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									THE WORLD’S FASTEST MOVING COMPANY
From Paper and Wellingtons to                                        How Can a Business Grow?                                                           Acquisition and Joint Venture
Mobile Phones                                                        When a business is
                                                                                                                     Existing	Products   New	Products
                                                                                                                                         A business cannot grow without




                                                                                                  Existing	Markets
                                                                     attempting to grow, some                                            additional resources. When the
The	original	Nokia	Company	was	founded	in	1865	to	                   very important strategic                                            business uses its profit to
produce paper from wood pulp. In 1967, three                         decisions must be made.                                             purchase the resources, this is
companies,	 Nokia,	 Finnish	 Rubber	 Works	 and	                     A tool that is used for                                             called internal or organic growth.
Finnish Cable Works in Finland merged to form the                    making such decisions is                                            Alternatively, the business can




                                                                                                  New	Markets
Nokia Corporation. The new company operated in                       the product/market matrix.                                          purchase another business
                                                                     The matrix shows four                                               which gives them quick access
many sectors and produced a wide range of                                                                                                                                     The	Nokia	N97
                                                                     possible approaches:                                                to new products and markets.
products including paper, tyres, Wellington boots,                                                                                       Another way of doing this is to
cables, televisions, computers, electrical generators               •	   Existing	 products	 can	 be	 sold	 to	 customers	 in	 existing	                                                                         Nokia Corporation is a multinational company and is the
                                                                                                                                         arrange a merger or joint venture with another company. This is
                                                                         markets. This is called market penetration. The effect is to                                                                            world’s largest manufacturer of mobile telephones with
and chemicals.                                                           increase the company’s market share.
                                                                                                                                         called external or inorganic	 growth.	 Nokia	 have	 made	 many	
                                                                                                                                                                                                                 nearly 40% of the market. The company is headquartered
                                                                                                                                         important	acquisitions	such	as	Navteq,	a	major	digital mapping
How did this company become the                                     •	   Existing	products	can	be	sold	to	new	markets.	This	is	called	 company	and	Loudeye,	an	online music distributor. They also               in	Finland	and	is	listed	on	the	Helsinki,	Frankfurt,	and	New	
world’s largest manufacturer of                                          market development. This approach implies that the acquired Twango, a media sharing service that allows people to                       York	stock	exchanges.
mobile phones with nearly 40% of                                         company is attempting to sell to additional market share	photos,	videos	and	personal	files.                                             Nokia	employs	some	60,000	employees	in	120	countries.	
global market share?	Clearly	Nokia	                                      segments.                                                                                                                               Current revenues total around €50 billion per annum.
were very capable of spotting the                                   •	   New	products	can	be	developed	for	existing	markets.	This	is	 How Can We Reposition?
many opportunities created by                                                                                                                                                                                    The Nokia Research Centre is the company’s research
                                                                         known as product development and is critical for companies The mobile phone market is now considered to be saturated.
technological change and of                                                                                                                                                                                      unit. Some 500 researchers, engineers and scientists work
                                                                         in competitive markets.                                           The mobile phone has become a commodity.	 Everybody	 has	
developing the right products to                                                                                                                                                                                 at locations in seven countries: Finland, China, India,
                                                                     •	 New	products	 can	be	developed	and	sold	to	new	markets,	 one	and	the	market	is	highly	competitive.	Nokia	cannot	rely	on	                 Kenya, Switzerland, the United Kingdom and the United
take advantage of these. The
                                                                         an approach known as diversification.                             mobile phone sales for its future. Accordingly, the company is        States. The company also owns the Nokia Institute of
company’s strategic skills are still
very evident today. In this case study we look at the strategic       Nokia	 has	 used	 all	 these	 channels	 in	 order	 to	 drive	 their	 moving to internet based services that allow people to connect        Technology, an R&D institute which is located in Brazil.
decisions	Nokia	are	taking	to	build	on	current	success.	In	doing	     impressive growth over the years. Consequently, the company’s in many different ways. Connecting People is the strap line of
                                                                                                                                           the	well	known	Nokia	logo.	This	will	also	create	new	markets	for	     Nokia	manufactures	its	products	at	fifteen	facilities	located	
so, we will deal with three fundamental business concepts,            revenue	has	grown	significantly	in	the	last	ten	years.	
