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INTRODUCTION Mobile phones are one of the fastest growing markets today as it continuously provides new innovations and features. To date, the number of mobile phone users approaches the 1 billion mark. Corporations are the key participants in the increasingly global developments of mobile phones and undeniably, Nokia is one of the notable firms in this industry.
Nokia is today known as the mobile telecommunications giant being the largest mobile phone manufacturers in the world. With an impressing 40 percent global market share and huge global customer base that now numbers more than two billions of users, indeed, Nokia is an absolute world leader in mobility. This company is even the reason why Finland is a prosperous country in which it is accounted for about 30 percent of the nation's market capitalization.
Unknowingly, Nokia had a really humble beginning. It all started in 1865 when mining engineer Fredrik Idestam established a groundwood pulp mill on the banks of Tammerkoski rapids in southwestern Finland, and started manufacturing paper. In 1868, Idestam built a second mill near the town of Nokia. This town
was named after the Nokianvirta river, known for better resources for hydropower production, which flowed through the town.
but it took a merger with a cable company and a rubber firm to set the new Nokia Corporation on the path to electronics. the company would become a major industrial force. footwear. BODY A Glimpse at Nokia’s Past The history of Nokia dates back in 1865 from the wood pulp mills on the banks of Tammerkoski rapids and the Nokianvirta River. The new company tried producing many products like papers. bicycle. car tires. personal computers. the Finnish Cable Works. with the help of his close friend statesman Leo Mechelin. among these products. Finnish Rubber Works began establishing its factories. aluminum. II. communication cables. thereby founding the Nokia Company. the name it is still known by today. Idestam. Between 1865 and 1967. 2 . This company acquired the Nokia Wood Mills and also acquired a company producing telegraph and telephone cables. However. televisions. electricity generation machineries.In 1871. electronics made up about 3% of the overall company sales. and a lot more. renamed and transformed his firm into a share company. capacitors. At the beginning of the 20th century. The merging of these three companies in 1967 led to the creation of the Nokia Corporation.
It was around this time that a department called Dedicated Networks was set up to deal specifically with transmission technology and Private Mobile Radio (PMR). The seeds of Nokia's eventual international success had been planted. in the late 1980s and early 1990s. After Kairamo's death. Nokia ran into serious financial problems due to its heavy looses by the television manufacturing division and businesses that were just too diverse. Nokia had begun focusing its energies internationally on becoming a communications company. Dedicated Networks had a global sales base. It was headed by their Chief Executive Officer named Kari Kairamo where he was able to expand Nokia into new fields. Conflicts within Nokia management escalated. Although initially based in Finland. and a suspected total burnout.By 1980. The Soviet Union disintegrated. Nevertheless. However. mostly by acquisitions. These problems. The biggest blow came in 1988 when the television business that had been acquired in Germany turned out to be in the red. Nokia’ Biggest Challenge Nokia expanded into new fields in the 1980s. contributed to Kairamo’s suicide in December 1988. Nokia wound up in an internal crisis which continued as the large European chaos began. The development in the company’s financial result took a steep turn for the worse. and Finland’s Eastern trade disappeared. a path to the West was 3 . The share price plummeted.
and by divesting itself of the television and PC divisions. Ericsson. With these two at the helm. high-level education and Ehrnrooth which represents a family that traditionally owned industrial companies. a career manager with a many-sided. and the new Chairman of the Board was Casimir Ehrnrooth.M. but the country first fell into a deep economic depression. The arguing parties. Nokia shareholders even negotiated selling the company to L. were forced to step down. Nokia’s astonishing rise to the ranks of the world’s largest companies began. These two personalities gave hope to the rise of Nokia having Ollila. The company responded by streamlining its telecommunications divisions. simplified The 41-year-old Jorma Ollila took over as CEO. Simo Vuorilehto became Nokia's Chairman and CEO. 4 .opened for Finland. both among the owners and within management that shook Nokia. Under Vuorilehto's management. Nokia’s Strategic Change It was in 1992 when the most important strategic change in Nokia's history happened. Nokia was restored. Thereafter. organizational structure was created. a new.
