Adaptive strategies
Adaptive strategies is a term used to describe the changes that individuals, communities and households undergo in terms of rules and institutions in the long run in regards to productivity due to changes in the economy and the local environment. These changes aim at responding to the shocks and stresses that come with economic changes forcing them to respond differently in an effort to meet the changing demands of their livelihood. The adaptive strategies are a mix of locally induced and modified factors and innovation. These factors bring about changes that alter the normal way of doing things in the local scene. There is a need to maintain a balance between the needs of human beings and the environment they live in hence they come into a balance in the form of adaptive strategies. The conception of the adaptive strategies does not only come from human beings, but nature also plays a vital role in shaping them. This is better explained in terms of the dynamic nature of the ecosystems that man has depended on for so long (Haig, 2011).
Burgelman's model
The evolutionary lens of research is best explained if one uses the three frameworks to point out the major concepts used in the framework. There are three frameworks present in this case that makes up the Burgelman's model. The three tools help put theory and practice into perspective. They provide specific aspects that make it easier to link the theoretical aspects of strategy making and the practice used by management (Burgelman, 2002, p. 5). It divides them into three categories namely the evolutionary practice organizational theory, conceptual framework and the strategy making practice by organizations.
Tool one represents the dynamic forces in the organizational evolution. Competition is present and helps shape the organization. It is necessary for an organization to have a competitive advantage over their competitors. However, the competition is not the only thing to be weary about as there are other forces in the environment that determine the company’s competitive advantage in the industry. These include customers, suppliers and new entrants. A company has to work on various strategies to have distinct competencies over their competitors. These are things like differentiated skills, presence of complementary assets and routines that the company uses to build its competition. All these are the instinctive attribute of an organization that are difficult to change over time. They drive the company’s strategy. The other aspect of this is the official corporate strategy used by top managements to determine the company’s future. It concerns itself with the core values of the company. This is closely linked to the company’s strategic action that guides it on the way forward. The selection of the internal environment helps the company determine and align internal dynamics that shape the company (Burgelman, 2002, p. 9).
The second tool is the strategy making process that is focused on the company level analysis. This is concerned with various activities like selection, variation retention of ideologies and competition. The induced strategic combined with the autonomous action goes hand in hand with the variation aspect. The selection aspect of this tool goes with the structural and strategic issues. Retention corresponds with the corporate strategy used by an organization, (Burgelman, 2002, p. 12). The internal struggles of the business coped with challenges in getting resources fit in with the competition. This is mostly about how the top management manipulates their strategic actions on different levels. It is common to find management having control over its core strategies. It is common to find managers who identify the need to change strategy as the company expands. This is possible with the induced strategy process where the company exerts control over the familiar processes n their external environment. Autonomous strategic actions help the organization come into focus in terms of new initiative so that go a long way in changing their practices. It is done by a few people who are outside the corporate strategy scope. By combining the two strategies organization are in a better position to understand their markets and the dynamics present.
Tool three is about the internal corporate venturing by organization through strategic leadership actions. It provides an insight on how different teams in the organization play different roles. The three levels of management namely the venture team, the senior management and the corporate management have different role to play in this case. This tool aims at linking the various management aspects together to create a good flow within the organization. There are different forces that affect the model and they include the structural context of the business. The definition part lasso has a key role in shaping how the businesses strategize. This represents the bottom up forces common in the definition of a new business entry (Burgelman, 2002 p. 13). All the tools explained above play different roles in the organization and shape the way strategic decisions and made and run.
