Finland and Nokia:

Creating the World’s Most

Competitive Economy

Agenda

History of Nokia History of Finland Situational AnalysisActionable

Recommendations

History of Nokia History of Finland Situational Analysis Actionable Recommendation

Overview of growth

strategy from 1865 – 2001

Finland pre 1990s

Finland 1990-2001

Growth in telecom

cluster

Current situation of

Finland and Nokia – 2001

Porter’s diamond model

Porter’s five forces

Nokia SWOT Analysis

Critical Challenges

Recommendations for

Finnish government

Recommendations for

Nokia

History of Nokia

History of Nokia

History of Nokia History of Finland Situational Analysis Actionable Recommendation

1865

Entry into

pulp & paper

industry

1967

Modern

business

form

Joint Venture

with

Telefenno

50/50 Joint

Venture with

Salora

Development

of Consumer

Brand

1970s 1979 1980s

History of Nokia

History of Nokia History of Finland Situational Analysis Actionable Recommendation

1990s

Financial

Crisis

1995

Developed

own CDMA

phone

Nokia Telecommunications – Telefenno & Televa

New York Stock Exchange

2000s

Growth rates slowing. Intense competition. Production capacity

outstripped.

History of Finland

History of Finland

History of Nokia History of Finland Situational Analysis Actionable Recommendation

Finland Pre 1990s

• Endowment of natural resources

• Dominated by manufacturing industries with small service sector

• High degree of government intervention in economy

• Tightly regulated financial markets

• Good quality public education and university system

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

GDP growth rate Foreign Direct Investment

History of Finland

History of Nokia History of Finland Situational Analysis Actionable Recommendation

Finland 1990-2001

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

19

80

198

1

198

2

198

3

198

4

198

5

198

6

19

87

198

8

198

9

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

GDP growth rate Foreign Direct Investment

• Tight macro-economic policies adopted

• Greater emphasis on long-term micro-economic policies

• Scientific and Technology Policies

• Educational Reforms

• Liberalization of Capital Markets

History of Finland

History of Nokia History of Finland Situational Analysis Actionable Recommendation

Telecommunication Cluster

• Early adopter of winning technologies NMT and GSM

• Liberalizing Markets

• Abundant R&D and Expertise

• Nokia

40%

23%

16%

21%pulp andpaper

woodproducts

engineeredmetalproducts

other

1970

30%

30%

20%

20%electronicproducts

pulp andpaper

engineeredmetalproductsother

1999

Situational

Analysis

Situational Analysis

History of Nokia History of Finland Situational Analysis Actionable Recommendation

Finland

• Riding high from policies enacted in the 1990’s

• Highly active and competitive telecommunications cluster

• Beginning of the end OR a new beginning?

• Strong financials

• Multinational structure

• Highly diverse product portfolio

• Willing to form partnerships/collaborations

• Struggling with evolving standards and telecom downturn

Situation in 2001

Nokia

Porters Five Forces – Telecom Industry

MEDIUMCompetitive

Rivalry within the Industry

LOWThreat of

New Entrants

LOWThreat of Substitute Products

LOWBargaining Power of Suppliers

LOW Bargaining Power of

Customers

History of Nokia History of Finland Situational Analysis Actionable Recommendation

SWOT - Nokia

Strength Weakness Opportunities Threats

• Leading telecom company

• Vertically Integrated

• Abundance of suppliers

• Finland has early adopters & majority – many dropped their landlines

• Majority share of market

• Covers every market segment

• Broadest geographical coverage

• Further improve competitive advantage in mobile phone industry

• Can have first mover advantage with some product offerings

• Standards are evolving rapidly

• May be slower than competitors in R&D

• Growing competitive landscape

• Slowing growth in market

• Not open to licensing

• Only 3% of revenues are from Nokia Ventures

History of Nokia History of Finland Situational Analysis Actionable Recommendation

Porters Diamond Model - Finland

MODERATEFactor Conditions

FAVORABLEFirm Strategy, Structure and

Rivalry

FAVORABLEDemand

Conditions

FAVORABLERelated and Supporting Industries

History of Nokia History of Finland Situational Analysis Actionable Recommendation

Chance

Government

Situational Analysis

History of Nokia History of Finland Situational Analysis Actionable Recommendation

• Strong financials

• Multinational structure (remains Finnish)

• Highly diverse product portfolio

• Willing to form partnerships/collaborations

• Struggling with evolving standards and telecom downturn

• Shortage of skilled engineers and scientists

• Rising unemployment rate

• Weak major export markets

• Slowing market growth

• Growing competitive landscape

• Majority of technology kept in-house

Current Challenges

Finland Nokia

Actionable

Recommendations

Actionable Recommendations

History of Nokia History of Finland Situational Analysis Actionable Recommendation

Incentivize

internships

Fund R&D in

telecommunication-

specific universities

Finnish Government Nokia

Invest more in “Venture”

R&D and emphasize

product development

Promote 70-20-10

rule

Partnerships to

support product

development

01 02 0301 02

Thank you for listening.

Questions?

