finland & nokia

CASE ANALYSIS

Finland and Nokia

Group Members

Abaid UllahAmmara AttaAnam FarooqFahad ButtHassan Zulqarnain

Case: Finland & Nokia

Presentation Plan

Case Summary Anam FarooqIssues & Problems Anam FarooqCase Analysis

Finland Ammara Atta Nokia Fahad Butt

Nokia at Corporate level Fahad ButtNokia at Global level Hassan

ZulqarnainFinland & Nokia 2001-2010 Abaid

Ullah


Case Summary

In the 1980s, a process started of moving out of an investment-driven economy into an innovation-driven one.

With the collapse of the Soviet Union around 1990, Finland reached a crisis.

Finland became the member of the European Union with fiscal stability.

Finnish constitution had the semi-presidential form of government that plays a significant role in forming the good foreign relations.

AnamCase: Finland & Nokia

Cont...

Nokia accounting for some 70% to 80% of the cluster exports and the world leader in mobile phones.

Finnish government plays an important role in the leading companies of the Finland industry.

Positive influence of Finnish exports, R&D expenditures and market capitalization.


Issues & Problems

Slowdown of global telecommunication.Overall growth rates were also on the way out

with the major export markets weakening.The telecommunication cluster was at its

peak and was also facing severe downturn.Demand for skilled labor was increasing

whereas Nokia had shortage of skilled labor engineers and scientists.

Unemployment was also increasing in Finnish society among young and unskilled.


FINLAND

Case Analysis

AmmaraCase: Finland & Nokia

Levels of Fitness

Simple consistency: Finland’s overall economy was consistent in

innovation in telecommunication and IT industry.

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.


Cont...

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.


Major Business

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)


Economic Conditions

The real GDP fell by 6.2%.Finnish exports came down.Overall interest rate increased in the

economy.The prices of the property were increasing.With the betterment in the Finland economy

and when it got stable, it started spending more on R&D and did more innovation.


Telecom Sector

In 2001, over 200 million mobile phones were sold worldwide.

Telecom industry was divided into two parts:

Mobile communication infrastructure Mobile handsets


SWOT

STRENGTHS

Early adopters of mobile phones

Leader in mobile penetration

High involvement of government in leading companies

A high literacy rate

WEAKNESSES

Unskilled employees and scientists

Difficulties in relation to attractiveness; small domestic

market area, limited number of inhabitants, a small

language area

Problems with venture capital (amount, availability,

matching of demand and supply)

OPPORTUNITIES

Going beyond EU, looking for best competence globally

Open minded and sufficient support for creativity and

innovation

THREATS

Intense competition

Unemployment (2001)

Decreasing sales


Business Conditions

Telecommunication was the major sector contributing to the business economy with the increasing innovation with growth and stability of the economy.

In 2001, the mobile service providers also faced the intense competition throughout the world. This had forced the handset manufacturers to develop handsets focused on segments.

Mobile handsets were sold through service operators as well as through independent dealers. AmmaraCase: Finland & Nokia

Cluster

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.

It gave 6.9% of GDP.

The cluster had grown on average annual rate of 20%.


NOKIA

Case Analysis

Fahad


Origin of Strategic Positioning

“need based positioning” as sophisticated demand was there in Army which acted as a seed for the innovation in radio technology.

Fahad


Operating system focus

1. Flexibility (Innovation)2. Quality (Nokia 2100 was Nokia’s first

consumer targeted model and was sold mainly due to high quality)

3. Delivery speed4. Service 5. Cost

Fahad


SWOT

Fahad

StrengthsInnovation

Market leaderIncreasing

salesAcquisitions and JVs for

new technologyBackward

integrationCaptured

markets of different standards

Weakness

Could not create monopoly as government forbade doing so.

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 telecommunicati

on sector


Porter’s Five Forces Model

Fahadm Fahad

Intensive because of many local and global

competitors.

