Page 90 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes 5. Hill and Westbrook criticize SWOT analysis by saying that it is not a panacea. According
to them, some of the criticisms against SWOT analysis are:
(a) It generates lengthy lists

(b) It uses no weights to reflect priorities
(c) It uses ambiguous words and phrases
(d) The same factor can be placed in two categories (e.g. an opportunity may also be a
threat).
(e) There is no obligation to verify opinions with data or analysis.
(f) It is only a simple level of analysis. There is no logical link to strategy implementation.
(g) SWOT helps only as a starting point. By itself, SWOT analysis rarely helps a firm
develop competitive advantage that it can sustain over time.
In spite of the above criticism and its limitations, SWOT analysis is still a popular analytical tool
used by most organisations. It is definitely a useful aid in generating alternative strategies,
through what is called TOWS matrix.

Task Conduct a SWOT analysis of Vodafone and Airtel.

Case Study Nokia’s Global Opportunities

ver the last 15 years, the Finnish company Nokia has built global leadership of
the mobile telephone market. After dramatic growth in recent years, Nokia has
Ofaced problems in making the best strategic choice for continued growth. This
case explores its strategic decision making and the risks that it now faces.
Background
In the late 1980s, the small Finnish company Nokia was involved in a wide range of
businesses. For example, it made televisions and other consumer electronics in which it
claimed to be ‘third in Europe’. It also had a thriving business in industrial cables and
machinery and manufactured a wide range of other goods from forestry logging equipment
to tyres. It had been expanding fast since the 1960s and was beginning to struggle under
the vast range of goods that it sold. Sadly, group’s chief executive at that time, Kari
Kairamo, was overwhelmed that he committed suicide. It is rare that strategic pressures
are so intense but the impact on managers of strategy evaluation and development is an
important factor in generating stress.

The Early 1990s
In 1991 and 1992, Nokia lost US$120 millions on its major business activities. The company
had to find new strategies to remedy this situation. It had already cut out some of its
activities but was still left with a telephone manufacturing operation, an unprofitable TV
and video manufacturing business and a strong industrial cables business. Nokia began
the process by seeking a new group chief executive. Its choice was Jorma Ollila, who had
previously run the small Nokia mobile phone division, which was loss-making at the
Contd...

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