Strength
Nokia is the largest producer of cell phones and has the advantage of having the largest distribution network in the world. The nokia mobile phones have a reputation for durability, reliability, and innovative designs that captivate the customers. These have given the company’s products an edge in the cell phone industry. The company’s financial stability is very strong hence giving it a better position for investments.
The company enjoys a very high return on equity, RON, high return on assets, ROA, as well as a high net profit margin, NPM (Clark, 2013). Nokia has been leading as a mobile phone giant in the cellular industry for quite some time now. This has helped the company to grow in popularity and consumer preference. The company has strong research and development facilities that have helped it to grow and meet consumer expectations. Diversity in the workforce and advanced technology are among the strengths of the company (Clark, 2013).
Weaknesses
By the year 2010, Nokia’s profit had gone down by a record 40% (Clark, 2013). In addition, the price of nokia phones was challenged by the entry of cheap handsets from China. This affected Nokia’s sales significantly hence the drop in profits by such a high margin. The United States of America is a major world market for electronic gadgets especially mobile phones. Nonetheless, Nokia’s presence in the US is very low. Nokia’s position in the Japanese market is also significantly lower despite the fact that Japan is a major market (D’Altorio, 2010). Concisely, Nokia’s presence in the big cell phone markets is very low. Consequently, this is contributing to the factors leading to its decreasing influence in the industry.
Opportunities
The global cell phone industry is projecting a double-digit growth in the near future and this is a good opportunity for the nokia company to reposition itself to make a grand re-entry in the industry. There are also other emerging markets in the Asia-Pacific cell phone industry (D’Altorio, 2010). Nokia can take advantage of this new market since it has the capital base to cease the opportunity. The developing countries also are creating an untapped market for cell phones. The current trend of demand is going for fashionable handset and simplicity. Nokia led in the innovation of stylish phones which means it has the potential to take its position back and create stylish cell phones that would help the company come back to the top of the market. Targeting the youth is a guaranteed market for Nokia (D’Altorio, 2010).
Threats
Nokia’s greatest challenge is based on pricing considering the entry of china phones that are trading at extremely cheap prices. The market share has also been reduced with the entry of other players who have come into the industry for instance Samsung and Apple. Nokia is facing stiff competition from rivals in both pricing and technology. Nokia phones have maintained their original prices while other companies are developing new phones and reducing the prices for older models. This is proving to be a challenge for the Nokia Corporation. The corporation’s strategy is not competitive enough to catch up with the rivals. While other companies are improving their phones to match with the demand for wireless local loop WLL, Nokia is lagging behind with the CDMA phones (D’Altorio, 2010).
References
Clark, W. (2013). Nokia SWOT Analysis. Web.
D’Altorio, T. (2010). Nokia’s Precarious Position in the Mobile Phone Industry. Web.
