Nokia's Strategy in India

            
 
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Case Details:

Case Code : BSTR174
Case Length : 19 Pages
Period : 1998-2005
Organization : Nokia India
Pub Date : 2005
Teaching Note : Available
Countries : India
Industry : Telecom

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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

About Nokia

Nokia was founded in 1865 by Fredrik Idestam in Finland as a paper manufacturing company. In 1920, Finnish Rubber Works became a part of the company, and later on in 1922, Finnish Cable Works joined them. All the three companies were merged in 1967 to form the Nokia Group.

In the late 1970s, Nokia started taking an active interest in the power and electronics businesses and by 1987, consumer electronics became Nokia's major business. Nokia created the NMT mobile phone standard in 1981 and launched the first NMT phone, Mobira Cityman, in 1987. The company delivered the first GSM network to Radkilinia, a Finnish company in 1991, and in 1992, Nokia 1011 - a precursor for all Nokia's current GSM phones - was introduced.

Business Strategy | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies

In the 1990s, Nokia provided GSM services to 90 operators across the world. Another significant move of the company during this period was the divestment of its non-core operations like IT. The company focused on two core businesses - mobile phones and telecommunications networks. Between 1992 and 1996, the company exited from the rubber and cable businesses as well...

Nokia in India

Nokia entered the Indian market in 1994. The first ever GSM call in India was made on a Nokia 2110 mobile phone on its own network in 1995. When Nokia entered India, the telecom policies were not conducive to the growth of the mobile phone industry.

The tariffs levied on importing mobile phones were as high as 27%, usage charges were at Rs.16 per minute and, at these high rates, consumers did not take to mobile phones. Nokia also had to face tough competition from other powerful global players like Motorola, Sony, Siemens and Ericsson...

The Problems

In spite of its strong marketing, Nokia's problems at the global level had an impact on the company's Indian venture. Globally, Nokia had been experiencing tough times with revenues falling to 29 billion euros in 2004 from 32 billion euros in 2001. The company's operating profits decreased from 5 billion euros in 2003 to 4.3 billion euros in 2004...

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