Unit 3: VERTU: Nokia’s Luxury Mobile Phone for the Urban Rich
Case Study Analysis
Kaplan University
School of Business
MT460: Management Policy and Strategy
Author: Jason Thompson
Professor: Dr. Tracy Bagley
Date: February 16, 2013

Introduction Fineland headquartered Nokia manufactures global telecommunications equipment. Vertu is the product at hand. This is a luxury mobile device that is targeted towards the rich. There are many aspects of the phone that allow it to do so. Such as; stainless steel, diamonds, gold, ceramic, sapphires, and even stitched leather. The company has shown impressive sales growth in a market that is actually growing, with companies such as APPLE and Android. The question is, at their current stance can they survive?
Synopsis of the Situation Dr. Ken Kwong-Kay Wong (2011, Pg. 1) states “On February 11, 2011, Stephen Elop, the new CEO who had been at the helm of Nokia for only five months, announced a new mobile strategy to adopt Microsoft’s new but unproven Windows Phone as its primary smartphone operating system”. The market didn’t care for this too much. This was a system that had not been proven to be worthy yet. The share price for stock took a 14 cents per share dive.
Key Issues Although, Nokia was doing good, this market was getting smaller. There were some company issues as stated by Dr. Ken Kwong-Kay Wong (2011, Pg. 1) “Elop cited a lack of accountability, leadership and internal collaboration as key reasons for Nokia’s inability to deliver products in a timely manner”. Stephen Elop was brought in to create a better company and product. Unfortunately, the company’s current systems were Symbian. Elop chose the new technology of window’s based phones, that had not been fully presented to the market yet.
Define the Problem There are a couple problems here. One is that Nokia has been using a symbian system operating software that is way outdated. This is compared to new phone developed by Apple and Android for instance. Secondly, the company’s price per share is dropping due to a presentation of new operating systems. By taking on this new operating system, if there are issues, they could lose even more per share prices.
Alternative Solutions Dr. Ken Kwong-Kay Wong (2011, Pg. 3) stated “The strategic assessment was completed when Elop made his announcement on February 11, 2011: Nokia would gradually phase out Symbian to adopt Microsoft’s Windows Phone as its principal smartphone strategy”. By doing this Elop is trying to create a better income for the company, by replacing its outdated services. At this rate they will not be able to keep up with the new technologies coming out. Partnering with Microsoft was Elop’s way of trying to better the product and service for the customer.
Selected Solution to the Problem Nokia is operating in a market that is ever changing. Apple and Android are dominating with their services. Nokia partnering with Microsoft to create the line of luxury mobile phones for the rich is a great thing. Microsoft has been around for ages, and so has Nokia so between these two companies they can create an incredible product. This product does cater to one specific area of the market, but that is the intention to begin with.
Implementation
Dr. Ken Kwong-Kay Wong (2011, Pg. 8) recites Frank Nuovo “Puposefully, my influence was to steer the design and brand elements as far from Nokia as possible when it made sense to do so”. This shows the weakness they had. Although, Elop took the same route, but used a different method. Elop took a road to move the product into a different era, by using the Microsoft Windows Phone technology. I still moved Vertu into its own self reliant aspect.
Recommendations
Nokia should go along with the implementation of the Windows Phone technology. This will allow them to keep up with the times. Apple and Android can dominate on the general customer basis, but Vertu via Nokia can dominate in the luxury phone market. There are always rich people that will pay massive money for an item that is limited. Luxury phones are very limited as many people can’t afford them.
Conclusion
Vertu , truly has a chance with Microsoft’s Windows Phone technology. They can continue to incorporate this technology, and even limit where they offer this exclusive phone. By advertising the phone in high end stores, such as jewelry, women’s and men’s stores that cater to the urban rich, then they will continue to see a growth. However, as this technology increases they need to remember that they will rely on Microsoft to keep up with those times also.

References:
Kwong-Kay Wong, Dr., K. (Sep 28, 2011). Vertu: Nokia’s Luxury Mobile Phone for the Urban Rich. (Report No. W11208). Watertown, MA: Harvard Business Publishing.

criteria examples Advantages of proposition? Capabilities? Competitive advantages? USP's (unique selling points)? Resources, Assets, People? Experience, knowledge, data? Financial reserves, likely returns? Marketing - reach, distribution, awareness? Innovative aspects? Location and geographical? Price, value, quality? Accreditations, qualifications, certifications? Processes, systems, IT, communications? Cultural, attitudinal, behavioural? Management cover, succession?Philosophy and values? | StrengthsMicrosoft Windows for Phone Tech.Premium MaterialsMultiple Product ChoicesHigh Pricing Catering to the CostOf the Product to Cover ManufacturingCost | WeaknessesPricing, limited to one marketSome systems not user friendly or Up to dateLimitations to one specific marketApps outdatedHigh priced materialsLimited market | criteria examples Disadvantages of proposition? Gaps in capabilities? Lack of competitive strength? Reputation, presence and reach? Financials? Own known vulnerabilities? Timescales, deadlines and pressures? Cashflow, start-up cash-drain? Continuity, supply chain robustness? Effects on core activities, distraction? Reliability of data, plan predictability? Morale, commitment, leadership? Accreditations, etc? Processes and systems, etc? Management cover, succession? | criteria examples Market developments? Competitors' vulnerabilities? Industry or lifestyle trends? Technology development and innovation? Global influences? New markets, vertical, horizontal? Niche target markets? Geographical, export, import? New USP's? Tactics: eg, surprise, major contracts? Business and product development? Information and research? Partnerships, agencies, distribution? Volumes, production, economies? Seasonal, weather, fashion influences? | OpportunitiesExpanding to more marketsChoosing to cater to more than oneMarketBrand promotion in more areasFind ways to bring this product to newAreasCreate similar products for lower income markets | ThreatsNewer technologies out thereMore competitionBetter software, more reliableCompetitor prices on similar productsApple and Android competition | criteria examples Political effects? Legislative effects? Environmental effects? IT developments? Competitor intentions - various? Market demand? New technologies, services, ideas? Vital contracts and partners? Sustaining internal capabilities? Obstacles faced? Insurmountable weaknesses? Loss of key staff? Sustainable financial backing? Economy - home, abroad? Seasonality, weather effects? |