CASE STUDY From a strategic point of view look at the strate

CASE STUDY

From a strategic point of view look at the strategic objectives of NOKIA mobile company and how they respond to the 2 questions below.

1. List and evaluate three most important threats that your mobile phone company can expect or has experienced from

a. a network operator

b. an equipment manufacturer

2. List and evaluate the possible responses to each of the three threats that you have mentioned above (for both network operator and equipment manufacturer) a. For a network operator

b. For an equipment manufacturer

3. Use Porter’s Five Forces Model to evaluate your chosen mobile phone company’s current strategic position. Using your Five Forces assessment, make recommendations that would help target the development of IT systems onto the essential strategic areas within the organization.

Solution

Answer:

The threats are The threat of entry,the power of buyers,the power of suppliers,the threat of substitutes and Competitive rivalry.

Five Forces Analysis can provide valuable information for three aspects of corporate planning:

Statistical Analysis:
The Porter’s Five Forces Analysis allows determining the attractiveness of an industry. It provides insights on profitability. Thus, it supports decisions about entry to or exit from and industry or a market segment. Moreover, the model can be used to compare the impact of competitive forces on the own organization with their impact on competitors. Competitors may have different options to react to changes in competitive forces from their different resources and competence’s. This may influence the structure of the whole industry.

Dynamical Analysis:
In combination with a PESTLE Analysis, which reveals drivers for change in an industry, Porter’s Five Forces Analysis can reveal insights about the potential future attractiveness of the industry. Expected Political, Economical, Socio-demo-graphical, Technological, Legal and Environmental changes can influence the five competitive forces and thus have impact on industry structures.
Useful tools to determine potential changes of competitive forces are scenarios.

Analysis of Options:
With the knowledge about intensity and power of competitive forces, organizations can develop options to influence them in a way that improves their own competitive position. The result could be a new strategic direction, e.g. a new positioning, differentiation for competitive products of strategic partnerships (see section 4).

Porter’s model of Five Competitive Forces allows a structured and systematic analysis of market structure and competitive situation. The model can be applied to particular companies, market segments, industries or regions. Therefore, it is necessary to determine the scope of the market to be analysed in a first step. Following, all relevant forces for this market are identified and analysed Hence, it is not necessary to analyzer all elements of all competitive forces with the same depth.

The Porter’s Five Forces Model is based on microeconomics. It takes into account supply and demand, complementary products and substitutes, the relationship between volume of production and cost of production, and market structures like monopoly, oligopoly or perfect competition.