all over the word. They are taking interest in the
organization`s continuation and growth. Employees, who are motivated, will do their best
ability, increase productivity, create better products, and give more eIIective ideas. One oI
Nokia`s goals is 'to enable employees oI diIIerent cultural or ethnic backgrounds, skills and
abilities, liIestyles, generations and perspectives to contribute their best to Nokia`s success
(Nokia, 2008). Employees also have some response risks to company such as negative
power to impede implementation, reIusal to relocate and resignation.
5
Besides, the connected stakeholders also aIIect directly on Nokia. Connected
stakeholders include shareholders, bankers, customers, suppliers, investors and some
universities. Number oI Nokia`s shareholders is large because Nokia is listed on 3 stock
exchanges: Helsinki, New York and FrankIurt. The shareholders own the company; thus,
their interest is what their investment becomes aIter a long or short time which can be
measured by the achievement, the proIitability and the dividends oI company. According to
Nokia`s dividends history, the dividend amount in Helsinki Stock Exchange is EUR 0.53
and in New York Stock Exchange is $0.834. In addition, the shareholders may concern with
company`s ethical perIormance or vote the rights. Shareholders can sell shares or replace
the management which can make the company vulnerable to take over.
Another connected stakeholder is credit investors. They concern with the growth oI
the company and their beneIits aIter investing company. The investors want to receive
regular inIormation about the organization including speciIic up date Ior credit analysts. In
addition, they want to be inIormed about the developments aIIecting both the group and the
utility sectors. Investors also need to have conIerences; meetings which are organize by
Nokia to get more inIormation. For instance, Nokia arranges Investor Days twice annually
and keep contact Irequently with the private investor community or a range oI investment
and research organizations, such as the Dow Jones Sustainability Index and FTSE4Good.
Nokia has large number oI customers over 80 countries in the world. Customers
want to receive acceptable quality goods and service with a suitable price and get Iuture
beneIits. They have signiIicant inIluences on the prices, procedures and even the growth oI
the company. Customers will determine what quality is necessary, what price is charged and
what development is needed. Through Ieedbacks, complaints, suggestions, choosing
whether or not to buy, and Iilling the questionnaires.customer can aIIect the company.
Thus, Nokia may get risks when customers buy somewhere else or sue the company. With
the consumers, company carries out 'comprehensive regional and worldwide brand surveys
as well as related Iocus-group discussions on an ongoing basis; stage issue-speciIic studies,
such as community involvement survey oI opinion leaders (Nokia, 2006).
Bankers are also interested in Nokia`s overall condition. However, they concern
with whether or not company can pay the loan. In another word, they care about the security
oI any loan, the adherence to loan agreements. They always want to limit or minimize the
risk oI interest not being paid. The risks made by bankers as disclamation oI credit, high
interest rate and receivership.also aIIect directly on Nokia. The last connected stakeholder
6
is supplier. Suppliers have interest in being paid promptly Ior goods and services delivered
and receiving regular repayments oI any capital provides. That means they concern with
their interests about their proIit and the long term relationship with Nokia. Moreover, the
suppliers also care about Iace-to-Iace meetings, assessments, contractual agreements,
training programs, and supplier-Iocused events. ReIusal oI credit, wind down relationships
and court action are the response risk oI suppliers toward company. Thus, in order to help
promote good perIormance and also to monitor compliance, Nokia carries out the supplier
assessment.
(Nokia, 2008)
Nokia`s external stakeholders involve government and nongovernmental
organization like interest/pressure group. We can say that government has a vital aIIect on
the success oI the company. The government` roles are passing laws to protect employees
and customers, collecting taxes such as VAT, income tax; helping exporters, legal actions,
and regulations. Government want to know that whether the organization meet legal
requirements and harm the environment or not. On the other hand, the policies or
guidelines oI government, tax increases, and legal action will aIIect on company`s
strategies. Local authorities are interested in the number oI local employees that company
can bring. Pressure groups are interested in pollution, rights and other issues oI Nokia.
These groups inIluence company through publishing business activities, political pressure
Ior changes in the law, and illegal actions.
We see that stakeholder analysis has the strong impact on the development and
position oI Nokia in global market.