                                                                                                                                           very sophisticated handsets with the power and capabilities of        at	Espoo,	Oulu	and	Salo,	Finland;	Manaus,	Brazil;	Beijing,	
namely, change, growth, and innovation.                                                                                                                                                                          Dongguan	 and	 Suzhou,	 China;	 Farnborough,	 England;	
                                                                                                                                           a computer. Customers will use their handsets for phone calls,
                                                                      Innovation is the Magic                                              music, maps, local information, all forms of messaging,               Komárom,	 Hungary;	 Chennai,	 India;	 Reynosa,	 Mexico;	
The Business Must Deal With Change                                    Since the key decision to produce mobile phones in the 1980s, advertisement, games, blogs and many other innovative                        Jucu,	Romania	and	Masan,	South	Korea.	Nokia’s	Design
In order to survive in the long term, a business must cope with Nokia have become the masters of product development. The services.	In	order	to	deliver	these	services	on	the	internet,	Nokia	                   Department is located in Finland.
any external changes i.e. changes in the business environment. first	mobile	phone	weighed	as	much	as	a	year	old	baby.	Later,	 created Ovi (www.ovi.com) in 2007.
                                                                                                                                                                                                                 In	 2006,	 Nokia	 and	 Siemens	 created	 a	 joint	 venture	
The correct strategic decisions must be made. When considering in	1987,	they	produced	the	first	phone	that	could	be	held	to	the	
                                                                                                                                                                                                                 company called Nokia Siemens Networks which operates
the future direction of the company, managers often use a tool ear. It was called the Cityman 900. This process has continued Your Task
                                                                                                                                                                                                                 in around 200 countries worldwide, and with about 60,000
called the PEST model. This tells us that change is caused by ever since and the company now brings out a new product
                                                                                                                                           Nokia	 is	 repositioning	 as	 an	                                     employees.
four forces, political, economic, social and technological. almost every month. This level of performance results from
                                                                                                                                           internet services provider. Ovi is a
Examining	 these	 forces	 is	 called	 environmental scanning. intensive research and development (R&D)	 activities.	 Nokia	                                                                                      Nokia Ireland Limited
                                                                                                                                           Finnish word that means ‘door’.
Essentially,	it	is	an	attempt	to	see	what	the	future	will	look	like.	 knows that it is impossible to gain and retain a market leadership                                                                         Block 1B Beech Hill Office Campus
                                                                                                                                           The Ovi service (www.ovi.com) is
This	 is	 not	 an	 easy	 task.	 Nokia	 have	 succeeded	 by	 dealing	 position without R&D. Consequently, around 30% of the                                                                                       Beaver Row
                                                                                                                                           the	 door	 to	 five	 key	 applications	
effectively with these changes, particularly in the area of company’s employees work in this area. In fact, the company                                                                                          Dublin 4.
                                                                                                                                           namely, games, maps, media,
technology. Thirty years ago, only large businesses had has over 50 R&D centres in 16 countries across four continents.
