nora sakari a proposed joint venture in malaysia marketing essay

7/26/2019 Nora Sakari a Proposed Joint Venture in Malaysia Marketing Essay

1/5

6/12/2016 Nora Sakari A Proposed Joint Venture In Malaysia Marketing Essay

https://www.ukessays.com/essays/marketing/nora-sakari-a-proposed-joint-venture-in-malaysia-marketing-essay.php

New for 2016 - Get the grade from your tutor or your money back! (/guarantees.php)

Nora Sakari A Proposed Joint Venture In

Malaysia Marketing EssayPublished: 23, March 2015Our team consisted of three members Miniru Cole, Syed Haseeb Sadiq, and Douglas

Hansotte. Our team decided on the case study titled "Nora-Sakari: A Proposed JV in

Malaysia" by the Richard Ivey School of Business (The University of Western Ontario)

because of its interesting content and as a team we feel that this particular case is very

informative because it coincides with the material learned in International Business MGMT

650 and provides a great deal of insight into the internal activities of developing,

negotiating, and the attempting to facilitate a joint venture between a local business and aforeign entity. Our team has analyzed the details surrounding this particular case and look

forward to providing a full analysis of the case, which includes a summary of facts,

statement of assumptions, analysis of the situation and summary of problems, plan of

action, alternative options, and other solutions that may be viable in this the circumstance

of the case study.

(/services/essay-writing-service.php)

In particular this case study involved three parties: Nora Holdings SDN Bhd, Sakari Oy

Company, and Telekom Malaysia Bhd, though the latter had little involvement except for

providing the capital for the initial bid and deciding on the winning bids. In 2002 Telekom

Malaysia Bhd (TMB), the national telecom company of Malaysia, was given the authority by

the Malaysian government to develop the country's telecom infrastructure. Telekom

Malaysia Bhd did not possess the technology and expertise to take on a project of this

magnitude. For these reasons TMB called for tenders to bid on a ve-year project worth

RM2 billion (6,305,000.00 $USD) for installing digital switching exchanges in various parts

of Malaysia.

The nal objectives of this project would be as follows and were in line with the Malaysian

government's Vision 2020:

1. Invest in the digitalization of its network in order to oer services based on the ISDN

(integrated services digitalized network) standard;

2. Invest in international ber optic cable networks to meet the needs of increased

telecom trac between Malaysia and the rest of the world; and

3. Facilitate the installation of more cellular telephone networks in light of the increased

demand for the use of mobile phones among the business community in the capital of

Malaysia (KL) and in all major cities and towns in Malaysia.
https://www.ukessays.com/services/essay-writing-service.phphttps://www.ukessays.com/services/essay-writing-service.phphttps://www.ukessays.com/guarantees.php


2/5



Background information on parties involved

Nora Holdings Sdn Bdh

Nora Holdings Sdn Bdh of Malaysia was established in 1975 with a paid-up capital of RM2

million. Nora became a leading company in the telecom industry in Malaysia and

consisted of 30 subsidiaries including two public listed companies: Multiphone Bhd. And

Nora Telecommunications Bhd. Nora employed 5,669 employees and since its

establishment gained experience in cable-laying projects; manufacturing telephonehandsets; installing, operating, and maintaining payphones in the cities and major towns

of Malaysia; and distributing Apple computers; distributing radio-related equipment;

supplying equipment to the broadcasting, meteorological, civil aviation, postal and power

authorities in Malaysia and; manufacturing automotive parts.

Sakari Oy

Sakari Oy of Finland was established in 1865 and began as a pulp and paper mill

production company. In the 1960s Sakari expanded into the rubber and cable industry. In

1975 Sakari entered into the computers, consumer electronics, and cellular phones

industries via a series of acquisitions, mergers and alliances. In 1979, a JV between Sakari

and Vantala, was set up to develop and manufacture mobile telephones and gained a

large percentage of the world, European including the United Kingdom, Malaysian, and

Thailand market for the production of mobile phones and mobile phone handsets. In

using the technology gained from their previous acquisitions and working experience,

Sakari Oy gained an edge and distinct advantage in the telecom industry by selling

switching systems licensed from France's Alacatel and by developing the software and

systems to suit needs of small Finish phone companies. In order to avoid competition,

Sakari concentrated on developing dedicated telecom networks for large private users

such as utility and railway companies.

