Nokia's Chinese Operations
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Case Details:
Case Code : OPER070
Case Length : 21 Pages
Period : 2000-2008
Organization : Nokia Corporation
Pub Date : 2009
Teaching Note :Not Available
Countries : China
Industry : Mobile phones
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Background Note
Nokia was founded in 1865 by Fredrik Idestam (Idestam), a mining engineer, in Finland when he built a wood pulp mill. In 1871, Idestam named his company Nokia Ab after the Nokianvirta River, where the second wood pulp mill was located...
Nokia in China
Way back in the 1930s, when Nokia had been involved in the forest industry, it had exported its products to China. Again in the mid-1980s, Nokia entered the Chinese telecommunications market just after the country had started accepting Foreign Direct Investment...
Nokia Reformulates its Strategies in China
During the early 2000s, Nokia failed to gauge the growing demand for clamshell phones, color displays, phones with cameras, etc. Asian manufacturers like LG and Samsung were quick to respond to the demand and they came out with several new models. The Chinese manufacturers were not far behind, and they also introduced new model phones at better prices. These had adverse repercussions for the company's market share...
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Results
By April 2005, Nokia had become the market leader in Chinese handset market, according to Gartner , with a market share of 19.7% , followed by Motorola with a share of 12.1%, and Samsung at 11.9%. The share of the Chinese manufacturers fell, with Ningbo Bird's share at 8.6% and that of TCL at 7.2%...
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Looking Ahead
Some analysts were of the view that selling low-end phones as Nokia was doing in China, might not have a healthy impact on the bottomline of the company. But others were of the view that within a short span of time, users who had bought the low-end phones might upgrade to better phones, and for Nokia, the opportunity was in targeting these customers, by building brand loyalty...
Exhibits
Exhibit I: Mobile Phones in China
Exhibit II: Nokia Joint Ventures in China
Exhibit III: About TD-SCDMA
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