The case of Nokia India
Many companies in the world rely on marketing and the best strategies to keep their current market and even get into new markets. The mobile world phone markets are proving to be a tough competition arenas where major players fight for control over huge markets. This is the case with Nokia in India. India is ranked as the world’s largest market in consumption of mobile phones followed by the United States of America and China. India has the largest and fastest growing market and this has since attracted some of the major telecom giants in the world. The Indian government opened up the telecom market to different private enterprises in 1994. Nokia was one of the giants who rushed to India in search of the new markets. Nokia originates from Finland and it saw a major opportunity in rushing to the country with many people and a wide market to build as its base. Today, Nokia has a market share of 58 percent over its major rivals. This is the percentage of mobile phones, but it has a higher stake in the global systems for mobile phones with over 70 percent share. GSM is the world’s largest and most popular form of communication through the mobile (Burgelman, 2002, 8). These figures show that Nokia has a high stake in the Indian market and has proved over time that it is keen on keeping this trend. It is therefore, worth exploring how the company came to have such a high stake of the mobile market and how it overcame other giants like Samsung and Erickson in this country. The company did this by focusing on a good strategy that ensured they were on the forefront.First, the company made sure that it entered the market at the right time, built on crucial partnership to ensure they have good distribution partners, early investments in manufacturing and development of innovative features. The company also focuses on building its brand and ensures it keeps on experimenting with new things using the readily available market. The strategies used by Nokia India over time have gone a long way in making the company successful.
Sharp focus
The entry of mobile giants into the Indian market during 1994 and the years that followed were crucial for the development and establishment of a good market base. With focus, any company would have made a successful entry to the Indian market. This would guarantee any company control over the market and gave the power over its customers. This is in accordance with the Burgelman's model whereby tool open process that the management should identify their market environment and build on their competencies.The company management knew that the entry into the Indian market was a worldwide venture. According to theBurgelman's model it I upon the top management to use the official corporate strategy to settle in businesses. The company identified the five core domains namely its competition, competencies and core values help them settle into the new market (Burgelman, 2002, 13).
It identified the need to maintain a sharp focus that served as their core competitive advantage over the other companies. The other companies did not focus on one business, they had diverse interests that made them miss the key feature at the time that was gaining focus and having one thing that could guarantee a huge market base. The mobile landscape during the early 1990s was not set for any major company; it was open for anyone who the mind and focus to gain control over the market. Most of the other companies interested in the market had diverse business ideas and had to share their focus among varied interests. Some divided their attention between handsets, home appliances and other electronics. This destroyed their focus making them lose the chance of having control over the mobile market. However, Nokia had the handset business in mind and they went into India with the sole reason of creating a market for handsets. The mobile infrastructure business was joined with the Nokia mobile phone business. However, this changed in 2007 when each became an independent venture leaving Nokia India as more focused than ever. The focus allows the company to look out major and minor details of the business hence they have more information about the market and the demands of the business. It is clear in this case, that the top management applies the autonomous and the induced strategy to understand the market. They made a run for the growth and technological advancement as they knew that it would suit their market environment (Mohanty, 2010, p. 3).
Business is about taking a risk. However, having a sense of perfect timing is the key to succeeding. This is the case with Nokia India. According to the model it is vital for the top management in any organization to have internal selectionenvironment where they understand their alignment to the dynamics n their environment.The company knows when to go in and make an investment. They know the importance of being ahead of the curve. It gives one a boost in terms of market control. Nokia made sure they invested in the Indian Market before others had the chance to explore and determine what they wanted to do in the newly opened market. Their investments did not only focus on branding, it knew the importance of having people to trust their brands and ensure distribution was effective. Their investments also focused on the vertical aspects of the business namely manufacturing, delivery and design R&D. They made sure that there was a balance in the three components that would foresee the success of the new venture. Nokia made an investment of over $1 billion as they went into the market and the company is willing to put in more funds if ever there is a need to increase its investment in India.
The Distribution Edge
The corporate management has a duty according to the model to safeguard and negotiate deals in distribution. The model also provides that it is necessary for organizations to initiate ways of making ahead in businesses. For Nokia India, this proves to be an area they have mastered well.95,000 outlets are present in India and it is interesting to note that Nokia India has over 50, 000 outlets that sell their brand only. It is common to find outlets that specialize in the sale of Nokia brands. This shows that the company has a good distribution strategy that ensures its commodities reach the customers wherever they are. This also increases their power over competitors considering the number of phones available from their competitors (Mohanty, 2010, p. 8).
Demand is the key feature shaping up the division of the market by the companies. They both identify that one company has particular strengths that the other one lacks. In urban areas, people are going for sophisticated phones that have more features. People want phones like the Nokia’s E-series and the N-series that help people do businesses. This is different from the rural areas where people want phones for the sole purpose of communicating with others and no additional task. As such, the demand curve determines what the company does in terms of distribution and what needs to be availed in which parts.
