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MGMT314: Microsoft and Nokia

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Hanisha Kumar

on 12 August 2015

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Transcript of MGMT314: Microsoft and Nokia

Case Outline
1.0 Introduction and Case Overview
2.0 Situation Analysis
2.2 Internal Analysis
Market Drivers and Trends
1.0 Introduction and Case Overview
2.0 Situation Analysis
2.1 External Analysis
2.2 Internal Analysis
3.0 Resources and Capabilities
3.1 VRIO Framework
3.2 Value Chain Analysis
4.0 Issues and Recommendations
5.0 Ethics and CSR
6.0 Conclusion: Future Prospects
7.0 Reference List
Porter’s theory of competitive advantage suggests that a firm must decide for either cost advantage or differentiation advantage in their value creation.

Microsoft and Nokia enter into a partnership in February 2011.

Motive:
To combine strengths and harbour synergies

Goal:
To build a new mobile ecosystem combining Windows and Nokia smartphones: Lumia, Asha, etc.


2.1 External Analysis
Key Trends:
From a Strategic Management Perspective
Presented By:

Hanisha Kumar 4357310
Rana Adris 3753141
Aldane Healy 4538791
The Microsoft-Nokia Partnership
MGMT314
PESTLE Analysis
Porter's Five Forces: Smartphone Industry
Low
High Entry Barriers (Capital, Setup costs, Economies of scale, Technical requirements)
High Brand Loyalty is causing Market Saturation
Newcomers efforts can be contested
Moderately Low
In fact, the smartphone is becoming a substitute for regular phones, pagers, PCs, etc.
Complements like Notes, Mail, Maps etc
Some degree of Strategic Uncertainty
Moderate to Low
Suppliers of software and technology are usually in-house or well reinforced otherwise
Low
Switching costs
Many buyers
High
Rivals are of equal size
Fresh moves to counter rivals
All players aspire to be the market leader (Apple vs Samsung)
Political
3.2 Value Chain Analysis
Inbound logistics:
Microsoft can conveniently start the arrival action on items that come into the warehouse, and can see all the lines within a PO (Purchase order) that is set to arrive.
Operations:
Its conveyed through a network of reselling partners who administer specialized services.
Outbound logistics:
Shipping arrangement allow for quick and easy new shipment creation, which means faster alteration from order to and great customer satisfaction.
Marketing & sales:
Microsoft is trying out new contemporary marketing strategies to increase sales of its products.
Service:
Maintenance, and customer support is well achieved in Microsoft corporation, which over the years has been successful and over the top from its competitors service system.
(Harbaugh, 2014).

6.0 Future Prospects
3.0 Resources and Capabilities
3.1 The VRIO Framework
4.0 Issues and Recommendations
Issue 1:
Can Microsoft stay relevant in Mobile Phones?
Recommendation:
Focus on affordable phones for Emerging Markets (BRIC)

Issue 2:
Alliance Management: Can MS build and sustain a relationship of trust with Nokia?
Recommendation:
Microsoft must become more transparent. Share plans and reports with partners.

Issue 3
: Why is Nokia unable to cope with its competitors? Even after the backing of Microsoft? Silo-Politics?
Recommendation:
Fix Myopia and harbour an emotional climate to anticipate threats.
5.0 Ethics and CSR
Ethical business conduct and governance
More than 99 percent of Microsoft employees completed annual training on Standards of Business Conduct.
Serving communities
Microsoft's total annual giving surpassed $1 billion.
The Microsoft YouthSpark Initiative.
Office 365 for Non-profits in 92 countries around the world.
Disaster response.
Responsible sourcin
g
Corrective action plans for suppliers.
Hardware suppliers capabilities.
Human Rights
New privacy and data security.
Global Network Initiative (GNI) Phase III Assessment.
Environmental Sustainability
Carbon footprint (neutrality commitment).
All new data centers have an average 1.125 Power Usage Effectiveness (PUE).