External environment and organizati onal audit of the company
It is easily to see that the external environment aIIects directly on Nokia`s strategies.
The physical and social environments can be divided in to PESTEL Iactors: Political,
Economic, Socio cultural, Technological, Environmental and Legal.
The political and legal environment in Finland is relatively stable. The legal system
is clear and less bureaucratic (The Heritage Foundation, 2008). Finland joined the European
Union in 1995 and highly open to investment and Iree trade. The Ioreign investors are
welcomed with highly educated workIorce, stable policies, and excellent inIrastructure. This
is the Iavorable condition Ior Nokia Finland to attract potential investment. There is a heavy
tax burden and inIlexible job market which means that is more job market regulations.
However, the regulation in product market is less. According to The Heritage Foundation
(2008), property is protected by a transparent rule oI law, and Ioreign investors enjoy
excellent market access. Besides, Finland has a standardized monetary policy, virtually no
corruption, and business operations are not impeded by government bureaucracy. All
worker have to obey lengthy and bureaucracy imposing country wide contract. Although,
Nokia must Iollow law and regulations, company can take the advantages oI political and
legal Iactors.
Economic environment inIluences on Nokia at various levels. In accordance with
Central Intelligence Agency (2008), Finland has a highly industrialized, large Iree market
economy and telecommunication is its key economic Iactor. The largest industry is
electronic (21) and largest sector is service which contributes 65.7 to the GDP. In 2007,
GDP real growth rate is 4.5 and GDP oIIicial exchange rate is $245 billion. This is
average level in comparison with the global economy growth rate; hence, it is positive
impact toward Nokia. Beside that, the inIlation rate is 2.7. The low inIlation rate less
inIluences on selling price and low aIIects to Nokia`s business. Finland has moderate tax
rates. The income tax rate is 32 , and the top corporate tax rate is 26 . Other taxes
include a value-added tax (VAT) and a real estate tax. The income tax is higher than other
countries in EU. This makes the net income oI people lower; thus, they will spend less
money on consuming. This will be the challenge Ior Nokia in attracting customer. However,
the corporate tax is at medium level and the property tax is low. ThereIore, they have low
and minor eIIect to Nokia.
The population in Finland is 5,244,749 in which 16.6 Irom 0 14 years old,
66.8 Irom 15 64 years old and 16.6 Irom 65 years and over. People Irom diIIerent
8
social class with diIIerent ethnic background, religion, age, sex and work have distinct
needs which will inIluence company`s strategies. The labor Iorce is about 2.675 million and
unemployment rate is estimated to 6.9. The labor Iorce by occupation is agriculture and
Iorestry 4.4, industry 18.6, construction 6, commerce 16.3, Iinance, insurance, and
business services 13.9, transport and communications 7.6, public services 33.2
(Central Intelligence Agency, 2008). A worker in Finland can make EUR 25.1 per hour.
The income as well as the living condition oI Finnish people is higher than average
countries in European. In addition, 92 oI population uses mobile phone; hence, the
demand Ior telecommunication is high. This is the Iavorable condition Ior Nokia`s
business.
Prime Minister`s OIIice, Finland, (2008) claim that 'Finland is a leading inIormation
society in terms oI the utilization oI high technology products and communications
technology. The World Economic Forum`s Global InIormation Technology Report 2005-
2006, assessing the state oI economies` networked readiness, ranked Finland IiIth aIter the
United States, Singapore, Denmark and Iceland. For example, mobile phones are
particularly popular in Finland. Prime Minister`s OIIice website also stated that in 1998,
Finland became the Iirst country to reach the milestone oI 50 mobile phones per hundred
inhabitants. Today, there are 91 mobile phones per hundred Finns. In 2004, Finns wrote an
astonishing 2.1 billion private text messages. We see that, people are very keen on the
development oI technology. This requires Nokia to invest in researching and development
products in order to satisIy customer`s need. According to scenario, Nokia improves the
technology oI mobile phones based on WCDMA, GSM, CDMA and TDMA to 3G phones
which can be used to download TV, make video calls, watch TV and browse the web.
The physical environment has a consideration eIIect on organization`s operation.
Nokia also realizes that natural environment inIluenced directly on the success oI company
and protecting environment is the responsibility oI everyone as well as Nokia. ThereIore,
Nokia`s target is to be a leader in environmental perIormance. Company manages
environment issues based on liIecycle thinking. They take a cradle-to-cradle approach in
order to reduce environmental impacts in operations and throughout the liIe oI products,
including proper treatment and recycling at the end oI useIul liIe. Nokia also uses
Environmental Management Systems (EMS) and the ISO 14001 standard to control and
manage the environmental aspects oI production and large oIIices (Nokia, 2008).
9
Another external inIluence upon Nokia is the competitive environment. According
to Michael Porter (1966), there are Iive basic competitive Iorces: new entrants, suppliers,
buyers, substitutes and rivals.