Affordability also plays a key role in shaping the decisions made by distributors. In rural areas, people are not as well off as those living in rural areas; therefore, this difference has a key role in deciding what types of phones are needed in what parts of the country.
The prices of things also determine the outlets willing to open up a branch. It is common to see cheap phones being sold in many places even in grocery shops. Many retail outlets want to try out selling phones and airtime. People who specialized in consumer goods are shifting their interests to selling mobile phones. As such, there is a need for specialization in how the distribution of phones is done. According to Dutt, people are now identifying the need to have a separate shop to sell mobile phones. There is a need to have an engagement with the customer making him or her feel that they will get the best from the outlet. The approach people use in different businesses to determine its outcome and it is a good strategic approach to have customer satisfaction as the key driving point in any business (Burgelman, 2002, 3). As per the definition of Adaptive Strategies, the expectations of people keep shifting as per the demands of life. People in urban areas are shifting from their previous demands to new ones and it is only fair that they get what they want. Dutt also points out that there is a need to give the customers a feel of competency and skill in the delivery of phones and services in different outlets. To ensure they do this, Nokia India decided to start up Concept Stores in different cities around India to offer services to clients on a personalized level. The customers have high expectations when they go in search of a Nokia Brand. This is something that has been with them for a long time and if they fail to see this, they lose trust on the business. Therefore, this is a move to make sure that the customers get what they expect as they walk into a dealership shop. It is all about giving the customers a taste of what they want (Garg, 2010 p. 54).
Investment in Manufacturing
According to the Bulgerman model it is necessary for a firm to focus on the Autonomous Strategic Action whereby individuals come up with innovative ways to undertake . The company needed to have the assurance that it could survive in the changing market. According to tool two of the models, autonomous strategies can threaten the survival of the company and it is necessary to have an alternative (3). In this case Nokia identified the need to have their labs at a close location to help them diversify and outdo the competition.As stated earlier, Nokia is not closed to invest and can go to any level to make sure they have the best of everything in the market. One such area is their investment in the manufacturing facilities. Nokia India has several labs set up in different parts of India. The labs serve as a testing facility where they develop phones depending on the demand of the local population. There are various firms around India that specializes in manufacturing handsets that are locally consumed or exported to other countries outside India. Such a facility is the R&D firm that manufactures handsets. Back in 2005, Nokia India sets up another firm that specializes in the manufacture of handsets in Chennai. This was $150 million handset manufacturing firms, (Jeffs, 2008 p. 36). The firm produced over 25 million handsets and 30 percent of the handsets were sold to neighboring nations. This is also another case where Nokia is way ahead of its competitors like Motorola and Samsung who have plans of setting up their own manufacturing plants. This gives Nokia a good head start and by the time, its competitors have a feel of the market and how to go about the manufacturing process, Nokia India would be well established and seeking other strategies to strengthen their market. There is also the case of focus in the case of Samsung. Though it has made it clear through its Deputy Managing director that it plans to open up its own Chennai facility, they have plans of manufacturing a range of products. This is not the case with Nokia India as they are proving to have a preference of one thing at a time, which has proved to be fruitful in its previous ventures.
There is a need for a company to change with the dyamics in the environment as seen in Though this seems to be very profitable now, it puts the company at a high risk. If anything were to happen and there be a shift from mobile phones then Nokia would suffer greatly. This is evident in how they have concentrated on one thing and do not have other alternatives (Burgelman, 2002, 5). This is not the case with Samsung who are focusing on flexibility in case of a slump in the mobile phone business. Samsung has varied interests in electronics and this gives it a chance to switch to something different in case one venture slumps and leaves them with other activities to engage in. Nokia’s parent company focuses on Mobile phones and this is what Nokia India mirrors. It has taken into the business and works on making sure it remains on top without considering its fate in case the phone business comes to an end. Traditionally, Nokia had varied interests, as it was a whole range of business activities from papers to electronics. However, in the early 1990s, the CEO decided to focus on phones and sold off anything else not related to mobile phones.
