Download - 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: Finland & Nokia
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.
AnamCase: Finland & Nokia
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.
AnamCase: Finland & Nokia
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.
AmmaraCase: Finland & Nokia
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.
AmmaraCase: Finland & Nokia
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)
AmmaraCase: Finland & Nokia
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.
AmmaraCase: Finland & Nokia
Telecom Sector
In 2001, over 200 million mobile phones were sold worldwide.
Telecom industry was divided into two parts:
Mobile communication infrastructure Mobile handsets
AmmaraCase: Finland & Nokia
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
AmmaraCase: Finland & Nokia
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%.
AmmaraCase: Finland & Nokia
NOKIA
Case Analysis
Fahad
Case: Finland & Nokia
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
Case: Finland & Nokia
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
Case: Finland & Nokia
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
Case: Finland & Nokia
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
Case: Finland & Nokia
Bargaining power of customers
Threats of new entrants
Bargaining power of Suppliers
Threats of substitutes
BCG Matrix
Fahad
Case: Finland & Nokia
Nokia at Corporate Level
Fahad
Case: Finland & Nokia
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
Case: Finland & Nokia
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
Case: Finland & Nokia
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
Case: Finland & Nokia
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
Case: Finland & Nokia
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
Case: Finland & Nokia
Nokia at Global Level
Hassan
Case: Finland & Nokia
Cont...
Size of Organization
Manufacturing facilities
World leader in Digital Phones
Technology
Hassan
Case: Finland & Nokia
Brand recognition
Market channels
Adaptability
Industry structure
Competitive advantage
OLI
Hassan
Case: Finland & Nokia
Porter’s Diamond model
Hassan
Case: Finland & Nokia
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
Case: Finland & Nokia
2001-2010
Finland
Abaid
Case: Finland & Nokia
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
Case: Finland & Nokia
2001-2010
Nokia
Abaid
Case: Finland & Nokia
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
Case: Finland & Nokia
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
Case: Finland & Nokia
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
Case: Finland & Nokia
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
Case: Finland & Nokia
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