It was only in 1982 that they were able to introduce their first car phone called the Mobira Senator. during the rest of the 1990s.8 kg. The Nokia First Mobile Phone Nokia started producing military as well as commercial mobile radio communications technology in the 1960s. They started to create VHF-radio with the company named Salora Oy in 1964. cable and consumer electronics divisions were gradually sold as Nokia continued to depart itself on all of its non-telecommunications businesses. With the boom of mobile telephones. South America and Asia. This motivated Nokia to revamp its entire logistics operation.Ollila made a crucial strategic decision to concentrate solely on telecommunications. beyond even Nokia’s most optimistic predictions. Nokia met another big challenge of facing logistics crisis in mid1990s. Nokia saw a huge increase in sales to North America. Thus. the rubber. which weighted 9. The two companies started to develop mobile phones for network standard. Although more than a quarter of Nokia’s turnover still came from sales in Finland. 5 . Nokia’s new diversified management boldly separated the company from the past and set its focus on telecommunications. and technological developments were accelerating. This occurred at exactly the right timing when the international telecom markets were opening.
provided valuable experience for Nokia for its close participation in developing GSM. During those days. Although that was very expensive.In 1984. 6 . Nordic Mobile Telephony (NMT). This was then adopted in 1987 as the new European standard for digital mobile technology. Nokia is said to be one of the key This is a second-generation mobile technology which could carry data as well as voice traffic. the company also launched the Mobira Talkman. the Cityman is one of the most light-weight phones having only about 800 g. In the same year. the world's first transportable phone. the first Global Systems for Mobile Communications or popularly known as GSM phone was introduced. In addition. developers of the GSM technology. After three years. Nokia and the Global Systems for Mobile Communications The Nokia Mobile Phone emerged from the Nokia Mobira Oy in 1988. the merging with Salora Oy made the company to create its telecommunication branch named Nokia-Mobira Oy. Cityman was still considered a success. But its tag price is approximately 4.500 Euros. Nokia introduced one of the world's first handheld phones in 1987 and this was called Mobira Cityman 900. the world's first mobile telephony standard that enabled international roaming.
using a prototype Nokia GSM phone. Nokia introduced a classic game highly associated with the company-Snake. the Nokia tune was introduced as a ringtone in 1994 with the Nokia 2100 series. The world's first commercial GSM call was made on July 1. 1991 in Helsinki.000 units but was able to sell 20 million units. Subsequently. By 1998. 10 November. The foundation for a worldwide boom in mobile phone use can be attributed to the GSM's high-quality voice calls.In 1989. the first GSM phone. And in 1997. The success of Nokia continued until the world's first satellite call was made in 1994 using a Nokia mobile phone. The domination of the GSM in the world of mobile telephony came in the 1990s. The model number refers to its launch date. Nokia was able to deliver its first GSM network to the Finnish operator Radiolinja. easy international roaming and support for new services like Short Message Service (SMS) or the text messaging capability. by then Prime Minister of Finland Harri Holkeri. Nokia’s focus on telecommunications and its early investment in GSM technologies had made the company the world's largest mobile phone 7 . was launched. the Nokia's characteristic ringtone. Finland over a Nokia-supplied network. In 1992. This phone series was an incredible success having set its goal to sell 500. the Nokia 1011.
the Nokia 7110. After a year.5 billion euros to 31 billion euros. Center (NRC) was founded in 1986. Nokia Technology Strategy Nokia mobile phones continue to be one of the best and most innovative in the world. It gives access to the right technologies at the right time. or 1. New connections are added at the rate of 15 per second. Its use of technology is a key contributor to the company’s overall business goals. Nokia’s turnover increased almost fivefold from 6. helps shape the future competitive landscape and encourages innovation through openness to benefit consumers. the company moved to further innovation with its launching of the first WAP handset in the world. the mobile telephone subscribers in the world reaches for about three billion.3 million per day.manufacturer and the world's leader. The Nokia Research It is Nokia's industrial research unit consisting of about 500 researchers. The right technology strategy provides revenue through differentiation. with more than 700 mobile operators across 218 countries and territories. Logistics continues to be one of Nokia's major advantages over its rivals. engineers and scientists. One of the key success factors of Nokia is their continuous high investment in their Research and Development (R&D). along with greater economies of scale and in mid-2008. Between 1996 and 2001. brings cost advantage and a favorable supply environment. It has sites in 8 .
