Microsoft Corporation has been one of the most competitive companies in the United States and the entire world. Microsoft Corporation is a company based at the United States in headquarters is at Redmond, Washington. This is a multinational company whose product brand and technologies developed therein, has attracted consumers all over the world and which every company or organization, whose productions are computerized, has been using in terms of Microsoft software (Anandan& Blake, 2004, P. 13). Mostly, the companies brand and product line have always been computer software, personal computers, electronics and a line of operating systems, just to mention a few. Yearly, the company makes profits all over the world in terms of millions of dollars. This organization enjoys autonomy and monopoly in its line of production when it comes to the development of some software and operating systems, which are known and preferred in the consumer market in the world over.
Nokia is yet another international telecommunications industry with headquarters based at Espoo. The company has enjoyed the production of a variety of digital and analog devices with the mobile phones and accessories being the most defunct. The operations of Nokia as an organization has been in effect from the year 1966, and the organization has been employing some strategies, which made the organization have the most, preferred line of products all over the world. However, owing to the fact that technology is dynamic and the modern competitive business world some strategies employed in the recent years saw to the losses registered by the company that resulted to its selling to Microsoft Corporation.
This paper critically surveys the strategies implemented by Nokia Company and Microsoft Corporation, which has always made them unique. Further, the paper analyses the miss – steps and errs which Nokia Company made leading to the decline in its market dominance and final sale to Microsoft Corporation. The analysis ought to be done in light of the standards and methodology set in the module, providing light for those interested in engaging in business. Further, there are recommendations provided in light of the decisions by this defunct organization. Both of these companies (Microsoft Corporation and Nokia Company) are found in the New York Stock Exchange.
2 Strategic Initiatives of Nokia and Microsoft Corporation
Strategic initiatives concern the directions and values adopted by an organization for the purposes of accomplishing its long-term objectives. Nokia and Microsoft Corporation have made a series of decisions, which are very critical and have aided in the downfall and success of both companies largely.
2.1 Strategic Initiatives of Nokia
Nokia has been a leading telecommunication company until the recently (2013) which saw to the sale of its mobile division to Microsoft Corporation. The greatest strategy employed by Nokia, which failed to pan out as deemed, was shifting to the production of phones with windows 8 operating system as opposed to the popular android phones that were cheaper and more preffered by the industry. This move led to the decline in sales of Nokia phones. This paper analyses the strategy employed by Nokia in the production of windows phones shifting from Bada operating system.
2.2 Strategic Initiatives of Microsoft Corporation
Modern day computing has gone through a series of transformations right from the onset of the main frames that were large to the modern palm tops, which can be carried from home to business organizations. Microsoft Corporation identified the loopholes in computing and sort out to come up with the operating systems which made it easier to make computers portable along with computer accessories such as the hard drives to make them fully functional with enhanced high speed. The move to come up with the windows operating systems by Microsoft Corporation changed the modern computing. There has been a major transformation in the windows operating systems such as windows 8, 8.1, 8.1 pro, 7.6, and windows XP just to mention a few. This placed Microsoft Corporation at the top of the telecommunications industry, the company remains the leading producer and developer of software, operating systems, and Microsoft office documents that are preferred the world over. This is an example of a company with strategies which have worked out in assisting the organization achieve its goals and objectives. The selection of the operating systems and patenting of the development process coupled with other products was a sure move for Microsoft Corporation. This paper analyses the strategy employed by Microsoft Corporation in diversifying its production from operating systems to computers, phones and hardwares.
3. Analysis of the Strategic Initiatives
3.1 Strategic Purpose
3.1.1 Strategic Purpose of Microsoft Corporation
The purpose of Microsoft Corporation is quality service to consumers; the organization goes on further in providing warranty to the consumers. Therefore, the Corporation has invested heavily in building an image of quality to the clients placing first priority in customer satisfaction as opposed to the profits earned from the product line that the organization deals in. The software sold from Microsoft Corporation is very legit. For example, the operating systems – windows XP, Vista, 8, 7, and 10 – are of high quality. Moreover, the products are highly preferred by clients. The uniqueness of the brand and the product line has made the company the only organization that is at the apex of the operating system ladder.
