Globalization Strategy of Nokia - Контрольная работа

Korea University Graduate School of International Studies Globalization Strategy of Nokia Professor: Dong Ki Kim Course: Global marketing management Prepared by Mykhailova, Karolina (Sogang University Student) ID: I25004 November 8, 2010 Contents Abstract 1. Introduction: Nokia’s background 2. Role of Nokia on the telecommunication market 3. Market Entry Strategy of Nokia 4. Nokia’s Foreign Direct Investment 5. Mergers, Collaborations and Acquisitions by Nokia 6. Foreign Exchange Market Impact over Nokia 7. Culture and Environment Summary References Abstract The mobile phone usage is increasing every day, revolutionizing the field of technology and our lives throughout the world. We all spend a considerable amount of time using our mobile phone for various purposes making it the technical innovation that we use most frequently. Nokia is one of the biggest brands in Telecommunications Industry globally. It enjoys a market share of around 35% at the moment. The Finland based company Nokia caters to GSM as well as CDMA segments. Nokias phones are loved by a lot of people and its name is synonymous with reliability. Nokia has its presence in every segment of the market. It offers the cheapest of phones with the most basic features as well as high-end swanky phones with all the latest features. The purpose of this paper is to briefly look at Nokia’s impact on the international business under the following topics: • Nokia’s market entry strategy: Marketing Mix, Branding, PLC • Foreign Direct Investment • Foreign Exchange Impact over international Trade of Nokia • Culture of Nokia and CSR This will help to understand how Nokia’s way fits in to the theories of International Business and what strategy put it on the top of mobile phone market. 1. Introduction: Nokia’s background Nokia was founded by Fredrik Idestam in 1865 as a wood-pulp mill in south-western Finland. It was later relocated to the town Nokia where the company got its name. The name Nokia is an old Finnish word for a dark, furry animal (such as the sable). (NOKIA, 2009) Finland already commits around 3.4 percent of its GDP (gross domestic product), or 6 billion [euro] (US$8.6 billion), to R&D. That compares with the European average of around 1.8 percent. Around 28 percent of this is paid for by the government, with the lions share--72 percent--being footed by the private sector. Nokia accounts for 45 percent of all industrial R&D in Finland and more than 80 percent of the R&D investment in the telecommunications sector (Blau, 2008). Time marches on and history has proven that standing still means death for any company (Bradford, Duncan, & Tarcy, 2000). Change is inevitable for telecommunication industry and the size doesn’t matter even for a company like NOKIA if it is not adoptive. Based on strategies and events of 2008-09, let’s look at the SWOT analysis of NOKIA. SWOT analysis will help a firm to understand its Strengths, Weaknesses, Opportunities and Threats. Strengths • Long history of flexibility and adoptive to change • Steady revenue growth • Brand power • Strong financial position • Flexible Capital Structure • Investment in research and development of technology • Reached low operating costs in 2009 • Consumer retention rate of 55% • Product innovation bundled with value added services mainly focusing on maps, music, messaging, media and games. • Successful mergers, acquisitions and collaborations Weaknesses • Reduced staff strengths to achieve low costs. • Declining profitability ratio due to current economic conditions • Decline in the converged device share (by 32% in 2008 despite the shipment of over 60 million units).