1- What did Nokia perform right?
Concerning R&D, Nokia took advantage of the efficiency of worldwide manufacturing and produced globally volume to minimize high costs. In the 1970s, The company maintained research and development (R&D) investments of close to 4% of net sales through most of the 10 years, it possibly reached 7% of it is net sales from the electric sector (¬210 million) inside the 1980’s. Nokia also got very wise R&D assets: channelled in a number of key areas where Nokia knew it could possibly create a competitive edge.
For example in 1992, Nokia launched the first mass-produced digital phone, Nokia 1011, for GSM. Nokia was a visionary company. They were the first to understand that design was essential in this business and to segment their product line. In the 1990s, Nokia’s competitors began to outsource manufacturing, while Nokia continued to produce its handsets internally. Nokia protected its technological developments and handset features by continuing to aggressively file patents.
Focusing on customer requirements is also one of the key points that allowed Nokia to maintain its competitive edge ( Nokia 9000 Communicator in 1996 : a GSM phone with fax, e-mail, short message service, address-book, calendar and Internet connections. It created an entirely new category of digital all-in-one communications device) HR :
In 1997, Nokia employed more than 36,000 people from all nationalities, ethnic groups, ages, sexes and backgrounds. Nokia continues to cherish this diversity and views it as a core strength in helping to generate a variety of local and global solutions. Nokia managed to create a shared vision of how the organisation can become the global leader in telecommunications. By empowering its employees, Nokia has created a workforce that fights to win rather than sitting back and letting others do the work. Nokia sees itselfas a learning organisation, it does not rest on its existing strengths but seeks to add to them and encourages employees to take on more responsibilities and acquire new knowledge and skills. The company has created a set of values which enables the organisation to adapt to the rapidly changing environment of telecommunications : customer satisfaction, respect of the individual, achievement, continious learning. Network and telephones :
For decades Nokia led the telecommunications industry in handsets and networking. They provided the first wireless phones in Scandinavia for government services. It supplied networking and infrastructures. In 1987, they launched the first mobile phone. Nokia was influential in establishing the second generation network (or “2G) and the European digital network Global System for Mobile (GSM), which came to replace the dozens of incompatible analog network systems and allowed phones to work throughout Europe. Nokia identified the opportunity for digital developments before anyone else, introducing its first digital transmissions systems in 1969. Nokia was able to deliver the first GSM network in 1991
Nokia also had a head start on competitors because the Finnish telecom infrastructure sector had been deregulated sooner than those in most European countries. Nokia’s networking unit negotiated deals to install GSM infrastructure for 17 operators : they were the only company in the world selling phones that work in every major cellular standard.
Emerging and new markets :
Nokia soon learned what it would need to succeed in a global telecommunications industry : whereas in some industries organisations focus upon domestic markets within limited geographical boundaries, Nokia made a key decision in 1991 to increase its global marketing. This was a critical decision, which set a pathway for the whole organisation, so that Nokia was prepared when the cellular boom hit world markets. The development of global strategies offered Nokia the ability to respond and meet customer needs quickly as they developed, with the added benefits of cost reduction, improved quality and competitive leverage.
Nokia exported wireless telecom networking terminals from four Nordic countries in 1982 to over 20 countries throughout Europe, the U.K., North America, and Asia in 1987. By late 1992, Nokia exported handsets (most of which were still analog) to 70 countries, 56 expanding its reach to Latin America, Russia, Australia, and Eastern Europe. In 2003, Nokia introduced two handsets, the Nokia 1100 and 2300, tailored to emerging markets with voice and SMS capabilities and longer battery life, useful in regions with unreliable power. That shows how Nokia tries to fit local requirements : it is a glocal strategy Acquisitions :
Nokia ventured beyond Finland to make its first international acquisition, Swedish consumer electronics company Luxor Ab.Nokia’s mergers and acquisitions activities consistently boosted revenues while also adding valuable patents in printed circuits and connectors, fiber optics, and digital computers, among others, to its growing portfolio.
In the 1990s, Nokia implemented vertical integration for mobile phone, it was preoccupied by reactivity and costs. Because of the crisis and deregulation which implied many changes, Nokia divested its data, forestry, and chemicals businesses, and centered the company on four key business areas : mobile telephones, consumer electronics, networks, and cables “>telecommunications (networking equipment) and mobile phones the focal points of Nokia’sstrategy. It made a joint venture with Siemens and Symbian in 2006. “>Nokia invested in each straight of the handset ecosystem” manufacturing, distribution, and design R&D. Value and brand image:
Nokia was upon of the first to build a brand identity. Ollila implemented “The Nokia Method, highlighting Nokia’s primary values of customer satisfaction, esteem for the person, achievement, and continuous learning. It reinforced the image of the trademark. Today, in spite of the Ms merger, Nokia benefit from a solid brand galaxy.
2- What did Nokia do wrong, the choices that caused the downfall from the firm? Technology
During its period of progress (under Kairamo) Nokia invested a lot in R&D and diversified the activities a whole lot. Then facing a slowdown at the instigation of Vuorilehto, it divested most of its non-core units to be able to focus their ressources on the mobile phones, sites and cabling markets. Eventually they obtained a huge head start on the rivals (also thanks to the early deregulation from the market in Finnland) therefore, as is actually said inside the document: “Nokia was influential in building the second technology network (or “2G), the European digital network Global System for Mobile (GSM), a which will came to change the many incompatible analog network systems and allowed phones to work during Europe.
This digital network provided them an excellent cost benefits and allowed them to spread their affect across the world (except in the US. ) But Nokia couldn’t reiterate that success when the turn of the smartphone took place, their software development was going to weak and they lost big market share in developed countries.
Vertical as well as Horizontal the usage and diversification
In its beginnings, Nokia had a high diversification as it was present in a lot of areas together five core businesses: rubberized, cable, forestry, electronics and power generation. But then along the differentrestructuration mainly because it decided to perform everything in one facility and expert the whole production scheme, we are able to say it had a high top to bottom integration. Since it is said page 6: “Nokia invested in each vertical of the handset ecosystem ” manufacturing, distribution and design R&D. During it is acquisition stage of the 80’s it acquired a lot of similar companies in order to grow bigger and minimize competition: it had been a side to side integration stage. But as the market got more complex and the technology evolved, Nokia had to use outsourcing for some of the operation to be able to focus on their competitive advantage: manufacturing impressive and quality phones. Consequently less top to bottom integration. Geographic scope
In its beginnings, Nokia was uniquely selling in to the Finnish market. But in 1983 it produced its initial international acquisition with the Swedish company Luxor Ab, because Nokia’s CEO Kairamo believed it had to “expand in the world market to survive. Regardless if its heir Vuorilehto didn’t share his point of view, Nokia expanded in Europe and remained healthier thanks to that, even when the Finnish economic system was battling. Then it been successful in identifying regions with all the most potential growth and spread throughout the world: Australia, Fresh Zealand and above all Asia. Nokia’s strategy was to focus on emerging as well as less competitive markets with increased basic telephones such as Africa or Middle East Asia (exhibits almost eight and 10). But it was harder for Nokia to keep or acquire marketplace shares in more developed countries where the smart phone had become the typical. Indeed it never come to the USA industry and had to leave japan one in 2011. Nokia had a flexibility way in its expansion: it tailored its execute and its products to the neighborhood market differences. Nokia spent a lot of money to adapt their marketing campaigns and its offer to local marketplaces, and this worked. On the production area, in order to get nearer to its buyers and take care of growth, that opened making facilities in USA, Germany, Hong Kong, China, and Southern region Korea.