APPENDIX

APPENDIX

REFERENCES

Nokia Lumia 800, mblebusch - https://www.flickr.com/photos/mbiebusch/6544494111 - Taken on December 20, 2011

Nokia N9 front view, Nokia connect - https://www.flickr.com/photos/41118175@N05/6150286027 - Taken on June 9, 2011

Nokia Lumia 1520, Karlls Dambrans - https://www.flickr.com/photos/janitors/11433220843 - Taken on December 18, 2013

Nokia Lumia 800 WP7.8, mblebusch - https://www.flickr.com/photos/mbiebusch/8310524662 - Taken on December 25, 2012

Midnight sun, Josef.stuefer - https://www.flickr.com/photos/josefstuefer/14973471 - Taken on July 14, 2004

Helsinki 013 – Puerto / Harbour, Claudio.Ar - https://www.flickr.com /photos/claudio_ar/2535281684 - Taken on May 4, 2008

Helsinki 005 – Villing, Claudio.Ar - https://www.flickr.com/photos/claudio_ar/2511949029 - Taken on May 4, 2008

Heron’s nest, Ville Mlettinen - https://www.flickr.com/photos/wili/217632962 - Taken on August 17, 2006

Weak ice at Ruonala, Jyrki Salmi - https://www.flickr.com/photos/salman2000/15979266129 - Taken on December 31, 2014

Langinkoski, Jyrki Salmi - https://www.flickr.com/photos/salman2000/15354131804 - Taken on December 7, 2014

My favorite spot, Daniele Zanni - https://www.flickr.com/photos/syymza/8388497781 - Taken on January 17, 2013

Business meeting, tax haven - https://www.flickr.com/photos/83532250@N06/7650804342 - taken on October 26, 2007

Primary Mirror Segment Engineering Design unit – NASA’s James Webb Space Telescope - https://www.flickr.com/photos/nasawebbtelescope/5556216838/in/photolist-9sZ4G3-

npCqVP-mwfsLc-mwhhZd-bEAmu-mwhhX9-bHcq4v-6xs6Ei-mwfZXZ-oh4NGu-X281-cW3F6C-bo2eHB-cW3FEA-dPE87X-rbG4MK-b9w2NF-7jZ5JV-dJX9cQ-8TiHAy-bo2eHP-

95jiiR-p1E9W1-2hLYq-bsq7bm-7DVH6T-dJX9aQ-nrp1sc-ehoU1u-buUpCR-3VVLiE-5RoyVU-8uNq9z-7iu6P2-dJX9aS-dJRGxr-8YTLR9-6GM4vF-8jRNZZ-cW3Fof-oN9p4X-

cW3EX9-fQrUwL-8jZUoy-odXo7s-8iSdn9-8jWH9F-bZwkbN-fvmdqE-EKx8b - Taken on March 22, 2011

Materials Engineering Research Facility, Argonne National Laboratory - https://www.flickr.com/photos/argonne/7831536486 - Taken on July 27, 2012

Handshake – 2 men, Flazingo Photos - https://www.flickr.com/photos/124247024@N07/13903385550/in/photolist-6rUPaH-nbAu8Y-5teuPz-gJPzZF-34n5et-34n54H-4fQrFZ-

faRfEy-mj7di2-bYZ5rC-dxGwon-7Sz7nr-5vTqnK-8Jdzs-bz29nH-kQZnHF-oLV21-j66EQ-nt8bww-8RedFB-71ZMnt-q3YscJ-qsRDQY-dm7ZQ1-cqt5oQ-8sQvn3-eifksN-7EAY63-

dq4Rih-7VHu5X-5hDZim-o3iyh5-8R6pwz-8R9wHo-8R9wEE-8R9wCE-7MnYfa-b6iSVe-AxqGj-8R6ptF-7cXkxw-88EEon-pA5Gdk-crKQKJ-bRDniD-57C55p-6c5J5A-nnzFRH-

6FADUs-bocvhU - Taken on April 27, 2014

REFERENCES

Growth chart, Grisel D’An - https://www.flickr.com/photos/128454566@N06/16241933126/in/photolist-8LCNW2-hw9juh-4vvyMd-ahtKQx-7XSjgx-8LJWEw-qK3zJG-qKf9RL-piUrYR-pA9cyZ-pAoFX8-piU3rw-piUrjK-piUqBx-pA7zHc-pA7AcP-9cdcrp-9pL94D-7yNv8N-kYd6RF-pA7Akz-pA7yGK-piU48w-pAoEqF-pymeid-pAmNKY-pA7ySz-piUq9P-pAmPdm-piTHx1-eaoQUH-4xWFST-7gSBZd-aiSygZ-9rn9Yh-7gPrf1-ifz6wb-7gKG7i-7gNFxv-a9hgJ4-ouFX9w-8Uy8AW-9QSPAG-7CiALc-3eorJJ-Jf7zF-ad6shV-3ej4yD-3eorY1-3eorNL - Taken on January 12, 2015

Startup live Vienna, helsenberg media - https://www.flickr.com/photos/heisenbergmedia/8417742500/in/photolist-2rMCdG-hScdbZ-aZa95c-cCmJjQ-5mbBD2-cCmN6J-3er8RK-7eDyv4-aA7VqS-dP6W49-cCmRC9-dPR8zo-dPR84h-4pCYy2-dP6Wa3-cCmLq3-T3vta-dP1fx2-hjGepU-cCmVdm-T3vrn-cCmThm-e91SZt-7eDxQM-dP6V2b-cCmQvS-dPR86s-e97wEf-cCnb23-nz6WC-dP1iwi-dP6Sqq-oHcfHM-aA7UJb-deYVWw-cCmUGw-hi5tJo-dP6USL-dP6Sw7-dP1gar-aA5cLi-8MfBKr-cCmJNj-cCmG8f-deMFUg-deMFtm-oHchTZ-aA7Uwy-deMFuY-dPR8bU - Taken on January 26, 2013