China is predicted to remain the world's largest market for smartphones, providing low-cost handsets using Google's Android and to some extent, Apple's iOS.
Large Display Mobile Phones
Android-based smartphones
Rise of the Phablets
Increase in M-Commerce
2016 Forecasts: India and Brazil projected to enter the top 5 countries for smartphone shipments
Multi-Sim Smartphones
Multi-core processor
Usage of Mobile Internet
Can you think of any more?
Political environment is more or less stable.
There are however, strict internet regulations in some parts of the world.
Economical
Social
Data: 2011 US Smartphone users
Source: Exact Target
Technological
Fast paced, dynamic world
Transfer of technological resources and know-how is relatively easy
Legal
Industry governed by an array of legislation
Microsoft Alliance with Nokia SWOT Analysis
Porter's Strategy Matrix
Resource
Capability
Cost/Differentiation
“Stuck in the middle” between cost and differentiation advantage , thus are unable to develop a sustainable competitive advantage

Improved profitability or increased volumes

Where do they stand?
Resources
- human, physical and knowledge factors that provide a firm the means to perform its business processes.
Capability
- is the ability of a firm to perform its activities proficiently.
An effective link between resources and capabilities results in a firm developing competencies.
Core-competencies
Microsoft+Nokia
Resources
Capabilities
Financial resources
Physical resources
Company Brand & reputation
Culture
Technology
Human resources- knowledge & skills

Research and Development
Creativity
Innovation
Services

Microsoft Corporation’s goal is to offer its customers and partners the best possible end to end experience, and to become a satisfaction leader in the technology industry. The better Microsoft is at building a culture of accountability and trust, listening and responding to customers, simplifying product offerings and services, improving product quality and security as well as innovating based on customers feedback because they always ensure that customers and partners are being fully satisfied.

Reference List:
BusinessDictionary.com,. 'What Are Business Resources? Definition And Meaning'. N.p., 2015. Web. 19 Apr. 2015.
Microsoft.com,. 'Microsoft Citizenship Reporting | Download 2014 Citizenship Report'. N.p., 2015. Web. 19 Apr. 2015.
Scott, Jeff. 'Five Essential Capabilities Every Organization Should Have'. Accelare.com. N.p., 2015. Web. 19 Apr. 2015.
Slideshare.net,. 'Strategic Management At APPLE Inc.'. N.p., 2015. Web. 19 Apr. 2015.
ERP, CRM and eCommerce Blog » Inbound and Outbound Shipping Processes in Microsoft Dynamics AX 2012. 2015. ERP, CRM and eCommerce Blog » Inbound and Outbound Shipping Processes in Microsoft Dynamics AX 2012. [ONLINE] Available at: http://blog.ignify.com/2014/08/07/inbound-and-outbound-shipping-processes-in-microsoft-dynamics-ax-2012/. [Accessed 16 April 2015].
Microsoft Shifts to New Marketing Strategies to Boost Surface Tablet Sales : News : Headlines & Global News. 2015. Microsoft Shifts to New Marketing Strategies to Boost Surface Tablet Sales : News : Headlines & Global News. [ONLINE] Available at: http://www.hngn.com/articles/22384/20140119/microsoft-shifts-to-new-marketing-strategies-to-boost-surface-tablet-sales.htm. [Accessed 16 April 2015].
Your Boy's Blogspot: How Porter's Value Chain Model applies to Microsoft. 2015. Your Boy's Blogspot: How Porter's Value Chain Model applies to Microsoft. [ONLINE] Available at: http://rbuckland1355.blogspot.ae/2010/09/how-porters-value-chain-model-applies.html. [Accessed 16 April 2015].


Microsoft and Nokia
What would we call their partnership
?
Merger/Acquisition
Joint Venture
Strategic Alliance
Scale Alliance
Access Alliance
Collusive Alliance
Complementary Alliance
And what was the motive?
Issue:

1) Microsoft was losing market share in the OS market

2) Nokia was finding it hard to compete with Samsung and Apple due to redundant Symbian OS
Hence...
Source: Gartner, 2013
Source: Nokia, 2012
Rise of M-Commerce
Lawsuits concerning patent breaches and copyright infringements
Environmental
Pollution resulting from production of smartphones is substantial
Source: Hill, 2013
Source: Lab Brands, 2012
Internal:
Change culture to be more nimble and transparent.
Improve Marketing
External:
Innovate and Differentiate among competitors
Continue pursuing a Global Strategy
Target BRIC economies with Low-cost Smartphones
Final

Recommendations
Diversification or Market Penetration?
Thank you for listening!
Any Questions?
Full transcript