Nokia Case
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
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
Bibliography: International Management: Managing Across Borders and Cultures, Text and Cases (7th Edition) Helen Deresky