Building the Brand
The bulgerman model provides that it is necessary for firms to identify their competencies by The company had to work on developing a brand name for itself in the new market as is common for any company. However, there are many challenges to be dealt with when one is faced with an ever-changing population. The ranges of Nokia available in the Indian market range from the lowest Rs 1,499 ($37) and the highest one in the market is Rs 45,000 ($1,125). As the marketing theory claim, no brand can be everything all the people want. Some people have to be left out when it comes to branding, as it can never satisfy everyone. The problem comes to the lifespan of the mobile phones. It is common to have a maximum lifespan of 24 months before a new model is in the market. This would mean that every year; the company spends money on branding. If the company had focused on branding different models each year, then they would have spent millions only to watch it go down the drain after 24 months. The company decided on a different strategy where they went for branding of the service and not the product. Instead, they selected promotion of other features like music. This ensures that the brand remains the same even as a new brand goes to the market. The changes in the brand can be minor due to some necessary extensions. As the consumers get different models of Nokia, products they have an assurance of the brand through something they find as a commonality in all the Nokia products. The brand used by Nokia covers all the aspects of a brand namely rationality, emotional view, aspiration, physical attributes and spiritual connection. These are the five needs of an Indian customer that attracts him to a product as he feels that it is designed to serve and suit his needs (Sadler, 2003 p. 73)
Nokia India is a self organizingsystem that knows how use information reduce their future expenditures. According to the model The Indian consumer has a variety of needs and the needs have to be met with various levels for a consumer to feel the satisfaction he expects. All these have been addressed in the brands used by Nokia. The Rational need that comes up due to the need for quality versus the prices comes in though the different segments of prices on each item. The emotional aspect of the needs is addressed by the fact that the phones give one the joy to have dear ones a dial away. This keeps people connected and makes them feel secure of the presence of their relatives and friends all the time. The other need addressed by Nokia is the aspiration need that is dealt with in the new model that has key feature. The new model had various features and its model was good making people wild with the desire to own it. The physical aspect of the need is seen through the size and the comfort one derives from owning the brand. The most important aspect of the brand is in how it has ensured that the spirituality of Indians is part of the brand. The Nokia brand has local language and people with the use of SMSs.
Critique of the strategy
Products for India
Nokia India is a self organizingsystem t knows how use information reduce their future. According to the model it is necessary to maintain stability I the market. This requires an indepth analysis of how different dynamics in the market work. For nokia India, this meant that they had to identify the strengths in the new market as well as its challenges. It took into account the five contents of competitive advantage management into consideration. The model provides that identifying the basis of competitive advantage The Indian market is a unique place whereby anyone interested in having a successful venture has to consider various issues. Nokia took this seriously and strove to make sure they had the interest of the people of India in their minds as they set about making phones fit for them. In the first tool of the Bulgerman model, it is critical for organizations to identify their competence that will allow them to have a competitive advantage over their competitors (Burgelman, 2002, p. 14). There are five ways of doing this and nokia identified that they could use the unique environment in India to their advantage. The management identified that the customers could give them an advantage over its competitors.The different models used by the Indian people work well for them and suits their livelihoods. The handsets prove to be unique to India and it serves the need of the people of India.
The flashlight is a good example of how Nokia India took into account the needs of the poor people living in the rural areas. This is a key feature in the strategic plans of Nokia India. Through the induced market action, the company was able to increase their penetration into the market. It is in their ability to fit into the shoes of the local communities and come up with brands that will serve their needs. For someone living in the united States of America or somewhere in Europe (Mohanty, 2010, p. 6). It is about understanding their customers. They do not see the need nor find the use of a flashlight incorporated in a phone. However, for someone living in some rural areas with no electricity, then this ideal device kills many birds with one stone. Even for those in cities, it is common to have power cuts and the torches embedded in the phones come in handy.
The dynamics in the environment forced the company to look for ways to cope with the changes. They did did by re-examining their priorities. The Nokia 1100 was the first phone with a flashlight and it was a getaway success for Nokia India. It served the sole purpose it was meant for that is making life easy for those who needed a cheap brand that would fit into their daily routines and make life easier for them. The alarm clock and radio also go a long way in making the devices fit into the Indian community and fulfills its definition of a communication device. The directors know that through innovation they will be in a good position to keep their market as they like something new that will fit perfectly to their lives.