(Value Based Management.net, 2008)
The power oI suppliers is shown through number oI suppliers in the market, size oI
suppliers, the uniqueness oI service, the strength and control oI suppliers over company,
company`s ability to substitute and cost oI changing. Nokia is cooperating with some
research tools, directory services, and suppliers oI Iirst class digital map to provide local
results quickly to customers. Although, technology in Finland is developed, the number oI
these suppliers is very little, and products and services they provide are not popular.
Moreover, it is hard Ior Nokia to Iind substitutive suppliers and the cost oI charging is also
high. ThereIore, the power oI suppliers toward Nokia is really strong. Nokia needs to have
suitable strategies in order to build long term relationships with suppliers.
Whereas, power oI buyer involves number oI customer, bargaining leverage, buyer
inIormation, brand identity, price sensitivity, threat oI backward integration, product
diIIerentiation, substitute available, and buyers` incentives (Internet Centre Ior Management
and Business Administration, 2007). Nokia has a large number oI customers over 80
countries in the world. Price oI Nokia`s mobile devices is quite sensitive to customers. In
addition, they can choose other companies because there are many companies supply
mobile devices Samsung, Motorola, Sony Ericsson.. People may choose products oI other
companies or compare the prices, designs, Ieatures oI products with competitors` price.
Consequently, customer will aIIect and set the price oI products. Besides, buyers inIluence
10
directly on the products such as the designs, types and Iunctions oI the mobiles. On the
other hand, they may think about other substitute products as telephone or beeper rather
than mobile. There are a lot oI choices Ior buyers when Iinding mobile telephone in the
market. Thus the power oI buyer is really high.
Another Iorce is threat oI substitute products. It happens when customers Iind other
product with similar Iunctions that can take place our product as telephone and beeper. We
see that 'a product's price elasticity is aIIected by substitute products - as more substitutes
become available, the demand becomes more elastic since customers have more
alternatives (Internet Centre Ior Management and Business Administration, 2007). Hence
we need to take care oI substitute perIormance and cost oI charge. Although telephone and
beeper is not so convenience as mobile, people still using them due to low price and low
cost. Almost households have a telephone in the house because it is aIIordable with average
and low income Iamily and it is also easy to use; while, mobile has more complicated
Iunctions. However, now people are much interested in mobile because oI its new
technology, Ieatures and convenience.
Furthermore, company has to concern about barriers to new entry because
appearance oI new mobile companies will aIIect the competition oI our company. Threat oI
new entry is about time and cost oI entry, specialist knowledge, economies oI scale, cost
advantages, technology protection, and barriers to entry
(http://www.mindtools.com/pages/article/newTMC08.htm). Finland is known as the most
advanced mobile phone market in the world. Though, time and cost oI entry is high and it
requested specialist knowledge about mobile and technology, entry barriers is low; hence,
the threat oI entrants is high. That requires Nokia to have appropriate and timely strategies
in anticipations oI the power oI new entries.
Rivalry among existing Iirms is one oI Porter`s Iive Iorces that company should
keep an eye on. Factors oI rivalry among existing Iirms are exit barriers, industry
concentration, Iixed costs/value added, industry growth, intermittent overcapacity, product
diIIerences, switching costs, brand identity, diversity oI rivals, and corporate stakes.
According to the scenario, with Nokia, Motorola and Ericsson Iighting it out at the top an
several less successIul brands like Samsung, Philips, Siemens and Panasonic trying to make
inroads into their top competitors` market share. The level oI company in the market
depends much on the brands, and what the brand names mean to customers. Furthermore,
the switching cost Ior company to converse to other industry and the exist barriers are high.
11
That increases the competitive power. ThereIore, Nokia should attach special importance to
quality and diIIerentiation oI products, brand and customer loyalty.
Beside the external environment, the internal environment as core competences also
inIluence on the Nokia`s business. 'The distinctive competence oI an organization is what it
does well or better than its rivals (Edexcel HND/HNC Business, 2004). Nokia has two
main core competences: competitive advantages oI products and services and competitive
advantages oI resources. As regard to the competitive advantages oI product and services,
Nokia provides to customer high quality product range Irom simple to complex with the
latest technology. That allows people to use mobile phones in valuable new ways. In
addition, Nokia designers also concentrate to improve the shape, color, design, and soIt key
touch pads. Based on the scenario, the shape oI phones is curvy and easy to hold. The
Iaceplates with diIIerent color are designed to Iit the personality, liIestyle and the mood oI
users. The soIt key touch pads add to the Ielling oI Iriendliness, expressing and the bland
personality. Moreover, mobile has many modern Iunctions: download music, make video
call, watch TV on the move and browse the web. Nokia`s Iirst commercialized consumer
environmental service is MobilEdu. 'It provides wireless learning that integrates device,
content, and service Ior mobile users to learn and share in an eIIective and eIIicient way
'(Nokia, 2008). All oI these are made to meet the customer`s need Iully.
Nokia`s resources that can bring the competitive advantages are brand, good
Iinancial situation, technology, human resources, distribution channels and marketing
capability. 'Improved perIormance in 2007 has catapulted global mobile handset equipment
leader Nokia to the world's IiIth most valuable brand, worth Euro 35 billion aIter Coca
Cola, MicrosoIt, IBM and General Electric (RediII.com India Limited, 2008). This will be
the most competitive Iactor that other companies can not compete with Nokia. Beside that,
with good Iinancial situation (the operating proIit is EUR 1469 million in third quarter
2008); Nokia has the positive position when competing. Nokia specially Iocus on the
technology and research and development. For instance, Nokia launched its Iirst 3G phone
in 2002 and aIter 2 years, Nokia`s Iirst phone with built in camera and Iirst video capture
phone was launched. In addition, Nokia has a well trained and committed staII. Company
opens dialogue about perIormance and opportunities Ior development helps to motivate the
employees. Company also encourages managers to coach employees continually as well as
having at least one Iormal personal development discussion every year (Nokia, 2008). The
success oI Nokia depends much on the staII; thus, this will be the competitive advantage Ior
company. Nokia has a wide range oI distribution channels and high marketing capability.
12
Example, Nokia has representatives Irom 23 operators and more than 400 Nokia Ior
Business Channel Program participants Irom around the world. All oI them create
competitive advantage Ior Nokia in the competition with other rivals.
In organizational audit, the value chain which groups the various activities oI Nokia
also be assessed. From the value chain, Nokia can secure the competitive advantage in
inventing new ways to do activities, combining activities in better ways, managing the
linkages in its own value chain, and the value system (Edexcel HND/HNC Business, 2004).
In addition, through value chain, company can Iind out which activities can add value to
both customers and company.
72
317,897:.9:70
Head oIIice in Finland
Branches are located all over he world