Nokia's industrial design department is headquartered in Soho in London. Mexico. Brazil. Hungary. up from 11% of net sales in 2007. R&D expenses totaled EUR 5. Switzerland. England.020 people in research and development. Farnborough. The Program will accelerate technological innovation by attracting high potential students and enabling wider cooperation with the China research community. China. England with significant satellite offices in Helsinki. Romania and Masan. India.seven countries: Finland. Postdoctoral researchers will concentrate on areas such as Asian use. Beijing. Nokia had R&D presence in 16 countries and employed 37. Nokia operates a total of 15 manufacturing facilities located at Espoo. South Korea. Jucu. Reynosa.8% of Nokia's net sales in 2008. Komárom. the United Kingdom and the United States. India. As of December 2009. an R&D institute located in Brazil. California in the USA With the significant expansion of its Research and Development undertakings in China. Finland and Calabasas. Manaus. 9 . Nokia founded in 2001 the Nokia Institute of Technology (INdT). Kenya. Besides its research centers. Oulu and Salo. representing approximately 30% of the group's total workforce.968 million in 2008. Dongguan and Suzhou. China. Nokia launched the Nokia Postdoctoral Program which provides educational and research opportunities for postdoctoral researchers to work on advanced telecommunication technology research projects. representing 11. Finland. Chennai.
Nokia’s strategy is to have a short and medium term strategy where Nokia researchers support the product development units to master key technologies and their evolution. III. Research also serves as an organizational pioneer. This enables NRC to engage with the foremost minds and partners in the mobile field to conduct leading-edge research. They also have their long term strategy where research aims to disrupt the present. NRC empowers Nokia to develop products and services that meets the needs of their customers.The worldwide presence of Nokia Research Center proves that it is now a truly global organization. They are also encouraged to bring forth ideas for new business development. This enables them to develop competitive products efficiently. By bridging this wide variety of cultures. CONCLUSION 10 . environments and skill-sets across these diverse geographies. Nokia aims for technology leadership in all device categories developing the most rewarding consumer experiences that allow people to connect to what matters to them. Research in different sciences with global participation is a prerequisite for creating these disruptions. Researchers keep the organization moving by challenging the present working methods and technologies.
seamless. interconnected and easily integrated. From 1865 until today. It has gone through its most difficult times of trials having experienced a deep recession which even resulted in the suicide of its Chief Executive Officer in 1988. rubber. Nokia conducts consumer research and studies the ways in which people interact with mobile devices and use technology to ensure that new technologies meet the needs of the people. And in just over 100 years.The humble beginning of Nokia Corporation having its roots in paper. Nokia continues to create mark on the mobile phone industry. and cables is a living example of a big success in technology. However. despite the depth of the recession. This approach enables Nokia to bring new products and services to market at the right time and in the right way. Its guiding principle is whether people will use the technology in their everyday lives to connect and share with others. This is the reason why Nokia mobiles are said to be the most “user-friendly” mobile phone in the market today. Technologies need to be easy to use. Nokia becomes a powerful industrial corporation. 11 . Innovation is always at the top of this company and its history proved its fearless business moves that led it to its massive success. Nokia deeply believes that it is vital to make the right choices of technology. Nokia came to its feet quickly as its eager and dedicated people started formulating strategic plans which could revive the company.
Nokia will surely continue to be a veteran thriving in a never-ending emerging industry. innovation and bold first mover strategy. Nokia and its strategy for success is not invulnerable.Nokia’s success in the past can be attributed to its determination. Indeed. Nokia has learned from its mistakes and struggled to move on quickly. Nokia continues to lead the cellphone market as it continuous to fill shelves with new and innovative products to dominate categories. as recent performance shows. Nevertheless. Its secret code could not be found in its historical strategies but in its strategic history. The company had grown and became the world’s largest manufacturer of mobile phones. solidified own strengths and weakened powerful competitors. 12 . With its lessons learned from the past. However. Left and right competitors like Apple’s iPhone and RIM’s BlackBerry in the high-end segment will always remain a threat to Nokia’s unfaltering success.