Nokia Case Study

History: Nokia's history begins in 1865 when engineer Fredrik Idestam established a ground wood pulp mill on the banks of the Tammerkoski rapids in the town of Tampere, in southwestern Finland and started manufacturing paper. In 1868, Idestam built a second mill near the town of Nokia, by the Nokianvirta River, which had better resources for hydropower production. In 1871, with the help of his close friend statesman Leo Mechelin, Idestam renamed and transformed his firm into a share company, thereby founding the Nokia Company, the name it is still known by today. Through the years the Nokia Company partnered with Finnish Rubber Works Ltd and Finnish Cable Works Ltd. Eventually the three companies, which had been jointly owned since 1922, merged to form a new industrial conglomerate, Nokia Corporation in 1967 and pave the way for Nokia's future as a global corporation. The new company was involved in many industries, producing at one time or another paper products, car and bicycle tires, footwear (including rubber boots), communications cables, televisions and other consumer electronics, personal computers, electricity generation machinery, robotics, capacitors, military communications and equipment such as shortwave radios and gas masks, plastics, aluminum and chemicals. Each business unit had its own director who reported to the first Nokia Corporation President, Björn Westerlund. As the president of the Finnish Cable Works, he had been responsible for setting up the company's first electronics department in 1960, sowing the seeds of Nokia's future in telecommunications. Eventually, the company decided to divest itself of all of its non-telecommunications businesses in the 1990s and focus solely on its fastest growing segments in telecommunications. Financials: In 2008 the price per share was in the high $30s. Nokia stock prices are currently $5 per share, a substantial drop compared to 4 years ago this same time. The stock prices have been steadily dropping ever since. Nokia current market cap is at $22.88 Billion, that’s less than 80% of what the conglomerate was worth in 2008 (~$150B). Nokia Corporation had revenues for the full year 2011 of $38.7B. This was -8.9% below the prior year's results. Nokia Corporation, which holds a market in 6 of the 7 continents, has sales in over 150 countries and employees approximately 130,000 full time employees in 120 different countries. Awards and accolades Here’s a selection of other awards and accolades Nokia has picked up in recent years: • 2011 Forbes Top 10 World’s Most Sustainable Companies (#4) • Top spot in Green peace’s Guide to Greener Electronics 2010 (eight consecutive #1 positions since September 2008) • Universum’s Top 50 World’s Most Attractive Employers for Students 2011 • NASSCOM’s Excellence in Gender Inclusivity in India 2010

in which they operated in for 2 decades. Nokia has tried to make less expensive phones to compete in markets that are beginning to expand such as India and China. Germans felt the proper protocol or process was to inform Germany of the issues which require Nokia Corp to relocate and create a brainstorming session to find a resolution. This would have allowed them to properly manage the city and governments expectations about their decision to move and kept some brand loyalty in an economically strong European nation. 2. Finnish business simply does not operate that way and they knew there was not going to be any solution. Japan and the EU. They are also shifting their focus from mobile telecommunication to internet communication. Along those lines you also have the introduction tablets which offer many apps and internet functionality. if they were to move their plant to Romania. i. Nokia Corp. They also should have been more socially responsible. where super phones are much faster and with way more apps.2010 Best Brand Award in Bangladesh (#1 for third consecutive year) 2010 Bloomberg Business Week Top 25 Most Innovative Companies Top 50 Maclean’s Socially Responsible Companies in Canada 2010 Economic Times Most Trusted Brand in India 2010 (#1) UK Nordic Business award for Research and Development 2010 Modern Consumer magazine’s 2010 Brazil’s “Companies that Most Respect the Consumer” (#1) Case Summary: From this case study I would say that the Finnish conglomerate. the iPhone.e. could have benefitted from a little cultural sensitivity and application of convergence in their management of the German plant. There were certain expectations of Nokia Corp by Germany and those expectations were not met. They are moving their productions to more cost effect countries in order to increase their profit margins as they develop more advanced super phones to market to the more industrialized countries such as the US. they may have come up with an innovative solution that would allow them to move and be competitive. What are the trends in the mobile handset industry? What is Nokia’s strategy and how has globalization changed its way of operation? a. while maintaining. Case Questions: 1. Some say that there is a shift from smart phones to super phones. • • • • • • . The numbers would never add up. b. reputation. if not uplifting the Nokia Corp. assessing not only the benefits and consequences to the corporation but also that of the German city. Current trends in mobile handsets are shifting from regular cell phones to high tech smart phones. Was the German backlash against Nokia justified? How can nations make themselves more competitive? a. The German backlash was justified by Germans due to the way Germans do business. If they had.

they should have discussed the move and possibly setup programs in advance to help decrease the burden of their move. Personally I believe that after 20 years of operation in Germany. if any. Nokia Corp should have done a better job of breaking the news to Germany. . At this point since it has already been about 3-4 years since the plant shut down there is not much that Nokia can do to rectify the situation. This could be in the form of government or private transition or ownership of the plants in order to continue production of some product as opposed to paying unemployment and other fees. Nations have to understand that they must produce their own products or develop a system which protects their economy when a large corporation establishes a business in their country which creates economic dependency. What. Germany should have been given an opportunity to discuss the fate of their city and overall economy. 3.b. I think that even if they knew it was inevitable. This allows employees or government an opportunity to find a contract with someone else for production and utilize the existing infrastructure. Hopefully they returned some of the money they were given in subsidies and setup programs to help the unemployed transition into other forms of work. b. were the flaws in Nokia’s approach to announcing and handling its plant closure? What can the company do now for damage control? a.

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