:2,3
7084:7.0
Recruitment
oI staII
Competent and powerIul management team
Well trained and committed employees
Technology
development
R&D centre and
marketing

Human
technology
Various
product
designs,
Iunctions

Consumer
research &
surveys

Procurement Own brand
products

Warehousing
High quality
and
environment
Iriendly
material
Communications
networks
Adverts in
easy to see
places: TV,
magazine...
Human
technology

Market
communication

Small pack
size
Latest
technology

Various range
oI mobile
devices

Improve
communications
and new ways
to exchange
inIormation

Wide range oI
retail stores
Nokia Siemens
network
Marketing
slogan
Advertisement

Personalized
brand

Focus on
customer
relationship

AIIordable
price

Market centre
Consumer
internet
services

Nokia Maps
services:
NAVTEQ`s
map data

Nokia prepaid
tracker
Inbound
logistics
Operations Outbound
logistics
Marketing
and sales
After Sales
Service
13
Through the value chain, we see that Nokia is good at the Marketing and sales,
procurement, and technology development. From that, Nokia can improve these activities in
order to satisIy customers` need and get proIitability.
SWO1 analysis of the company and strategic positioning techniques to the
analysis of Aokia
In order to know the strengths, weaknesses, opportunities and threats oI Nokia in
relation to the internal and external environment Iactors, we use the SWOT model.
Strengths
FiIth most valuable brand in the world
The largest mobile phone company in
market
Strong connection between R&D and
Marketing
Wide distribution channels
High product quality with latest technology
Well trained and committed employees
Weaknesses
Limited designs compared with other
competitors
Slower expansion oI the wireless industry
Limited games soItware in mobile
Opportunities
Customer`s demand increases highly by
satisIying customer`s needs
Increase the market share
New growth market
Wide supplier network
Threats
The threats oI being displaced Irom
competitors
New competitors with new brand and
technology
Lose customers