In 2001, Sakari was Finland's largest publicly-traded industrial company and derived the

majority of its total sales from exports and oversea operations. However, in recent years

the company made eorts and succeeded in globalizing and diversifying its operations to

make the most of its high-tech capabilities. As a result, Sakari emerged as a more

inuential player in the international market and had gained international brand

recognition. One of Sakari's strategies was to form JVs to enter foreign markets. Sakari

attributed its emphasis on R & D as its key success factor in the telecom industry.

(/order/)

Summarization of Events

In January 2003, Nora Holdings SDN Bhd submitted its bid for TMB's RM2 billion contract

to supply switching exchanges supporting four million telephone lines with the

assumption that the Nora-Sakari JV would materialize by the time they would begin

operations. Nora was one of seven companies short listed by TMB. Each company was

awarded one-fth share (1,261,000 $USD) of the RM2 billion (6,305,000.00 $USD).
https://www.ukessays.com/order/


3/5



Nora felt that was eager to secure this bid because of both the nancial gain, but most

importantly it was due to the added benet of acquiring the knowledge in switching

technology from its partnership with a telecom Multi-National Cooperation (MNC).

Specically Nora was interested in Sakari Oy for the following reasons:

Sakari's technical knowledge and expertise - Sakari's SK33, a digital switching system,

which enabled the use of standard components, standard software development tools,

and standard software languages. Components of the SK33 could easily be found in the open market.

SK33 was a modular system, its software could be upgraded to provide new services

and could interface easily with new equipment in the network, and eventually lead to the

development of new switching devices.

Flexibility in production - Sakari's smaller size enabled them to develop/produce

customized products according to Nora's needs, while in contrast large telecom

companies were less will to provide custom-made products; instead they oered standard

products that were inconsistent with the needs of the customer.

Sakari Oy was interested in this prospect because it would enable them to begin

operations in a new market, specically the Asian-Pacic market. Following the award of

the bid Nora and Sakari Oy sent their respective teams to apeak with each other because

of the initial concerns that each party had about one another.

1. Nora's capability in penetrating the south-east Asian market.

2. Sakari's concerns over the eciency of Malaysian workers in the JV in manufacturing the

product, maintaining product quality and ensuring prompt deliveries.Nora and Sakari Oy met 20 times for the period of a year. The key points of negotiation

were equity ownership, technology transfer, royalty payments, expatriates' salaries and

perks, and arbitration. In the section "Analysis of the situation" our team will discuss the

specic negotiation points outlined in the case study and provide suggestions as to what

each party could have done, followed up with alternative actions that Nora could possibly

do to simply complete the task and nd a viable partner to enter a joint venture with.

Below is a list of the reasons as to why the negotiations did not materialize into a joint

venture:

1. Dierence in cultures;

2. Dierence in management styles; and

3. Inability of both parties to compromise on key issues;

PART II: STATEMENT OF ASSUMPTIONS

PART III: ANALYSIS OF THE SITUATION AND SUMMARY OF PROBLEMS

(start of miniru's section)


4/5



Analysis of Situation and Summary of Problems

Analysis of Situation

The situation in the case is that the Nora has obtained a contract to from TMB, and needs

a collaborator to help fulll the agreement. To ensure fulllment of the terms within the

TMB contract, a joint venture agreement with their rst choice, Sakari, must be

successfully negotiated. The negotiation process has broken down due to the

disagreement over numerous issues concerning the development of a joint venture. Theoverall issues for this breaking down of the negotiation process are that they both have

dierent objectives, conicting underlying goals, and cross cultural mis-communication

issues. The disagreements of objectives are based in the areas of equity, technology

transfer, royalty payments, and expatriate issues. The underlying goals of both of the

companies are focused the futures of both companies. Nora hopes to possess the Sakari's

technology, help the development of its country's infrastructure, generate prot, and

becoming player in South East Asian market. Sakari main goal is to move into the Asian

due to market potential growth at the lowest cost possible. Also, both companies have

failed to realize that cultural communication issues are playing a major role in how the

negotiations are being conducted.

26

Individualism is the one side in opposition to its opposite, while collectivism is the extent

to which individuals are incorporated into groups. Malaysia has a much great focus on the

group with a rating of 63 on the Hefstede's matrix in terms of how individualized the

population is. This result would mean that Malaysia is a high context society where

leadership within the group is of extreme important. The case states at one point the top

Malaysian managers did not attend some of the negotiations, namely the very last

meeting before the process broke down. Without top management involved, lower level

Malaysian managers within the negotiation process may have felt weaken by the loss of

their leadership. We nd Finland on the individualist side with a score of 26. Societies such

as Finland's we nd that people are more focused on the development of individualistic

persona and skills. This led to Finnish management team relying less on leadership and

more on the ideas of each other being applied within the negotiation process. The result

of this methodology being applied to the negotiation process led to one of their

employees being sent home and possibly intimidating the leader-less Malaysian

management.

