Case Study Analysis: Finland and Nokia: Creating the Worlds Most Competitive Economy Analysis: Nokias history

begins in 1865 as a pulp mill in the country of Finland. In 1967 the modern corporation of Nokia was merged with a telecommunications cable corporation and electronics business and Finnish Rubber Works. This became the telecomm company that we know today. In Finland the Nordic Mobile Telephone (NMT) network was created in 1981 and brought several innovative aspects to the consumers. The NMT pioneered roaming technology that allowed for usage across country borders. The creation of the NMT caused the Nordic region, once a subtle region, to become the largest single mobile market of the time. This network raised the standard of mobile technology and began to be incorporated in other foreign markets. In 1979 Nokia began forming joint ventures and acquiring other companies, expanding its market and in turn becoming the largest consumer electronic company in the Nordic region during the 1980s. Nokia then consolidated the Finnish telecommunications system in 1987, through mergers and acquisitions. In 1999, the telecommunications sector became Finlands leading sector, making up 21% of the value added. By 2001 Nokia was in the top three competitors in mobile phone manufactures internationally, reaching sales of 30.4B Euros. The company employed over 60,000 people and production locations in 10 countries, R&D in 15 countries as well as sales in over 130 countries. Assessment: Strengths: Nokias innovative presence allowed it to be a market leader in mobile phones. By providing the best coverage and largest selection of models Nokia became the world leader in digital phones with a market share of 31% in 2000. Nokia consistently searched for ways to improve their product by setting up R&D facilities by leading universities and developing centers of excellence. Nokia developed the fundamental values known as the Nokia Way. These four values tied into the Finnish national character and consisted of customer satisfaction, respect for the individual, achievement, and continuous learning. The Nokia Way proved to be successful as Nokia tapped into other countries. The companys character was pragmatic, honest, quiet, and serious. Weaknesses: Beginning in the 80s Nokia began to invest in electronics such as TV manufacturing and suffered a severe loss. The financial blow couldve been prevented if the company had done a better analysis of the situation prior to acquiring several of the electronic companies. Also, in 2001 Nokia was having trouble keeping up with new industry standards surrounding the development of software for PDA and palm pilot organizers. Also, due to the size of the company, Nokia was enduring the concerns of nation for being such a large role and cluster in Finlands economy. Opportunities: Being a strong player in the logistics of mobile devices, Nokia has the opportunity to increase their products functions and further develop their Smart phone idea. Based on their worldwide reach the company should be able to continue with their intricate supply chain and continue to market products worldwide. Also, since consumers are changing to a wireless world the telecomm market should still be growing steadily with room for innovation and improvement. Threats: The recent emergence of the I-phone and redesigned models of the Blackberry seem to be stealing the market in the U.S. Nokia will need to unveil a product that is

comparable to these devices and invest in an ad campaign that will convince the consumers that the product is not only a smart phone but also a fashion trend. Recommendations: Although Nokia has seen success within the last several decades the effects of outsourcing production to other countries is taking a toll on Finland. Since Nokia is crucial to Finlands economy it may be necessary to restructure certain areas to allow for there to be jobs available within the nation. A Nokia University could be implemented similar to Hamburger University fro McDonalds Corp which trains and educates individuals to become managers and employees. Also, Nokia will need to address the issue in the recent growth of the Blackberry and IPhone smart phones. These two products have begun to dominate the market in the smart phone category that was once Nokias focus. Currently, a product has not been presented by the company to match the capabilities and functions of these two different phones.