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Finland and Nokia

CASE ANALYSIS

Group Members

y Abaid Ullah y Ammara Atta y Anam Farooq y Fahad Butt y Hassan Zulqarnain

Case: Finland & Nokia

Presentation Plan
y Case Summary y Issues & Problems y Case Analysis 
Finland  Nokia

Anam Farooq Anam Farooq Ammara Atta Fahad Butt Fahad Butt Hassan Zulqarnain Abaid Ullah

y Nokia at Corporate level y Nokia at Global level y Finland & Nokia 2001-2010

Case: Finland & Nokia

Case Summary
y In the 1980s, a process started of moving out of an

investment-driven economy into an innovationdriven one. y With the collapse of the Soviet Union around 1990, Finland reached a crisis. y Finland became the member of the European Union with fiscal stability. y Finnish constitution had the semi-presidential form of government that plays a significant role in forming the good foreign relations.
Case: Finland & Nokia Anam

y Finnish government plays an important role in the leading companies of the Finland industry. y Nokia accounting for some 70% to 80% of the cluster exports and the world leader in mobile phones. Case: Finland & Nokia Anam . R&D expenditures and market capitalization.. y Positive influence of Finnish exports.Cont..

y Overall growth rates were also on the way out with the major export markets weakening. y Unemployment was also increasing in Finnish society among young and unskilled.Issues & Problems y Slowdown of global telecommunication. y Demand for skilled labor was increasing whereas Nokia had shortage of skilled labor engineers and scientists. y The telecommunication cluster was at its peak and was also facing severe downturn. Case: Finland & Nokia Anam .

Case Analysis FINLAND Case: Finland & Nokia Ammara .

y Reinforcement:  New universities were opened  Huge investments in R&D  Acquisitions for latest technology and market developments  Government was monitoring mergers and acquisitions in private sectors to harmonize and reinforce overall R&D efforts. Case: Finland & Nokia Ammara .Levels of Fitness y Simple consistency:  Finland¶s overall economy was consistent in innovation in telecommunication and IT industry.

.Cont. y Optimization: A telecommunication cluster was emerged in Finland in which smaller companies merged in large conglomerates like Nokia.. The best combination for innovation in telecommunication was formed in Finland. Case: Finland & Nokia Ammara .

Major Business y The 3 largest clusters in Finnish economy were.  Pulp & paper (accounted for 40% of exports) Wood products (accounted for 16% of exports) Engineered metal (accounted for 23% of exports)   Case: Finland & Nokia Ammara .

it started spending more on R&D and did more innovation. y The prices of the property were increasing.2%. Case: Finland & Nokia Ammara . y With the betterment in the Finland economy and when it got stable. y Overall interest rate increased in the economy.Economic Conditions y The real GDP fell by 6. y Finnish exports came down.

over 200 million mobile phones were sold worldwide. y Telecom industry was divided into two parts:   Mobile communication infrastructure Mobile handsets Case: Finland & Nokia Ammara .Telecom Sector y In 2001.

limited number of inhabitants. a small language area y Problems with venture capital (amount.SWOT STRENGTHS WEAKNESSES y y y y Early adopters of mobile phones Leader in mobile penetration High involvement of government in leading companies A high literacy rate y y Unskilled employees and scientists Difficulties in relation to attractiveness. matching of demand and supply) OPPORTUNITIES THREATS y y Going beyond EU. small domestic market area. looking for best competence globally y Intense competition Unemployment (2001) Decreasing sales Open minded and sufficient support for creativity and y innovation y Case: Finland & Nokia Ammara . availability.

the mobile service providers also faced the intense competition throughout the world. y In 2001. y Mobile handsets were sold through service operators as well as through independent dealers.Business Conditions y Telecommunication was the major sector contributing to the business economy with the increasing innovation with growth and stability of the economy. Case: Finland & Nokia Ammara . This had forced the handset manufacturers to develop handsets focused on segments.

y The cluster had grown on average annual rate of 20%.Cluster y The Finnish telecommunication cluster started in 1970s and by 2000 it showed the tremendous growth by employing some 83000 people under 4% of national employment.9% of GDP. Case: Finland & Nokia Ammara . y It gave 6.

Case Analysis NOKIA Case: Finland & Nokia Fahad .

Case: Finland & Nokia Fahad .Origin of Strategic Positioning y ³need based positioning´ as sophisticated demand was there in Army which acted as a seed for the innovation in radio technology.

4. 5. Flexibility (Innovation) Quality (Nokia 2100 was Nokia¶s first consumer targeted model and was sold mainly due to high quality) Delivery speed Service Cost Case: Finland & Nokia Fahad . 2.Operating system focus 1. 3.

Opportunities Emerging telecommunication sector in third world countries Threats Motorola¶s first mover advantage in mobile infrastructure and analog phones¶ Joint venture of Sony and Ericsson Downturn in telecommunication sector Case: Finland & Nokia Fahad .SWOT Strengths Innovation Market leader Increasing sales Acquisitions and JVs for new technology Backward integration Captured markets of different standards Weakness Could not create monopoly as government forbade doing so.

