Question

Companies must consider their external stakeholders to remain competitive. Discuss one company whose strategy failed because management did not consider the actions of external players. Explain the failure and what the company could have done differently.

Answer 1

Overview:

Yes, it is absolutely necessary that the companies must consider their external stakeholders to sustain the competitive market as considering them will give a clear idea about the market process. Accordingly, several analyses can be done to make innovative strategies for upscaling the business process and gradually market trend to bring the growth in the company can be excelled. Through such process, failure can be overcome and the sustainability factor to lead the business can be gained.

1st part:

The company name is “NOKIA”, it is already known that NOKIA is the leading mobile manufacturing company and throughout several years it has ruled out in the market. For its high quality and longevity, it has achieved commendable customer retention factor.

    But, the competitors of NOKIA always have tried to follow the trend of the market by adopting latest technologies and cheaper price rates mobiles with huge number of facilities. “NOKIA” has not measured the demands and needs of stakeholders correctly. The customers have shown a keen interest in those products and gradually the selling of the NOKIA phones has dropped badly.

The management has not given any priority to check the price of the products sold by other competitors and also not considered the external players. It has made the company completely unaware of the actions of external stakeholders.

2nd part:

Since the high price range remains constant, the audiences checked for something better in comparison to the lower price range with ample facilities. This has made a lot of business downfall of NOKIA and further lead to failure in sustaining the business in the market.

       The company could have considered external stakeholders and must be taken feedback from them. This could have benefited the company in determining the strategic decision properly. Pricing strategy is the main factor to attract audiences. The majority of customers always want that product should be of minimum affordable range with more number of specifications. But, NOKIA has kept the mindset to manufacture high range products with minimum facilities and management did not consider the external players. If the company has considered external stakeholders then the strategy as per the market demands can be easily driven that could have stopped the company to face such failure in the business market.