1. Do a SWOT analysis of the Nokia-Microsoft alliance in the global mobile phone industry.

Strengths: There are many evident strengths associated with the Nokia-Microsoft alliance. Primarily, the alliance will create synergy between the firms. “In the global economy, a well-developed ability to create and sustain fruitful collaborations gives companies a significant competitive leg up” (Kanter, 1994). The alliance allows both companies to increase their presence in the global smartphone industry, capitalizing on each other’s strengths. Nokia will take advantage of the Microsoft’s cash infusion as well as their software, while Microsoft will capitalize on Nokia’s stable networks and established operations and clientele (Deresky, 2014).

Weaknesses: Nokia and Microsoft also have weaknesses, as both firms are fighting declining market share. While Apple and Google bolster their market share, they are consequently increasing the lure for top-developers to come on board. Contrarily, Microsoft and Nokia’s lackluster market share has the opposite effect. A recent LinkedIn study reports Apple and Google to be the first and fourth most attractive global companies to employees, while Microsoft is sixth, and Nokia is not listed (Burgess, 2016).

Opportunities: Opportunities are abundant with the subject alliance, specifically as it will allow Microsoft to increase their software’s presence with smart phones, having a positive impact on their bottom line. This deal provides Nokia with the ability to develop a smartphone capable of competing with the Apple and Google, also resulting in the opportunity to increase their presence in the smart phone industry and ultimately, their bottom line.

Threats: The main threat to both Microsoft and Nokia is their competition. As previously mentioned, both firms are experiencing declining market share in the smart phone industry, which compounds negative impacts. Competitors are increasing their market share, increasing the talent lure, and constantly improving on their technology. It is tough for firms lagging behind the big firms to catch up at this point. Nonetheless, the alliance is valiant effort to challenge the threats. “Microsoft’s acquisition of Nokia’s troubled smartphone business represents a daring $7.2 billion attempt by the software giant and a once-influential cellphone maker to catch up with the mobile computing revolution that threatens to leave them in the technological dust” (Liedtke, et al., 2013).

2. Compare and contrast Nokia and Microsoft regarding their global operations and competitive advantages.

Compare: Both Microsoft and Nokia have strong global brand names, large customer bases, and both have high quality products. Both firms operate in the Americas, Europe and Asia.

Contrast: While both firms operate in the same locales, Microsoft has a larger presence in the Americas and Nokia has a larger presence in Europe. The firms differ in their areas of expertise, as Nokia specialized in mobile tech and Microsoft specializes in Server Message Blocks (SMB’s) and enterprises.

3. Within today’s changing global software and mobile phone industries, evaluate and assess Nokia’s and Microsoft’s product lines and market shares.

In addition to Nokia’s mobile phones, they offer mobile devices and solutions for imaging, games, multimedia, mobile network operators and business (Deole, 2011). The bulk of their products include their Lumia and Asha lines. Microsofts product lines includes Microsft Kin and Surface smartphones. Microsoft also has tablets, and software including windows, outlook, and skype.

As previously mentioned, both firms are experiencing declining market share within the ever-changing software and mobile phone industries. Smartphones sales have grown in 2016, but Microsoft’s market share has not. Microsoft’s market share in the global smartphone industry has dipped below 1% to .7% for the first time. Nokia has been absent from the market and experts predict difficult times ahead for the company.

Nokia’s announced return to the smartphone and tablet markets will not be an easy mission,” said Mr. Gupta. “In today’s market it takes much more than a well-known brand to sell devices. Making good hardware won’t be an issue for Nokia, but users need a compelling reason to remain loyal to the same brand. Furthermore, that the smartphone market is slowing down makes it difficult for mobile phone vendors to reach previous levels of growth (Gupta, 2016).

4. What did you learn from the Nokia-Microsoft case when applying the main theories and topics from this chapter?

I have learned that both Microsoft and Nokia have formed an alliance in hopes of improving upon the value and sustainability of each firm in the global smartphone industry. “Alliance partners can provide synergies and value to corporate performance by providing access to new resources and markets, generating economies of scale and scope, reducing costs, sharing risks, and enhancing flexibility” (Deresky, 2014, p. 223). The companies have entered into an alliance in what seems like a good match, as they have compatible strategic goals, and complementary skills and products (Deresky, 2014). After learning more about the firms I feel it is close to being too late for Microsoft and Nokia to get back into competitive form in the smartphone industry, and they may want to pursue more innovative endeavors instead of chasing the pack.