In current time, Nokia has a lot oI strengths. According to one brand valuation study
in 2007, Nokia was World`s 5
th
most valued brand, 1
st
brand in Asia and 1
st
brand in
Europe. In addition, Nokia takes 38 oI global devices market share in 2007. Based on the
case study, the Nokia`s net sales was EUR 51.1 billion and operating proIit EUR 8.0 billion
in 2007. That makes Nokia become the Iirst manuIacturer oI mobile devices. Nokia has
strong Iunctional centralization structure with the cooperation between R&D and Marketing
and competent and powerIul management team. From that, commitment oI employees is
the strength oI Nokia. Moreover, Nokia provides high quality products and has a wide
14
distribution channels. From the strengths and environmental Iactors, the opportunities Ior
Nokia will be the increase oI customers` demand, the increase oI the market share, new
market and supplier due to the development oI 3G phone. However, Nokia`s products have
limited designs when comparing with other competitors` such as Motorola, Ericsson.
Customers also complain about the limitation oI game soItware in mobile phone. Nokia
threats come Irom the new competitors who may have new brand, skills and technology.
Although, 3G phone has many Iunctions as download music, make video calls, watch TV
on the move, browse the web, Nokia is still threaten oI being replaced by other competitors.
Finally, the most important threat with Nokia is losing customers. The customers may not
satisIy with Nokia`s products and choosing other brand - name mobile with nicer design and
cheaper price.
From the SWOT analysis, company can adopt appropriate competitive strategy
which means 'taking oIIensive or deIensive actions to create a dependable position in an
industry (Edexcel HND/HNC Business, 2004). There are three basic generic strategies:
cost leadership, diIIerentiation, and Iocus. Cost leadership and diIIerentiation are industry
wide strategy. According to Edexcel HND/HNC Business (2004), cost leadership strategy is
based on the position oI lowest cost producer in industry as a whole. To achieve this
strategy, company needs to have tight cost control, Iunctional organizational structure.
Whereas, the diIIerentiation strategy is based on the particular characteristics oI company`s
products. In order to create the diIIerentiation, company needs to build up a brand image,
give product special Ieatures and exploit other activities oI the value chain. Focus strategies
includes cost Iocus and diIIerentiation Iocus. With this strategy, company concentrates in
particular segments oI the market. It requires the combination oI policies in cost leadership
and diIIerentiation strategies at particular strategic target and market segment.
Based on all the above analysis, we see that diIIerentiation strategy can be applied to
Nokia. Firstly, Nokia has strong marketing capability. Nokia has Iamous brand name,
marketing slogan 'Connecting people and 'Human technology and a lot oI
advertisements in easy to see places as TV, magazine or newspaper, websites or
billboards on highway. in accordance to the scenario, Nokia Iocus on the customer
relationships and its personality is like a trusted Iriend. Building Iriendship and trust is at
the heart oI Nokia brand.
Besides, Nokia also has strong R&D capability. Nokia has 30 415 employees work
in R&D in total oI employees 112 262 people. As oI April 1, 2007, Nokia had R&D centers
in 11 countries and employed 14,500 people in research and development, representing
15
approximately 32 oI Nokia`s total workIorce. R&D expenses totaled EUR 3,9 billion in
2006, representing 9,5 oI Nokia`s net sales in 2006, compared to 11.2 oI net sales in
2005 and 12.9 oI net sales in 2004 (Nokia, 2008). Nokia develop a wide range oI products
as mobile devices with services and soItware that enable people to experience music,
navigation, video, television imaging, games and business mobility. Furthermore, Nokia is
the pioneer oI providing 3G phone. At the same time, based on the case study, mobile
communications is converging with computing, digital, imaging and the internet, making it
possible Ior people to use handheld devices Ior Iilming video, listening to music, playing
games, surIing the web. For over 42 years, Nokia has a long tradition in the industry. It is a
good condition Ior Nokia to adopt diIIerentiation strategy. In addition, according to Olli
Pekka Kallasvuo President oI Nokia, company has a strong connection and cooperation
between R&D and Marketing. The heads oI marketing and R&D work side by side and
closely together on new models. Nokia rewards employees competitively through a global
reward Iramework designed to recognize individual contribution and achievement (Nokia,
2008). Company also oIIers an integrated package oI classroom training, on-the-job
learning, individual coaching, and mentoring to encourage people to learn through active
participation by trying new roles at Nokia. ThereIore, company also has the abilities to
attract highly skilled labor. In addition, buyer needs and uses oI mobile phone are diverse.
Thus, Nokia has all the advantageous condition to adopt the diIIerentiation strategy.

