business ethics
Nokia rises to the challenge of the changing mobile phones market.
Finland’s best known company has long been a global leader in the mobile phones market. Perhaps improbably, from its beginnings as a paper mill in 1865, this nowvenerable company whose culture and management remain rooted in Finnish values, has become one of the most resilient, globalized MNEs in an era dominated by globalization of markets. Indeed, the company attributes its staying power in markets largely to Finnish values of courage and tenacity. But it will take more than perseverance to maintain market leadership in today’s mobile phone markets.
Stagnation in the handset market generally, in which Nokia has long been dominant, has presented a mammoth challenge, and it has encountered stiff challenges in the smartphone market, which is the only subsector that saw healthy growth in 2009. In smartphones, Nokia has fallen behind in technology, its Symbian operating system now showing its age. However, the fight-back has long been a Nokia speciality.
In the 1990s, it was caught unprepared as new ‘clamshell’ handsets were launched by rivals, but soon recovered market leadership with new products. Its ability to respond rested in large part on its ability to exploit economies of scale and its efficient supply chains, which can produce 1.2 million handsets a day. Its production has shifted to lowcost locations, but it has excelled in the planning and logistics necessary to maintain efficient operations. Its design teams have contributed hugely to the company’s success, designing phones for all possible types of customer worldwide.
But it must stretch beyond its core strengths in handset design and production to meet the challenges in the smartphone market, in which, because the devices are computerlike, software and services are becoming crucial. Apple’s iPhone and the Blackberry, made by Research in Motion, which are dominant in the American market, have shown impressive growth.
Finland’s best known company has long been a global leader in the mobile phones market. Perhaps improbably, from its beginnings as a paper mill in 1865, this nowvenerable company whose culture and management remain rooted in Finnish values, has become one of the most resilient, globalized MNEs in an era dominated by globalization of markets. Indeed, the company attributes its staying power in markets largely to Finnish values of courage and tenacity. But it will take more than perseverance to maintain market leadership in today’s mobile phone markets.
Stagnation in the handset market generally, in which Nokia has long been dominant, has presented a mammoth challenge, and it has encountered stiff challenges in the smartphone market, which is the only subsector that saw healthy growth in 2009. In smartphones, Nokia has fallen behind in technology, its Symbian operating system now showing its age. However, the fight-back has long been a Nokia speciality.
In the 1990s, it was caught unprepared as new ‘clamshell’ handsets were launched by rivals, but soon recovered market leadership with new products. Its ability to respond rested in large part on its ability to exploit economies of scale and its efficient supply chains, which can produce 1.2 million handsets a day. Its production has shifted to lowcost locations, but it has excelled in the planning and logistics necessary to maintain efficient operations. Its design teams have contributed hugely to the company’s success, designing phones for all possible types of customer worldwide.
But it must stretch beyond its core strengths in handset design and production to meet the challenges in the smartphone market, in which, because the devices are computerlike, software and services are becoming crucial. Apple’s iPhone and the Blackberry, made by Research in Motion, which are dominant in the American market, have shown impressive growth.