This case is about Nora, one of the leading suppliers of telecom solutions in Malaysia. The case involves a possible joint venture with Sakari, the leading manufacturer in Finland of mobile phones and telecom systems. There is a large potential in the future development of telecom facilities in Malaysia and the to enterprises have discussed a joint venture
Nora is a leading supplier of telecommunication services in Malaysia. They are looking for a Joint Venture to manufacture and commission digital switching exchanges to meet the needs of the telecomm industry in Malaysia. They are interested in securing a share of RM 2 Billion contract from TMB with the help of the Joint Venture.
Joint Venture Options
Nora’s JV options are Alcatel, NEC, Ericsson, Siemens, AT&T. But for many reasons the JV will not work with these companies. Some of the reasons are:
• Technical standards are not compatible
• Obsolete technologies being supplied
About Sakari Sakari’s current strategy was to emphasize global operations in production and R&D. It planned to set up R&D centres in leading markets including South-East Asia. However it did not have a wide marketing operation and relied on Joint ventures for the same. Sakari has its own reasons for the joint venture which range from its declining sales to its need to venture into newer markets. Sakari’s declining sales were attributed to two main factors: weak demand for Sakari’s consumer electronic products, and trade with Soviet Union came to a standstill. Hence for future survival they needed to expand the company overseas and the Asian region, due to huge population, provides good growth opportunities.
Nora-Sakari a goof fit?
Sakari’s SK33 switching system is the basis for the joint venture as the SK33 technology is a new and better technology than the one present with Nora. The SK33 switching system is based on open architecture. It also enables the use of standard