Low as customers have no/less other option to compare

with

High as overall technology was

changing and digital standards were

emerging (TDMA, CDMA)

Large number of contract

manufacturers dependent upon

Nokia

High because related industry

competitors were shifting towards

telecommunication


Bargaining power of customers

Threats of new entrants

Bargaining power of Suppliers

Threats of substitutes

BCG Matrix

Fahad


Nokia at Corporate Level

Fahad


Culture and Core Values

Nokia suffered a crisis situation in late 1980s.

New CEO introduced four fundamentals values of Nokia named them “Nokia Way”.

Customer satisfaction Respect for the individual Achievement Continuous learning

Fahad


Transferring Skills & Sharing Activities

In 1979, Nokia and Salora created a 50-50 owned joint venture (named as Mobira) to market and develop radio technology.

Mobira expanded through global alliances and established joint ventures in Korea and US.

Fahad


Cont...

In 1990s, Nokia reorganized its supply chain to include contract manufacturers and began to contract for some software development and R&D.

Acquired several electronics companies including PC and office electronics business of Ericsson Information Systems.

Fahad


Diversification

Nokia did related diversification and invested in making mobile handsets.

Nokia was among top three companies which were active in both, infrastructure and handsets in 2001. (Other two were Ericsson and Motorola)

Fahad


Big picture of overall growth

In 2001:Nokia networks: (Multiple setups) 5 plants in Finland 5 in China 1 in Malaysia.

Nokia Mobile Phones had production units in eight countries.

Fahad


Nokia at Global Level

Hassan


Cont...

Size of Organization

Manufacturing facilities

World leader in Digital Phones

Technology

Hassan


Brand recognition

Market channels

Adaptability

Industry structure

Competitive advantage

OLI

Hassan


Porter’s Diamond model

Hassan


Recommendations for issues

NOKIA should focus on high potential Asian and third world countries to give a boost to its overall global sales.

Finland universities should market them as Global IT & Telecommunication specialized universities to attract more foreign students. NOKIA should get skilled labor from its global existing markets to cope up with skilled labor shortage.

Hassan


2001-2010

Finland

Abaid


Cont...

2002-2004: Finnish Government adopted a resolution on the national broadband strategy.

2005-2007: The Government of Finland granted an operating license to build a new digital mobile communications network. Flash-OFDM was chosen as the technology for the network.

In 2007 Finland’s research and development expenditure represented 3.5% of the gross domestic product, which put Finland among the OECD top.

AbaidCase: Finland & Nokia

Cont...

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.

Over the past decade, the number of R&D personnel has grown from 40,000 to nearly 80,000. This makes over 2% of the overall labor force.

Abaid


2001-2010

Nokia

Abaid


Cont...

2002: Nokia Networks, and Redback Networks Inc. announced strategic agreement to increase broadband solution.

2003: Nokia built Eizel's foundation to make wireless Internet access interactive and highly satisfying for business users.

2004: Nokia and Metrowerks completed transaction on transfer of application development technology to Nokia

Abaid


Cont...

2005: Nokia Corporation sold all of the approximately 3.2 million Nextrom holding shares it owned.

2006: Nokia acquired Intellisync, a leader in platform-independent wireless messaging and applications for mobile devices.

2007: Nokia acquired Twango to offer a comprehensive media sharing experience:Share photos, video and other media through virtually any connected device.

Abaid


Cont...

2008: Nokia completed its acquisition of Trolltech, a recognized software provider with world-class software development platforms and frameworks.

Nokia acquired Symbian Limited .2009: Microsoft and Nokia formed global

alliance to design, develop and market mobile productivity solutions.

2010: Nokia completes acquisition of Novarra to enhance internet experience in Nokia series 40 mobile phones.

Abaid


Market Share of Nokia in 2010

Nokia products accounted for 34% of the global market for cell phones, compared with 38% previously announced. The company blamed a flood of Chinese and fake phones — devices often marketed under a brand close to Nokia’s but manufactured by others.

Abaid


Thank You

finland & nokia

Documents