Page 94 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes Baldauf to do something ‘completely different’. Hence, as Nokia faced up to the new
challenges, it decided that a new organisation structure and a new management team
would be needed. Ollila commented: “You don’t make generational changes easily. . . It’s
a big change. But change allows you to reposition, to rethink.” Nokia’s profitability had
stabilised in the short term but the company needed to think carefully about new
technologies, new trends and new strategic choices.
It was announced that Nokia’s widely admired Chief Executive, Jorma Ollila, would be
leaving this position in May 2006 but would remain non-executive Chairman. The Nokia
Management team that guided the company to world leadership in mobile phones would
largely have left the company.
Questions
1. Why did Nokia select only one area for development? What risk would it involve?

2. What problems did Nokia face in 2004?
3. What was the significance of the introduction of the new GSM system for Nokia’s
chosen strategy?

4. How important was the management team to strategic choice? Did it really have to
change in 2004?

5.3 Summary

The internal environment of an organisation contains the internal resources and possesses
internal capabilities and core competencies.
SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture.

5.4 Keywords

Opportunities: A time or place favorable for executing a policy/strategy.
Resource: an asset, skill, process or knowledge controlled by an organisation.

SWOT Analysis: Strengths, Weakness, Opportunities and Threat Analysis.
Threat: A major unfavourable situation in a firm's environment.

5.5 Self Assessment

Fill in the blanks:
1. SWOT stands for ....................., ....................., ..................... and .....................
2. An ..................... is a major favourable situation in a firm's environment.

3. ..................... is something a company possesses or is good at doing.
4. SWOT Analysis provides the "raw material" for analyzing ..................... and .....................
conditions of a firm.

5. ..................... portrays the essence of strategy formulation.
6. SWOT's focus on the external environment is too .....................

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