The organization also highly invests in its employees. Most of the employees at Microsoft Corporation are experts with multi – skills keeping in touch with the current developments in technologies and the world of modern computing and development. The employees are equally well paid. Therefore, most services at Microsoft Corporation are not outsourced. Outsourcing refers to the transfer of non – core business process and operations to a third party with an equal service level. This is avoided by Microsoft Corporation in order to avoid spilling their production strategies to a third party that might let it out to the competitors. Moreover, the organization has patent for most of its operations therefore, leading to autonomy in its product line, particularly in the production of the operating systems.
Advertisement strategies of Microsoft Corporation are also well updated. The products and services of the organization can be found in the company website and other social media platforms. The profits earned by the organization are enormous because the product line is very competitive. For example, whenever an individual logs in to Microsoft website or opens a personal computer online money gets to Microsoft Corporation. Further, the Microsoft products are highly demanded in the market because of their legitimacy and quality. The organization is composed of both legal, sales and technical professionals who take keen interest in the operations of the organization ensuring that the products and services offered in the organization remain legit.
Finally, the organization has prices which conform to the quality of the products and affordable to most consumers as opposed to its competitors such as Apple Inc. Apple Inc. appeal to a certain class of rich people who can afford to purchase their computers and operation system (MAC). This non – restrictive strategies employed by Microsoft Corporation has captured a wide range of customers. The organization has a future because of its flexibility in production, hiring professionals, advertising strategies and monopoly that keeps it at the crest of production.
3.1.2 Strategic Purpose of Nokia Company
Nokia Company on the other hand, had sound strategy in beating competition before the company’s mobile industry got into receivership by Microsoft Corporation in 2013. Formerly, the product line for the organization, mostly mobile phones, was unique and preferred by most consumers. However, a simple miss – step that included lack of flexibility in their production line led to a decline in its production. The company was a price leader from 2006 until its decline in 2013. This came because of competition employed by other mobile companies such as Apple Inc., Samsung, and Google. Some of these companies came up with very cheap line of products, which were of better quality than the ones brought by Nokia. One of the biggest mistakes made by Nokia was dropping the option of using android as an operating system, which was renowned, and fast rising and insisting on its use of windows.
Nokia therefore, became inflexible in its pricing and line of production. Competition in computing and other technologies goes hand in hand with flexibility and conformance with the trends in the market. Nokia had its merits in its methods of production and marketing strategies. The blunder was in sticking in its ways of production and production lines while disregarding the policies and methods used by the competitors to capture the market without necessarily compromising on quality. The sale of the handset division of Nokia Siemens Corporation was thus sold to Microsoft Corporation. The decline of this organization was contributed to by some form of persuasive bureaucracy and this led to an inability to perform as deemed.
The organization also had strategies, which failed to work because there was some dangerous internal competition and lack of identification of the brand and quality of first rising products such as the iPhone. This led to a decline in the demand of Nokia Products in North America. Although Nokia was an innovative and competitive organization like Microsoft Corporation, the difference set in because the management of Nokia refused to implement the innovations suggested by experts in the company. However, the common bond that both Microsoft Corporation and Nokia Company had was in the production of quality services and products coupled with being market leaders between 2006 and 2013. The move by Nokia,to decline in adopting android operating system due to fear of Samsung, was uncalled for and less calculated because an option of producing a diverse line of products, and leaving it out for the consumers to do the picking, would have been the best choice.
3.2.1 Industry Attractiveness of Microsoft Corporation
Microsoft Corporation and Nokia Company enjoyed profits due to the attractiveness of their industry. On one hand, Microsoft Corporation was a price leader and a monopoly to a line of products such as the operating systems and other services, which were a competitive advantage. On the other hand, Nokia Company enjoyed uniqueness in the mobile industry and other lines of production up until more innovative Companies like Apple Inc. and Samsung begun engaging in price wars and product uniqueness in the year 2013. The mobile phone market is very competitive and requires constant innovativeness because new models of phones stream in the market every single month. The iPhone and Mac operating system by Apple Inc. has been a great competition for the products of Nokia and Microsoft Corporation. This is because the Mac operating systems is unique in its operation and its efficacy is resounding. Mac is not susceptible to viruses and hacking like the Microsoft products, which require constant system update and maintenance.
