Nokia Case

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What are the trends in the mobile handset industry? What is Nokia’s strategy and how has globalization changed its way of operation? Trends:

· Demand for phones in US and Europe are decreasing

· High demand for cheaper phone models in Middle East, Southeast Asia, Africa, China, India

o Low-cost handsets=reduced Average Selling Price

o Growing market for $25 and $10 phones

· Companies moving manufacturing plants to low-cost Asian countries

* Rising cost levels
* declining prices
* higher competition

Nokia’s strategy and globalization:

· Maintain large market share and economies of scale

o Strong brand, supply chain efficiency, dominant position in emerging markets, understand consumer needs and provide phones that satisfy needs (phones less than $50 to advanced phones w/ satellite navigation and email

· Shift production to low-cost locations. Have certain locations supply specific markets

o Finland, Germany, Hungary plants supply Europe, Middle East, Africa

o Brazil and Mexico plants supply North and South America

o China, India, S. Korea plants supply China and Asia-Pacific

increased competition due to globalization, people can sell anywhere

take advantage of a country’ resources (cheap labour, human intellect, lower taxes etc.)

take advantage of a country’s less strict labour laws (ex. child labour)


Was the German backlash against Nokia justifiedadd your own opinion? How can nations make themselves more competitive?

· New plant developed would be to maximize output in production to Europe, Middle East and Africa

· Other manufacturers (ex. BenQ [bankrupt], Motorola) dismantled their operations for competitive advantage

o Competitors who outsource will potentially destroy the company in the future, if no measures were taken even the giant profitable companies will suffer in the long-run...
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