INTRODUCTION
Nokia, one of the leading companies in the telecommunication industry, was founded in 1865 as a pulp mill in Finland. In 1967, Nokia merged with the telecommunications cable corporations, electronics business and Finnish rubber works. The Nordic Mobile telecommunication (NMT) was created in the year 1981 it enlightened customers’ perspective towards the innovative technology. Nokia’s one of the essential innovations is the roaming technology that allows the customers to use the communication channel across the borders. NMT raised the standard of mobile technology and started its operations in other foreign countries.
Finland is an advanced economy country with a history of the Nordic and the East. Due to the company's emergence, they began to form a joint venture and expand its market globally. Therefore, the company consolidated with the Finnish telecommunication system in 1987, through mergers and acquisition. With the emergence and growth, Nokia helped the Finnish economy to flourish and become the largest company in the country. In 2000, Nokia reached the sales of 30.4B Euros and an operating profit of 5.8 billion Euros.
PROBLEM STATEMENT
According to the case, in the era of 1990s, Finland reached the economic crisis, due the collapse of the Soviet Union. Due to economic conditions, the country and the company face many challenges and issues such as the slowdown of the global telecommunication, severe downturn, shortage of skilled labors and unemployment. However, by 2002, the country managed to become one of the competitors in the world, by adopting tight macroeconomic policies and an emphasis on long-term microeconomic policies. The company developed an objective to shift the investment-driven economy into an innovation-driven economy.
The dynamic telecommunications cluster plays an important role in flourishing the country’s economy and especially Nokia that outraged the other telecommunication companies. The biggest competitors of the Nokia are the Blackberry and Motorola that give challenges not only to Nokia, but also to Finland. Due to the economic conditions and competition, the country and the company have to manage effectively to overcome the issues and challenges, to sustain their success and growth.
SWOT ANALYSIS
The case is about strategy and competition, and in order to propose a strategy, it is important to conduct internal and external analysis. The SWOT analysis helps to identify the alternative, drive best possible solution and recommendations.
Strengths
Nokia is one of the leading telecommunication companies with a majority of market share. The strength of the company is its innovative design and product with the consistent and effective use of innovation and creativity. The company emerged as one of the pioneers in the region and created new opportunities. Moreover, Nokia’s main focus on emerging market with big investment in infrastructure and has a broad product line to gain long-term growth. Furthermore, the company offers a wide variety of products and services, with the market share of around 31% in 2000.
Weaknesses
Nokia faced severe loss in the 1980s due to investing in numerous segments of consumer electronics. One of the major weaknesses includes an improper tool to analyze the industry trends and forecasting. Moreover, the weakness includes that the company is not open to licensing, and only 3% of revenue are from Nokia Ventures.
Opportunities
The company should continue to improve its competitive advantage in the mobile industry and capture new segments through constant innovation. Moreover, the company should build its strong presence in the Smartphone market. Furthermore, the company can leverage new markets through strong promotion and better placement strategy.
Finland and Nokia Case Solution
Threats
The major competitors of the company are Blackberry, and Motorola, and the player like iPhone are stealing a market share of the mobile industry. Moreover, the threats include the cost-effective strategy of different companies and consumers’ switching costs.
ALTERNATIVES
Alternative 1: Skilled labors and increase employment rate
Finland’s education is based on quality and internationalization. However, the company faced the challenges of shortage of skilled and qualified labor and unemployment. Therefore, the country needs to raise the level of education and open new universities, to provide the opportunity for the people to gain the education. When the country generates skilled and qualified students, then it will benefit Nokia to hire the qualified candidate and it will automatically raise the employment rate. The country can also provide incentives internship to the students and training for employees........................
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