The operating system of Mac operating system allows only private access, which are only products from Apple Inc. as opposed to other devices bearing the android operating systems and products from windows. Moreover, just like Microsoft Corporation has highly invested in patenting their operating systems and software, so has Apple Inc. The brand and logo of this company is much better in comparison to Microsoft and Nokia. Therefore, such companies posed as threat to Nokia making the market and industry very unattractive because of lack of certainty of continuity in production. The aim of any business enterprise is continuous production and to stay in business for a very long time, both industries in which Nokia and Microsoft Corporation belong to are very competitive and very unattractive, once an organization hits the depression, it is quite a toil to get back to its competitive glory.
3.2.2 Industry Attractiveness of Microsoft Corporation
The difference between Nokia and Microsoft Corporation in terms of industry comes in in terms of the strategies, which they implement in an effort to effect performance (Roberts, 2014, P. 12). For example, Microsoft Corporation purchases the mobile division of Nokia Company and rebrands the phones naming them Microsoft. The new Microsoft phones are fast rising and their strategies are working out because the company is fabricating their windows models and operating systems making them attractive to consumers. Quality of the operating systems and reliance is much better than the ones of android operating systems. While Nokia feared diversity in the use of android operating system, Microsoft Corporation took the chance to purchase a company that it knew very well is going down and rebranded the organization. One company takes challenges and opportunities while the other is insistent in maintaining the status quo (Nokia Company). Dealing in the business line of mobile phones, accessories and computers require constant innovativeness and creativity, which Microsoft Corporation unlike Nokia Company possess (Steinbock, 2001, P. 35).
3.3.1 Competitive Advantage of Nokia
Formerly, Nokia Company had competitive advantage over such companies as Samsung and Apple Inc. up until these companies came up with the mac and android operating system respectively. Nokia company as a price leader feared stepping up to the challenge as the most preferred product with the management thinking that quality and standards set by the Company was to maintain the company at the tip of the iceberg when it comes to mobile devices production. However, the market had greater preference of android operating system in comparison with the windows operating system offered by Nokia Company hence leading to a decline in the sale of Nokia products in North America and most destinations in the world where this company played monopoly. Therefore, Samsung and Apple Inc. became the new market leaders because of their competitiveness and flexibility of pricing and production.
3.3.2 Competitive Advantage of Microsoft Corporation
Microsoft Corporation deals in software and operating systems and computers with their accessories. The industry is very competitive and requires constant innovation and creativity (MacCormack&Iansiti, 2009, P.43). The company has continuously produced competent products both in in the world market and the domestic market (United States). This is to mean that the organization still remain a monopoly in producing quality products in the entire world despite the competition that it faces from organizations such as Apple Inc. and others like Samsung. The competitive advantage is in terms of the unique nature of the Microsoft Corporation and the diversity in its product line. Moreover, the lawcomes in handy in ensuring that no organization that duplicates the products produced by Microsoft. The organization therefore has an advantage of patent rights, particularly, the windows operating systems.
The continuous systems update, uniqueness of providing warranty and quality of the products appeal to the consumers creating customer loyalty and trust. The attitude of the management of Microsoft Corporation coupled with the willingness to take calculated risks puts the organization at the apex of competition ensuring that the organization rises above the competition that it faces from time. In Microsoft, there is no need to maintain the status quo, resources are channeled toward conducting market research and keeping track of the demands of the target clients and providing services in light of such demands. Microsoft Corporation thus takes each challenge as a puzzle to be solved as opposed to Nokia Company.