Current environment in Jietnam and possible consideration for strategic
analysis of the company and strategic plan for Aokia.
According to the scenario, we see that the vision oI Nokia still is 'To be the world
leader in mobility, driving the transIormation and growth oI the converging Internet and
communications industries. Nokia aIIirms that they are a consumer led company because
they know people have the need oI communicating and sharing. Nokia also promises to
connect people in new and better ways with truly connected, independent oI time and place.
The mission oI Nokia is 'The purpose oI Nokia Corporation is to satisIy the needs oI
communication by providing products and services with high quality and human technology
to our customers.
In order to achieve both the mission and vision, Nokia has to set up not only
corporate objectives but also Iunctional objectives. The corporate oI Nokia in Vietnam is to
increase the mobile device market share up to 35 by through product development and
appropriate marketing strategies. Investing 7 oI proIit Ior each year to improve and
develop product range is other objectives oI Nokia. Company has strong Iunctional
centralization structure, thus each department will have private objectives. As regard to
R&D department, they need to improve and develop new products and services to satisIy
customer demands. Increasing the number oI customer by 5 is the Iunctional objectives oI
Sales department. ThereIore, the Production Department`s objective is to increase the
mobile volume by 8 over the volume in 2007. As regard to the Finance Department, the
objective will be producing monthly reports quickly within 7 days end oI each month.
When Nokia does the business in Vietnam, Nokia also needs to conduct an
environment audit to Iind out what Iactors inIluence on the company.
AIter economic innovation in 1986, Vietnam has open market with many countries
in the world. Thus, there is not much law restricted on the selling and marketing oI goods.
In 2008, Vietnam GDP real growth rate is about 8.5 and CPI is about 25 (Central
Intelligence Agency, 2008). That Iigure shows that Vietnamese people`s living standard is
increase and they spend much money on purchasing thus the demand Ior goods and services
also increase. Especially, mobile demand is increase strong in recent years. Five years ago,
there is about 2 million oI Vietnamese people used the mobile phone, and now this number
increase to 18 million people (Computer Communication Control Inc, 2007). Although,
salary oI a white collar is about $300 per month and cost $9 Ior an hour using mobile
17
phone, the number oI mobile still increase. However, the inIlation rate in 2008 is about
22; hence, people will care much about price oI product as well as the quality oI products.
Besides, socio culture Iactors in Vietnam also aIIect on Nokia. Vietnam population
is 86,116,560 people in which two thirds oI the population is under 30 years old. Due to
Vietnamese young population, Vietnam is a potential market Ior Nokia. In addition,
company also can attract young, skillIul employees because the labor Iorce is about 46.42
million (Central Intelligence Agency, 2008). On the other hand, the demand Ior mobile
phone gathers mainly in big cities as Hanoi, Ho Chi Minh City, Hai Phong, Da Nang, Nha
Trang. However, people diIIerent social class might have diIIerent need Ior the mobile
phone. For example, people who have low and average income are more interested in cheap
price mobile phone while, high income people are keen on Iashionable, modern and
Iunctional mobile. The liIestyle and personality also aIIect the demand oI Nokia mobile
phone. Because oI young population, Vietnamese people care much about the technology
development as the way in which products are made, and the way services and products are
provided. Mobile with modern Iunctions, high technology attracts a lot oI customers. At the
current time, Vietnam does not have tight regulation oI the environment. However,
company should have environment protecting activities to show the responsibility oI
company toward the development oI the country.
Five Iorces Iactors are also analyzed to understand the external environmental
Iactors that aIIect company. Nokia is also cooperating with some research tools, directory
services, and suppliers oI Iirst class digital map to provide local results quickly to
customers. Although, the number oI these suppliers is very little in Vietnam market, and
products and services they provide are not popular. Moreover, it is hard Ior Nokia to Iind
substitutive suppliers and the cost oI charging is also high. ThereIore, the power oI suppliers
toward Nokia is really strong. ThereIore, Nokia needs to have suitable strategies in order to
build long term relationships with suppliers.
Nokia has a large number oI potential customers in Vietnam market. Price oI
Nokia`s mobile devices is quite sensitive to customers. In addition, they can choose other
companies because there are many companies supply mobile devices Samsung, Motorola,
Sony Ericsson, WellcoM, iMobile.. People may choose products oI other companies or
compare the prices, designs, Ieatures oI products with competitors` price. In the market, a
Chinese mobile with nice design and cheap price which aIIordable to low and average
income people attract a lot oI customers. Thus, the switching cost Ior customer to converse
Nokia mobile to other brand name one is low. Consequently, customer will aIIect and set
18
the price oI products. Moreover, buyers inIluence directly on the products such as the
designs, types and Iunctions oI the mobiles. On the other hand, they may think about other
substitute products as telephone or beeper rather than mobile. There are a lot oI choices Ior
buyers when Iinding mobile telephone in the market. Thus the power oI buyer is really high.
Another Iorce is threat oI substitute products. It happens when customers Iind other
product with similar Iunctions that can take place our product as telephone and beeper.
Hence Nokia need to take care oI substitute perIormance and cost oI charge. Although
telephone and beeper is not so convenience as mobile, people still using them due to low
price and low cost. Almost Vietnamese households have a telephone in the house because it
is aIIordable with average and low income Iamily and it cost less than mobile phone.
However, now people are much interested in mobile because oI its new technology, Ieatures
and convenience.
Furthermore, company has to concern about barriers to new entry because
appearance oI new mobile companies will aIIect the competition oI our company. Vietnam
is a potential market Ior mobile companies. Although, time and cost oI entry is high and it
requested specialist knowledge about mobile and technology, entry barriers is low; hence,
the threat oI entrants is high. Nokia is required to have appropriate and timely strategies in
anticipations oI the power oI new entries.
Rivalry among existing Iirms is one oI Iive Iorces that company has to Iocus on. In
current Vietnamese mobile market, there are many competitors against Nokia such as
Samsung, Motorola, Ericsson, Siemens, S Fone, Apple and Chinese and Thailand mobiles
as WellcoM, iMobile. Mobiles Irom China and Thailand with aIIordable price and various
designs will become big competitors against Nokia. The switching cost Ior company to
converse to other industry and the exist barriers are high. Thus, competitive power is also
high. ThereIore, Nokia should attach special importance to quality and diIIerentiation oI
products, brand and customer loyalty.
A SWOT analysis is conducted to understand the strengths, weaknesses,
opportunities and threats oI Nokia in Vietnamese market.