(/services/example-essays/)

From Noras perspective, accepting the terms proposed by Sakari enables it to fulll the

TMB's contract. Furthermore Nora does not have to search for other companies and in

essence start from scratch all over again. However, an obvious disadvantage is that some

terms are not favorable to Nora.

Option 2: Terminating the negotiations
https://www.ukessays.com/services/example-essays/


5/5



Place Your Order TodayTake the next step and invest in your future

PLACE AN ORDER

From Nora's perspective, terminating negotiations would mean starting all over from

scratch. It will take time for it to nd another right partner, to enter into negotiations with

it and to then plan and form a JV with the chosen partner. Time is already running short as

under contract, Nora is obliged to install the digital exchanges in ve years. The lack of

time may also aect the choice of partner Nora makes in the future and that choice may

not be the best one and best suited to the requirements of the company. There is also the

possibility of the worst case scenario coming to pass whereby Nora fails to come to any

agreement with the new chosen partner during the negotiations phase. The choices

available to Nora are not as attractive since the solutions oered by companies other than

Sakario aren't as customized and hence serve not only urban environments but also rural

ones. The solutions oered by companies other than Sakari are apparently not that

adaptable and compatible either.

Request RemovalIf you are the original writer of this essay and no longer wish to have the essay published

on the UK Essays website then please click on the link below to request removal:

REQUEST THE REMOVAL OF THIS ESSAY (/MODALS/CONTENT-ADS/REMOVAL.PHP?TYPE=ESSAY)

More from UK Essays

Marketing Essay Writing Service

Essays

More Marketing Essays

Examples of Our Work

Marketing Dissertation Examples

(https://www.facebook.com/sharer/sharer.php?u=https://www.ukessays.com/essays/marketing/noramarketing-essay.php)(https://plus.google.com/share?url=https://www.ukessays.com/essays/marketingmarketing-essay.php)(https://twitter.com/intent/tweet?text=Nora%20Sakari%20A%20Proposed%20Joint%20Venture%20In%20Malaysia%20Marketing%20Essay&u

sakari-a-proposed-joint-venture-in-malaysia-marketing-essay.php&via=ukessays)(https://m.reddit.comurl=https://www.ukessays.com/essays/marketing/nora-sakari-a-proposed-joint-venture-in-malaysia-market
https://www.ukessays.com/order/?product=1https://www.ukessays.com/order/?product=1https://www.ukessays.com/order/?product=1https://www.ukessays.com/order/?product=1https://www.ukessays.com/order/?product=1https://www.ukessays.com/order/?product=1https://www.ukessays.com/order/?product=1https://www.ukessays.com/order/?product=1https://www.ukessays.com/order/?product=1https://www.ukessays.com/order/?product=1https://www.ukessays.com/order/?product=1https://www.ukessays.com/dissertation/examples/marketing/https://m.reddit.com/submit?url=https://www.ukessays.com/essays/marketing/nora-sakari-a-proposed-joint-venture-in-malaysia-marketing-essay.phphttps://twitter.com/intent/tweet?text=Nora%20Sakari%20A%20Proposed%20Joint%20Venture%20In%20Malaysia%20Marketing%20Essay&url=https://www.ukessays.com/essays/marketing/nora-sakari-a-proposed-joint-venture-in-malaysia-marketing-essay.php&via=ukessayshttps://plus.google.com/share?url=https://www.ukessays.com/essays/marketing/nora-sakari-a-proposed-joint-venture-in-malaysia-marketing-essay.phphttps://www.facebook.com/sharer/sharer.php?u=https://www.ukessays.com/essays/marketing/nora-sakari-a-proposed-joint-venture-in-malaysia-marketing-essay.phphttps://www.ukessays.com/dissertation/examples/marketing/https://www.ukessays.com/services/example-essays/marketing/https://www.ukessays.com/essays/marketing/https://www.ukessays.com/essays/https://www.ukessays.com/services/?subject=marketinghttps://www.ukessays.com/modals/content-ads/removal.php?type=essayhttps://www.ukessays.com/order/?product=1

nora sakari a proposed joint venture in malaysia marketing essay

Documents