                                                                                                                                           messaging and music. Assume that you are working with a               This case and all associated teaching components can be
computers and these computers needed large premises to These are the people who designed the N1100, which is still the
                                                                                                                                           marketing	company	engaged	by	Nokia.	You	have	been	asked	              printed from the CD or the Spirit of Enterprise website
accommodate	them.	Nobody	had	a	mobile phone; the nearest best selling mobile phone of all time. They also designed the
                                                                                                                                           to come up with three suggestions for a slogan (strap line) to        www.soe.ie.
thing was a radio controlled phone in a vehicle. Technology has new N97, which is actually a mobile computer. These devices
                                                                                                                                           accompany the Ovi logo. While creating your slogans, you
changed our lives dramatically and will continue to do so. In are called smartphones in the industry because they have
                                                                                                                                           should think about the features of the service and attempt to
1992,	 Nokia	 decided	 to	 sell	 off	 its	 other	 businesses	 and	 advanced capabilities. Such innovation is critical to the
                                                                                                                                           define	a	USP (unique selling point). To be effective, your slogans
concentrate solely on telecommunications. There is no doubt company’s ongoing success.                                                                                                                           You	 can	 find	 out	 more	 about	 the	 work	 of	 Nokia	 at	
                                                                                                                                           should	 attempt	 to	 stress	 this	 USP	 or	 some	 other	 important	
that this decision provided the base from which the company                                                                                                                                                      www.nokia.ie and www.nokia.com.
                                                                                                                                           feature of the service.
grew to its current position.
THE WORLD’S FASTEST MOVING COMPANY
Case Summary                                                           Building on the Case                                                   Student Exercises                                                     b) Identify some of the opportunities you feel exist for a
                                                                                                                                                                                                                       mobile phone store in your locality.
The case deals with the rise of the Nokia Corporation, from            The following points can be used to provide additional                 The following student activities can be undertaken by
                                                                                                                                                                                                                    c)	 Explain	 how	 the	 mobile	 phone	 market	 could	 become	
the relatively small country Finland, to global leader in the          information and stimulate group discussion around the                  individuals, pairs or group assignments requiring written
                                                                                                                                                                                                                        saturated.
mobile phone market. The topic of strategy for growth is               case.	The	Nokia	case	offers	the	opportunity	to	review	or	              reports,	discussion	or	presentations.	Most	of	the	exercises	
                                                                                                                                              can also be used to assess learning following a class                 d)	 Use	the	SWOT	approach	to	describe	what	you	feel	are	
discussed using the PEST model and the Product/Market                  introduce concepts of change, growth, innovation and
                                                                                                                                              session.                                                                  Nokia’s	 strengths	 and	 weaknesses	 in	 the	 internet	
Matrix.	 Nokia’s	 performance	 as	 an	 innovative	 product	            some associated concepts, models and tools.
                                                                                                                                                                                                                        services sector.
developer and their move to reposition as an internet                                                                                         The Case Analysis
                                                                       The standard product life cycle curve can be introduced or
service provider, following saturation of the core market, is                                                                                                                                                       Business Terms
                                                                       revised during discussion around the concept of market                 The task posed at the end of the case will stimulate an
also discussed. The student is required to create slogans
                                                                       saturation. The Spirit of Enterprise Product Development               analysis of the case material and exercise the ability to use         The following can be used as a quiz to engage in a review
or	 strap	 lines	 to	 support	 the	 logo	 of	 Nokia’s	 new	 on-line	
                                                                       Template can be found on www.soe.ie and on the CD.                     judgment	and	make	rational	decisions.	Essentially,	it	is	a	           of terminology.
service Ovi.
                                                                                                                                              creative exercise in the marketing/advertising arena. It is
                                                                       Nokia                                                                  designed for individual or group use. The case can be                 True or False?
                                                                                                                                              studied in a cooperative learning mode prior to undertaking           •	 The	 mobile	 handset	 market	 is	 considered	 to	 be	
                                                                       •	 The	title	of	this	case	study	is	inspired	by	the	title	of	a	
                                                                                                                                              the Task section.
Syllabus links                                                            book called Business The Nokia Way: Secrets Of The                                                                                           saturated.
                                                                          World’s Fastest Moving Company	by	Trevor	Merriden.                  Student Reflection                                                    •	 Considering	 what	 external	 changes	 might	 affect	 a	
Leaving Certificate Business                                           •	 The	company	has	sold	more	than	100	million	handsets	                                                                                         business in the future is called environmental
                                                                                                                                              What have we learned from the case?
