International Business- How Nokia seeks Global business advantage through Spulber’s, (2007) ‘Star Analysis’ and any other relevant theory. Mobile phone giant Nokia, a multinational corporation based in Espoo, Finland and is currently the world’s largest manufacturer boasting a market share of 31% worldwide (www.Nokia.com/Results, 2011). Despite Nokia being regarded amongst the most successful and economically dependent brand within Finland, it was the corporation’s Global strategy that would lead to it becoming a market leader and rapidly gaining worldwide acclaim for its excellence. This essay will include in depth detailing of how Nokia represents Spulber’s (2007) ‘Star analysis’ in their global strategy using newspapers, databases, journal articles, websites and substantiating using my own opinion. With regards to the Star analysis it is my opinion that the five points, home country, supplier country, customer country, partner country and competitor country features are each fundamental in Nokia’s global positioning. Nokia as a multi-national corporation demonstrates its ability to systematically select supplier and manufacturing countries, establish and promote an efficient partnership moving forward, research/market and implement a pricing and demand strategy and utilise its home country features against other competitors. A series of high profile acquisitions, mergers and alliances have enabled Nokia to satisfy consumer demand whilst gaining competitive advantage over rivals, building on existing home country resources. In summary, ‘global business is where strategy meets geography’, (Spulber, 2007, p37). Throughout this text I will seek to demonstrate how Nokia co-ordinates business internationally in order to drive the company foreword. Home Country Features
Nokia began its pursuit for global dominance using success in native Finland as a springboard for international expansion and technological development. After a history of industrial works, Nokia began to turn its attention to the telecommunications sector as early as the 1960’s. However it wasn’t until the early 80’s that the first automatic cellular system was launched, ‘it was the first to allow international roaming, and caught on fast both inside and outside Europe’, (Nokia.com, 2011). Roughly 54% of Nokia’s R&D takes place in Finland, with the company contributed to 1.9% of the nations GDP growth, (Jyrki-Ali-Yrkko, 2001).
Contribution to GDP Finland. (Jyrki-Ali-Yrkko, 2001)
However Finland alone is responsible for just 1% of worldwide sales, despite boasting more than 40% of the total workforce, (CBR Statistics, 2003). Nokia sparked early success in Finland during the 1990’s, which became the catalyst for Global dominance. This was aided by a change in Finnish government to non-socialism, ‘Nokia was able to sustain its competitive advantage in a way it not possible for an investment driven company or market’, (D.Steinblock, 2003). Finland’s integration with the EU also enabled vast strides foreword in the home country allowing for international expansion. Furthermore the countries pro-innovation and competitive technological ethos meant a high number of Finnish operators existed, extending the early use of mobile technology. Nokia’s executive board includes former Finland Prime Minister Esko Aho, with Jorma Ollila continuing as Nokia’s non-executive chairman and is credited with the company’s transition into becoming the world’s largest handset provider. The company’s continuing operations are managed within the guidelines set by the Finnish Companies Act, which promotes Nokia’s continued relationship with brand nationality and governance. Michael Porter (1990) explains how a firm can gain international prosperity through acquiring national competitive advantage using four key attributes shown below.
Based in Finland, Nokia did not reach global domination through the nation’s basic factors of endowment. A...
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