Nokia Connecting People - International Trade and Business Environment 300

Marcus Calhoun

December 11, 2011

Dr. Chatterjee

International Trade and Business Environment 300

Introduction

Nokia is a multinational communications and information technology firm, which is based in Finland. This firm is able to profit off an essential human need, this need is connection. Connection is important and with being the world’s largest manufacturer of mobile phones and other social tools Nokia is able to profit off this fundamental need. Nokia employs thousands of people and serves consumers in 130 countries.

Nokia began in 1865 as a conglomeration of paper mills and would manufacture a very wide range of goods. The firm was named after the river Nokianvirta, where the original mill was based. Nokia eventually moved to the mobile phone sector and was the world’s largest vendor of mobile phones from 1998 to 2012. However, Nokia could no longer compete in that market due to touchscreen smart phone vendors. Seeing their market share decrease rapidly over five years Nokia decided to sell. Microsoft on 2 September 2013, bought the mobile phone business from Nokia and incorporated it into their communications sector.

Current Revenues

Nokia has seen very sporadic revenue streams through the 2000’s. Nokia hit their peak in 2008 with 69,477,800,00 revenue in sales when the firm started entering new markets. However, with the new boom of smartphone technology around the world Nokia profits started going down. In the past three years there has been a sharp down turn in their revenue streams. After their financial recovery in 2010 making a 56,720,600,000 revenue stream in sales the firm saw a huge loss. The firm went from 56,720,600,000 in 2010 to 40,324,200,000 in 2013, the loss was substantial and required Nokia to implement new business strategies.

How many countries they are in

Nokia serves consumers in 130 countries especially in developing countries. Nokia built its empire on entering emerging markets serving a wide consumer base. Nokia was so successful in these countries because they adapted their product to each developing country tailoring the technology accordingly.

Expansion of product/service lines

Nokia used to be the world’s largest manufacture of mobile phones. In correlation with this Nokia had a continually evolving product line. The Nokia product line consists of a number and alphabet series. The number series range from 1000-9000 that are based on complexity and function of the phone. On the other end of the spectrum the alphabet series consistent of their smartphone and specialized phones. For example, the Nokia Xseries was meant for a young audience focused on music and entertainment. The evolution of their product line expansion introduces lots of product in a short time and emphasizes aesthetic design, user interface and software features (Schrempf).

Expanding the product in this way comes with many advantages for the firm. For example, this product expansion Effectively covers various price segments while maintaining lower development cost, improves efficiency to further development and manufacturing of products within each series, and changes competition to a global level (Schrempf). However, even though the product expansion took on a unique strategy there were some pitfalls that needed to be overcome. Nokia products were not being properly adapted to their customers, and there was a problem between the product and its consumer. Also, there were just too many products because the wide product portfolio results in customers being thinly scattered across each product line (Schrempf).

Along with their developing product line they had to decrease some of these operations when they had to sell certain service lines. Nokia has three service lines mobile phones, solutions, and markets. Mobile Solutions is responsible for Nokia's portfolio of smartphones and mobile computers, including the more expensive multimedia and enterprise-class devices (Aspara). Mobile solutions recently has taken a hit since they sold out their mobile phone service line to Microsoft. Finally their market service line involves Nokia's supply chains, sales channels, brand and marketing functions of the company, and is responsible for delivering mobile solutions and mobile phones to the market (Radjou).

Core competencies

Through their service Nokia has developed core competencies that other companies have trouble competing with. Some of Nokia’s core competencies have been over looked, however some of these competencies account for most of the revenue generated by the firm. These competencies include locations, commerce and mobile devices. Nokia’s number one core competency is locations and commerce. Created in 2007 it has made them global leaders in mapping and location based technology. In fact, Nokia currently manufactures navigation systems inside 4 out of every 5 cars equipped with in-dash navigation (Aspara). In addition to the commerce solutions, Nokia is using their 25 years of experience in mapping and extensive infrastructure to differentiate their smart phones through superior location services (Aspara). Nokia also recently launched a Mapping app on iOS in response to consumer dissatisfaction