19
Strengths
Famous brand
High product quality with modern and
useIul Iunctions
Connection between Marketing and R&D

Weaknesses
Limited product range
Limited design about shape, color
Limited games in mobile
Lack oI diIIerentiated products as I phone
oI Apple

Opportunities
Take the largest market share in
Vietnamese mobile market
Mobility industry develops sharply
SatisIy young customers with new
technology

Threats
Threats Irom current competitors
Threat Irom new competitors as Chinese
and Thailand company
Lose customers

Through the above analysis, we see that, the price competition among rivals is the
dominant Iorces because Vietnamese people care much on the price when purchasing
product. In addition, with many choices in the market, the switching cost oI customer to
change the sellers is low. Especially, the number oI buyers is large and they have strong
bargaining power. Moreover, Nokia in Vietnam has sustained capital investment, limited
product range, and Iunctional organizational structure. In addition, Nokia uses latest
technology to reduce cost and enhance the productivity. ThereIore, in Vietnamese market,
Nokia may adopt cost leadership strategy. However, Nokia can apply diIIerentiation
Iocus strategy Ior high income customer segment. With these segmentation oI customers,
the demand Ior unique or diIIerentiation is incentive than price. Hence, applying
diIIerentiation Iocus strategy will attract a lot oI customers Ior company.


&$
Nokia is trying to be the world leader in mobility, driving the transIormation and
growth oI the converging Internet and communications industry. With the external and
internal environment audit, the SWOT analysis, Nokia can adopt appropriate strategy. In
diIIerent market or country, Nokia needs to conduct particular environmental and
organizational audit to Iind out the most suitable competitive strategy Ior company.

##
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