Finland & nokia


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Finland & nokia

  1. 1. Finland and Nokia CASE ANALYSIS
  2. 2. Group Members Abaid Ullah Ammara Atta Anam Farooq Fahad Butt Hassan Zulqarnain Case: Finland & Nokia
  3. 3. Presentation Plan Case Summary Anam Farooq Issues & Problems Anam Farooq Case Analysis  Finland Ammara Atta  Nokia Fahad Butt Nokia at Corporate level Fahad Butt Nokia at Global level Hassan Zulqarnain Finland & Nokia 2001-2010 Abaid Ullah Case: Finland & Nokia
  4. 4. 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. Case: Finland & Nokia Anam
  5. 5. 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. Case: Finland & Nokia Anam
  6. 6. 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. Case: Finland & Nokia Anam
  7. 7. Case Analysis FINLANDCase: Finland & Nokia Ammara
  8. 8. 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. Case: Finland & Nokia Ammara
  9. 9. 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. Case: Finland & Nokia Ammara
  10. 10. 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) Case: Finland & Nokia Ammara
  11. 11. 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. Case: Finland & Nokia Ammara
  12. 12. Telecom Sector In 2001, over 200 million mobile phones were sold worldwide. Telecom industry was divided into two parts:  Mobile communication infrastructure  Mobile handsets Case: Finland & Nokia Ammara
  13. 13. SWOTSTRENGTHS WEAKNESSES Early adopters of mobile phones Unskilled employees and scientists Leader in mobile penetration Difficulties in relation to attractiveness; small domestic High involvement of government in leading companies market area, limited number of inhabitants, a small A high literacy rate language area Problems with venture capital (amount, availability, matching of demand and supply)OPPORTUNITIES THREATS Going beyond EU, looking for best competence globally Intense competition Open minded and sufficient support for creativity and Unemployment (2001) innovation Decreasing sales Case: Finland & Nokia Ammara
  14. 14. 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. Case: Finland & Nokia Ammara
  15. 15. 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%. Case: Finland & Nokia Ammara
  16. 16. Case Analysis NOKIACase: Finland & Nokia Fahad
  17. 17. 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. Case: Finland & Nokia Fahad
  18. 18. Operating system focus1. Flexibility (Innovation)2. Quality (Nokia 2100 was Nokia’s first consumer targeted model and was sold mainly due to high quality)3. Delivery speed4. Service5. Cost Case: Finland & Nokia Fahad
  19. 19. SWOT Strengths Weakness Innovation Market leader Increasing sales Could not create monopoly as government Acquisitions and JVs for new technology forbade doing so. Backward integration Captured markets of different standards Opportunities Threats Motorola’s first mover advantage in mobile infrastructure and analog phones’ Emerging telecommunication sector in third Joint venture of Sony and Ericsson world countries Downturn in telecommunication sectorCase: Finland & Nokia Fahad
  20. 20. Porter’s Five Forces Model Bargaining Low as customers have no/less power of other option to compare with customers High because High as overall related industry Intensive because technology was Threats ofThreats of competitors were of many local and changing and shifting towards global digital standards substitutesnew telecommunicatio n competitors. were emerging (TDMA, CDMA)entrants Low as large number of Bargaining contract manufacturers power of dependent upon Nokia SuppliersCase: Finland & Nokia Fahad
  21. 21. BCG MatrixCase: Finland & Nokia Fahad
  22. 22. Nokia at Corporate LevelCase: Finland & Nokia Fahad
  23. 23. 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 Case: Finland & Nokia Fahad
  24. 24. 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. Case: Finland & Nokia Fahad
  25. 25. 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. Case: Finland & Nokia Fahad
  26. 26. 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) Case: Finland & Nokia Fahad
  27. 27. Big picture of overall growthIn 2001: Nokia networks: (Multiple setups) 5 plants in Finland 5 in China 1 in Malaysia. Nokia Mobile Phones had production units in eight countries. Case: Finland & Nokia Fahad
  28. 28. Nokia at Global LevelCase: Finland & Nokia Hassan
  29. 29. Cont... Size of Organization Manufacturing facilities World leader in Digital Phones Technology Case: Finland & Nokia Hassan
  30. 30.  Brand recognition Market channels Adaptability Industry structure Competitive advantage
  31. 31. OLICase: Finland & Nokia Hassan
  32. 32. Porter’s Diamond modelCase: Finland & Nokia Hassan
  33. 33. 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. Case: Finland & Nokia Hassan
  34. 34. Finland 2001-2010Case: Finland & Nokia Abaid
  35. 35. 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. Case: Finland & Nokia Abaid
  36. 36. 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. Case: Finland & Nokia Abaid
  37. 37. Nokia 2001-2010Case: Finland & Nokia Abaid
  38. 38. Cont... 2002: Nokia Networks, and Redback Networks Inc. announced strategic agreement to increase broadband solution. 2003: Nokia built Eizels 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 Case: Finland & Nokia Abaid
  39. 39. 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. Case: Finland & Nokia Abaid
  40. 40. 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. Case: Finland & Nokia Abaid
  41. 41. 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. Case: Finland & Nokia Abaid
  42. 42. Thank You