In business, change is the only constant. Companies and employees therein have a different reaction to change. Mostly, there is a high incidence to opposition to change especially, depending on how drastic it has occurred or on how it has been communicated to organizational employees (KAUTTO, 2009, p. 51). There have been massive changes at Microsoft Corporation. The methods that have been employed in communicating the changes reveal flexibility and logical thinking. The process employed in the organization when it comes to employing change is the involvement of the management and employees alike in the organization way before the change is in effect.
3.4.1 Change Management at Microsoft Corporation
These changes take place whenever a new product is introduced in the organization and whenever the preference of the consumer’s changes. For instance, when the complaints about the complexity in operation of windows 8 operating systems hit the headlines, the company set off to rectify the situation by first teaching the customers on the use of the windows and introducing updates to make the operating system more user friendly (Pittel, 2014, P. 29). Consequently, the Microsoft Corporation came up with windows 10 which is more user friendly and with an easier interphase. Moreover, the product line dealt in with the company requires constant change in order to appeal to customers, thus the requirement to conform to changes in market demands.
3.4.2 Change Management at Nokia
Nokia had been conforming to change favorably in the market up until 2013 when the organization tapped out. The organization failed to adjust to the call of installing an operating system (android) on mobile phones, which was more appealing to the customers as opposed to the windows operating system. This was one of the reasons for the fall of this multinational organization. Therefore, more competitive and flexible organizations rose to the occasion by producing diversified products, which won the public confidence coupled with their pricing (Apple Inc. and Samsung Company Ltd). Nokia therefore proved to be inflexible in terms of change, which resulted into its downfall. Competition calls for flexibility in change management which organizations ought to comply with in order to remain in business – something that Microsoft Corporation has been adjusting to particularly well.
3.5 Option Evaluation of Nokia and Microsoft Corporation
3.5.1 Option Evaluation of Microsoft Corporation
Microsoft Corporation is one such organizations, which has survived in the market because of its competence in terms of adjusting favorably to the options, which are laid down (Anglin, Cannon, Dawson & Martin, 2004, P. 37). One of the options has been in the diversification of the products and the product line, which has been a contributory factor to its success. For example, when Microsoft was faced with the challenge of the complex nature of windows 8 causing complaints among its customers, the company had an option of ditching the product or immediately coming up with another better version. The organization therefore, decided on updating windows 8 to windows 8.1 and subsequently to windows 10 through systems updates for those who had earlier purchased windows 8 at no charge. These are indeed constructive thinking. The decision to purchase and rebrand the mobile division of Nokia was also a calculated sound action.
3.5.2 Option Evaluation of Nokia Company
In 2013, Nokia Company made a poor decision in ditching the idea to synchronize android operating systems within its mobile phone product line and as one of its operating systems (Roberts, 2014, P. 13). This was a poor option because the company decided to collaborate with windows, which had certain operational complexities rendering it undesirable to consumers. Fear was a flimsy reason that led to the drop of the android option; the company could have diversified the operating systems and competed favorably with Samsung and Apple Inc. owing to the fact that it was the price leader at the time. Just like the poor nature of Nokia’s change management, wrong choices trashed Nokia’s future ambitions (Xia, 2012, p. 53).
Nokia was a competitive company from 2006 to 2013 when the company made a poor production option which saw to its downfall. Nokia is an example of such companies, which implement sound strategies until a single miss – step throws them off their cool and sends them packing from business. This company is a definition of poor choices, change management and poor business model. However, Microsoft Corporation has continued its growth and expansion plans because of its flexibility in product line and soundness in strategies, which other companies worldwide ought to employ (Pemble, 2001, P. 33).
Strategy – Long-term plans that a business organization puts in place to legally beat its competitors.
Industry attractiveness – this refers to the appeal of the market for products and services of an organization.
Competitors – competitors refers to organizations dealing in similar products, and targeting the same market.
Change management – change refers to the difference in arrangement or organization of a business enterprise or organization.
Nokia – a telecommunication company, which was renowned for the best mobile cell phones before 2013.
Microsoft Corporation–a leading telecommunications organization in the entire world mostly known for windows operating systems and the Microsoft word.
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