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Analysis of Nokia

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  1. Introduction
  2. History
    1. Time axis
    2. Analysis
  3. Nokia's strategy from 1970 to 2000
    1. Diversification
    2. Melting phase acquisition
    3. Refocusing
  4. Nokia today : The strategy of innovation
    1. Overview
    2. 2004, the year of questioning ?
    3. 2005 The reaction by innovation
    4. Strategic Analysis
    5. What's next?
  5. Conclusion

Nokia's history began in 1865 in south-western Finland, where the mining engineer Fredrik Idestam founded a forest industry enterprise. In 1966, the companies created by Idestam (Finnish Rubber Works Ltd. and Finnish Cable Works) merged to form Nokia Corporation. In the early 1980s, Nokia strengthened its market position in telecommunications (mobile phones for the army) and consumer electronics by acquiring the companies Mobira, Salora, and the Swedish company Televa Luxor.

Nokia thus became the leader in the field of information technology in Scandinavia, with over 40% market share. In 1987, Nokia bought the consumer electronics industry and part of the activity "components" of Standard Elektrik Lorenz German (SALT), and the French electronics company Oceanic general public. This orientation towards the markets of Western Europe allowed the company to be located on the 3rd step of the podium in the production of color televisions in the late 80s.

In 1988 following the growth of Nokia on the color TV sector, the division "Nokia Consumer Electronics" was created to consolidate and coordinate the activities of the various acquired entities. The ITT-Nokia brand was introduced to the European markets in 1989.
Since the early 90s, Nokia has decided to change its strategy by consolidating its industries in Finland (Finlux factory) due to the declining market share in the television sector. Around 1995, the choice was made to refocus on the heart of its trade, telecommunications, by divesting the assets it held, particularly in the field of information technology.

During the '70s, Nokia was facing two major problems. The first was the first oil shock of 1973 which caused an energy crisis, and the rising cost of raw materials used to manufacture tires. In addition, the Finnish market can offer only limited opportunities for growth. We must therefore turn to a new sector, with real growth potential. For Nokia, it is necessary not only to maintain the competitiveness of traditional activities, but also provide a new source of profitability.

The solution found by Nokia is diversification and the creation of a conglomerate in order to divide the risk and identify growth markets. To do so, Nokia discovered two ways:
The domestic market became too small, and the company had to find new outlets. Thus Nokia decided to settle in Sweden. This choice reflects the cultural and geographical proximity between the two countries. In addition, Sweden has companies which are performing well (master of marketing and expertise in mass production).

To implement this decision, Nokia acquired Salora and Luxor (2 companies in the electronics sector), which allowed it to take a dominant position on the international market.Diversification on the high-tech products market:
At that time, the electronics market was booming. Nokia therefore chose to settle there by the importation and distribution of computers by Honeywell Bull.

Meanwhile, Nokia was developing the activities of recently acquired businesses, namely the production and sale of televisions, and set up a real synergy of production. Finally, Nokia decided to respond to the tender of the Finnish State, to develop a new portable radio. In 1980, Nokia Mobira created a joint venture with Salora to facilitate research.

Tags: Nokia, Fredrik Idestam, Mobira, Salora, information technology, Standard Elektrik Lorenz German, Nokia Consumer Electronics, Honeywell Bull, Finnish market, Finlux factory, real growth potential

[...] Nokia is also on the defensive at the other end of the chain, the terminal side. However, this area gives it nearly two thirds of its revenue. In Asia, the struggle to retain his valuable leadership position is becoming increasingly fierce. Alcatel and Siemens can attest to the difficulty of the market, as they sold their first terminals to Chinese TCL, and the second to the Taiwanese Ben Q. Again, the Nokia has answered through innovation. The Finn has surprised everyone by presenting a recent Mini- tablet running Linux. [...]

[...] The steps of adopted by the FA of Nokia were the following: 1. Salora allowed the company to enter the television market. This company was a partner of Nokia in a joint venture in the segment of mobile phones. Nokia first acquired a minority stake in Salora and Luxor when the opportunity arose, and then acquired a majority share, before buying all the shares thereof The acquisition of Luxor took place at the same time as the acquisition of the majority stake in Salora. [...]

[...] The company has had to backtrack after his last operation Refocusing The late 80s and early 90s marked the advent of Jacques Noels at the head of Nokia Consumer Electronics. The business environment became more problematic, particularly at the level of integration of multiple acquisitions by the group. In addition, financial results were low, turnover was even more striking than in previous years, the management team had been settled since 1990, and tensions arose between them (suspicious death of Kari Kairamo.). [...]

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