Nokia Case Study

Nokia Business Interests vs. German Pressure

1. What are the trends in the mobile handset Industry? What is Nokia’s strategy and how has globalization changed its way of operation?

The major trends in the mobile hand set industry according to www.strandreports.com are the treat and possibilities of the Discount Mobile Service Providers, falling profit margins on basic mobile services as a result of competition, the use of outsourcing, controlled investments in infrastructure, and higher marketing expenses partly because of the use of micro segmentation. Nokia’s strategies are the strength of its brand, supply chain efficiency, and its dominant position in emerging markets. Globalization has changed Nokia’s way of operations by trying to find country’s where they can pay its workers less, and in the long run make more profits.

2. Was the German Backlash against Nokia justified? How can nations make themselves more competitive?

In my opinion I believe that the German backlash against Nokia was justified. This is due to the fact that Nokia didn’t repay the 41 million Euros ($63 million) in subsidies it had been given for locating its closed mobile phone plant in Bochum to Romania. Also I feel that it was unjust that Nokia closed the plant in Bochum because it was highly profitable, and the German workforce is far more skilled, well educated, productive, and is one of the world’s highest wage and benefits earners. Nations can make themselves more competitive by increasing their education systems in the country, and also by increasing their trade and communications with other countries.

3. What, if any, were the flaws in Nokia’s approach to announcing and handling its plant closure? What can the company do now for damage control?

Nokia’s main flaw in its approach to announcing and handling its plant closure in my opinion was that they had no clear explanation of why such a profitable company needed to close a productive factory. What Nokia can do now is apologize to all the people that they put out of work, and repay the 41 million Euros ($63 million) in subsidies it had been given to the German workers that deserve it.

4. What did I learn from this case study?

From this case study I learned that Nokia is the largest mobile handset maker in the world with a 40% market share. Nokia also produces four out of every 10 mobile phones sold worldwide and is well ahead of it competition on the strength of its brand, supply chain efficiency, a dominant position in emerging markets, understanding consumer needs and providing phones ranging from less than $50 to advance services featuring satellite navigation and email. Also that business is business and Nokia found a more profitable location for its factory in Romania even though the German factory was extremely profitable, and it never suffered a loss. Nokia put a lot of people out of jobs due to the closing of the German factory, they saw that the factory only made sense in the short term, and Nokia as a global competitor needs to focus on the long term goals to stay ahead of it competition.

References

http://www.strandreports.com/sw1942.asp

Deresky, Helen (2011) International Management, Managing Across Borders and Cultures (7th ed.)

References: http://www.strandreports.com/sw1942.asp Deresky, Helen (2011) International Management, Managing Across Borders and Cultures (7th ed.)