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Vertu

In: Business and Management
Vertu

Unit 2 Vertu Case Study Analysis

Kaplan University

School of Business

MT460 Management Policy and Strategy

Author:

Professor: Dr. Dennis Strouble

Date: September 30, 2014

Vertu: Nokia’s Luxury Mobile Phone for the Urban Rich Case Study

Introduction

Finland-headquartered Nokia was a global telecommunications equipment manufacturer that also operated a luxury mobile phone brand called Vertu. Vertu was founded by Frank Nuovo by using precious materials, fine jewels and exotic leathers (Kwong & Wong, 2011). Vertu was unique, luxurious and one of a kind, for a moment in time.

Synopsis of the Situation

Nokia has been one of if not the leader in the telecommunication equipment industry for a long time. Under the new management of Stephen Elop, he allowed Nokia’s chief designer, Frank Nuovo design and run at arm’s length in England the creation of the never-seen before luxury phone called Vertu. With the birth of the Vertu phone, it showed growth in 70 countries selling mobile phones (Kwong & Wong, 2011).

Things would not stay golden forever though.

Key Issues

After years of being that one-of-a-kind luxury mobile phone competitors began wanting in on the niche but profitable market. Technology was also growing faster than Vertu phone were keeping up with. With this revenues began to fall. Elop made the executive decision to partner with Microsoft windows to adopt their operating system since Nokia’s was OP becoming obsolete.

Define the Problem

Elop’s strategy to partner with Microsoft in order to convert over to Windows OP system failed due to the a .14 cent drop in Nokia’s share prices the day of the closing on the partnership. Does Nokia keep Vertu at arm’s length or pull it in closer to manufacturing in Finland?

Alternative Solutions

One



References: Kwong-Kay Wong, K. (2011, September 28). Vertu: Nokia’s luxury mobile phone for the urban rich. (report No. W11208). Watertown, MA: Harvard Business Publishing. | 1. Technology has not kept up with the competitors 2. High production cost and lower functional benefits 3. Due to Vertu’s unique brand positioning, did not have any joint promotion with wireless carriers (Kwong & Wong, 2011). |

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