Porter¶s Five Forces Model Bargaining power of customers Low as customers have no/less other option to compare with Threats of new entrants High because related industry competitors were shifting towards telecommunicatio n Intensive because of many local and global competitors. High as overall technology was changing and digital standards were emerging (TDMA. CDMA) Threats of substitutes Case: Finland & Nokia Fahadm Low as large number of contract manufacturers dependent upon Nokia Bargaining power of Suppliers Fahad .

BCG Matrix Case: Fi la d ia Fahad .

Nokia at Corporate Level Case: Finland & Nokia Fahad .

    Customer satisfaction Respect for the individual Achievement Continuous learning Case: Finland & Nokia Fahad .Culture and Core Values y Nokia suffered a crisis situation in late 1980s. y New CEO introduced four fundamentals values of Nokia named them ³Nokia Way´.

Case: Finland & Nokia Fahad .Transferring Skills & Sharing Activities y In 1979. y Mobira expanded through global alliances and established joint ventures in Korea and US. Nokia and Salora created a 50-50 owned joint venture (named as Mobira) to market and develop radio technology.

Case: Finland & Nokia Fahad . y Acquired several electronics companies including PC and office electronics business of Ericsson Information Systems. y In 1990s... Nokia reorganized its supply chain to include contract manufacturers and began to contract for some software development and R&D.Cont.

y Nokia was among top three companies which were active in both. (Other two were Ericsson and Motorola) Case: Finland & Nokia Fahad . infrastructure and handsets in 2001.Diversification y Nokia did related diversification and invested in making mobile handsets.

Case: Finland & Nokia Fahad .Big picture of overall growth In 2001: y Nokia networks: (Multiple setups) 5 plants in Finland 5 in China 1 in Malaysia. y Nokia Mobile Phones had production units in eight countries.

Nokia at Global Level Case: Finland & Nokia Hassan .

y Size of Organization y Manufacturing facilities y World leader in Digital Phones y Technology Case: Finland & Nokia Hassan ...Cont.

y Brand recognition y Market channels y Adaptability y Industry structure y Competitive advantage .

OLI ase: inlan ia Hassan .

Porter¶s Diamond model ase: inland o ia Hassan .

y Finland universities should market them as Global IT & Telecommunication specialized universities to attract more foreign students.Recommendations for issues y NOKIA should focus on high potential Asian and third world countries to give a boost to its overall global sales. NOKIA should get skilled labor from its global existing markets to cope up with skilled labor shortage. Case: Finland & Nokia Hassan .

Finland 2001-2010 Case: Finland & Nokia Abaid .

Cont. y 2005-2007: The Government of Finland granted an operating license to build a new digital mobile communications network. Case: Finland & Nokia Abaid .. which put Finland among the OECD top. y In 2007 Finland¶s research and development expenditure represented 3. Flash-OFDM was chosen as the technology for the network.5% of the gross domestic product.. y 2002-2004: Finnish Government adopted a resolution on the national broadband strategy.

y 2008-2010: New frequencies were allocated to telecommunications companies allowing them to build 4G mobile networks which made Finland the first country in Europe to allow the use of 4G LTE technology at such low frequencies.Cont..000. the number of R&D personnel has grown from 40. y Over the past decade.000 to nearly 80.. This makes over 2% of the overall labor force. Case: Finland & Nokia Abaid .

Nokia 2001-2010 Case: Finland & Nokia Abaid .

announced strategic agreement to increase broadband solution.Cont. y 2003: Nokia built Eizel's foundation to make wireless Internet access interactive and highly satisfying for business users.. y 2002: Nokia Networks. and Redback Networks Inc.. y 2004: Nokia and Metrowerks completed transaction on transfer of application development technology to Nokia Case: Finland & Nokia Abaid .

. Case: Finland & Nokia Abaid . a leader in platform-independent wireless messaging and applications for mobile devices. y 2006: Nokia acquired Intellisync.. y 2007: Nokia acquired Twango to offer a comprehensive media sharing experience:Share photos. y 2005: Nokia Corporation sold all of the approximately 3. video and other media through virtually any connected device.2 million Nextrom holding shares it owned.Cont.

y Nokia acquired Symbian Limited . Case: Finland & Nokia Abaid ..Cont. y 2010: Nokia completes acquisition of Novarra to enhance internet experience in Nokia series 40 mobile phones. y 2008: Nokia completed its acquisition of Trolltech. a recognized software provider with world-class software development platforms and frameworks. y 2009: Microsoft and Nokia formed global alliance to design.. develop and market mobile productivity solutions.

The company blamed a flood of Chinese and fake phones ² devices often marketed under a brand close to Nokia¶s but manufactured by others.Market Share of Nokia in 2010 y Nokia products accounted for 34% of the global market for cell phones. compared with 38% previously announced. Case: Finland & Nokia Abaid .

Thank You .