It is critical to maintain a competitive advantage and keep identifying ways to fit into the dynamics with his autonomous strategies from the external environment. The model provides that there is a necessity to look for ways to merge the dynamics and the internal processes. This means that he top management had to come up with other ways of curbing competition. They came up with the new phone where users can share the phone duped “shared” phone. This is a phone where different people can use the same phone. This may seem like an absurd idea to people who do not know of the extreme conditions some people live in. it is weird for someone who has spent his or her life in a place where some things seems to come naturally. However, for some people in India, this is not the case, some cannot afford to have a phone and the idea behind the “shared” phone is to increase affordability. This is underway in the Nokia’s three India R&D labs where around 700 people are working on the new device. This device will have different billings for different individuals, phonebooks and other features that will work separately for different people. Up to three can use the phones or more people who will share the cost of purchasing and maintaining the phone (Burgelman, 2002, p. 8).
The call rates also determine the affordability rates of mobile phones and determine the number of people owning the phones. For other people owning a cell phone is a form of luxury because of the high expenses incurred while using it. However, this is different for Indians who are lucky to have the cheapest calling rates in the world. The country has over 170 million subscribers and the market is prone to further expansion over the coming years. In the previous years, the consumption of phones has been on the penetration level where people were exploring the uses of mobile phones. However, this is changing as people are now in the replacement-led mode where they want better phones and are even willing to pay more money for the device. This is made better by the fact that Indians love changing their phones more than people do from other parts of the world. As such improving the features of the phone to suit the changing needs of the people is the priority of the Nokia India. There is a need to ensure that in the future people have everything they need on the click of a phone. The market is dynamic and so are the needs of people. The mobile phone produces a good opportunity where people get the chance to do everything without having to be physically present (Mohanty, 2010, p. 3).
In the recent years, the strategies are evolving and people are now paying money through their phones. People can manage their accounts through their mobile phones and this fits into thoserural areas who are not in a position to go to town every other day to deposit or withdraw money. This is the feature call easy pay and easy send are the two services that allow for exchange of money through the money service products.
The company has incorporated various abs to help consumers navigate through their products. Their desire to provide consumers with the best of everything had given them the forefront in the manufacturing industry. Many people in India trust the Nokia India brand to deliver something that Suits them and their situations well (Agar, 2013 p. 59).
Many companies have different marketing strategies and how they apply to make radical changes over the years. According to the bulgerman model, the variations in an organization take time to make radical changes.. For Nokia, they knew that perfect timing was the key to a successful business in a new market. By having control over the market and getting a head start, they had the assurance of a good market share. It has been their desire to remain in the lead in the Indian Phone Market. Having a head start also gave them the chance to be innovative, as they tries to make sure their competitors did not overtake them. Other telecom giants also rushed to the Indian market once it was opened, but their different levels of focus determined the company that would have the largest market share. Despite the control over the market and the demands, Nokia faces numerous challenges as it tries to outdo its competitors. The other companies are working hard to increase their market share, and as they do this, they keep challenging Nokia India to come up with better strategies to safeguard their interests (Aiyub&Mohre, 2010 p. 30).
Nokia has been able to deliver to the local community and has always kept the interests of the natives at heart. The changes seem as people demand for more services from them has proved that the economic demand is dynamic. People have needs that do not remain constant, but keep changing over time. As this happens, it is upon businesses to keep up with the changer to ensure they continue surviving. Those who do not fit positively to the change end up being left out. Nokia India has proven that innovation is the key to remaining in business. Over the years, it has proved that it has the ability think out of the box and come up with brands that fit perfectly to the lives of the local community (Burgelman, 2002 p. 12). The need to put the customer first and have their desires fulfilled as they expected is what makes it outstanding. The company has managed to do this by maintaining a high level of focus and eliminating anything that can act as a threat to their dominance over the market. It came up with various features that sought to seek out the people living in rural areas and at the same time look out for those in cities. The company identifies the uniqueness of the Indian Market and has since capitalized on this feature. By so doing, they have gained the trust and confidence of the local market that seem to have a huge preference of the Nokia brands over others. This ensures that both parties get their fair share of the deal as they go about their daily lives (Syrett & Devine, 2012 p. 47).
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