Unit	4:	The	Changing	Role	of	Management,	Business	and	                    in a single quarter.                                                                                                                         scanning.
Change                                                                 •	 The	company	was	a	pioneer	of	the	GSM	system	which	                  This exercise is particularly effective when done                     •	 The	Nokia	Corporation	is	headquartered	in	France.
                                                                          was	instrumental	in	driving	the	market	in	Europe.                   individually, followed by group discussion. It aids                   •	 Nokia	has	not	developed	many	products.
Unit	5:	Identifying	Opportunities
                                                                                                                                              understanding, retention and recall.
                                                                       •	 Nokia’s	 success	 is	 said	 to	 have	 created	 many	 other	                                                                               •	 The	Product/Market	Matrix	is	a	strategic	tool.
Unit 7: International Business
                                                                          firms	and	some	40,000	jobs	in	Finland	since	1992.                   Possible	reflection	questions	include:                                •	 When	 existing	 products	 are	 sold	 to	 existing	 markets,	
LCVP                                                                   •	 The	Nokia	brand	has	been	valued	at	$36	billion	and	is	              •	 Do	 I	 understand	 what	 is	 meant	 by	 market	 share	 and	           this is called market development.
                                                                          listed	 as	 the	 fifth	 most	 valuable	 global	 brand	                 market saturation?                                                 •	 When	a	business	uses	its	own	money	to	grow,	this	is	
Enterprise	Education
                                                                          (Interbrand/BusinessWeek).                                                                                                                   described as organic growth.
                                                                                                                                              •	 Do	I	understand	the	purpose	of	the	PEST	model?	
Unit	1:	Enterprise	Skills,	Idea	Generation	                                                                                                                                                                         •	 A	business	cannot	grow	organically	and	inorganically	
                                                                       The Product/Market Growth Matrix                                       •	 Can	 I	 describe	 the	 Product/Market	 and	 identify	 each	
Unit	4:	Promotion	and	Advertising                                                                                                                                                                                      at the same time.
                                                                       •	 This	model	was	created	by	Igor	Ansoff	(1918-2002).	He	                 quadrant by name?
                                                                                                                                                                                                                    •	 Nokia	is	one	of	the	best	known	brands	in	the	world.
The case can also be used for related topics in Junior                    is often referred to as the father of strategic                     •	 Do	I	appreciate	the	need	for	R&D	in	order	to	compete	
                                                                          management.	 It	 was	 first	 published	 in	 the	 Harvard	              in a global market?                                                •	 Making	 a	 strategic	 decision	 to	 move	 into	 a	 new	
Certificate Business Studies and Leaving Certificate
                                                                          Business Review in 1957.                                                                                                                     business sector is known as repositioning.
Applied and during relevant activities in Transition Year.                                                                                    •	 Can	I	explain	the	terms,	joint	venture,	acquisition	and	
                                                                       •	 Risk	 increases	 as	 the	 strategy	 moves	 away	 from	 the	            merger?                                                            Multiple Choice
                                                                          familiar areas of the existing product and the existing             •	 Can	 I	 relate	 the	 information	 in	 the	 Nokia	 case	 to	 any	   In	 which	 of	 the	 following	 business	 areas	 does	 Nokia	
                                                                          market.                                                                other areas of knowledge?                                          engage?
Learning Outcomes                                                      •	 Market	 penetration	 is	 generally	 considered	 to	 be	 the	
                                                                                                                                              Applied Business Question (LC Business)                               •	 Mobile	phones
                                                                          least risky way for a company to grow.
Having studied the lesson and carried out the related                                                                                                                                                               •	 On-line	games
                                                                                                                                              a)	 Explain	the	meaning	of	organic	and	inorganic	growth.
exercises, students should be able to:                                 PEST
                                                                                                                                              b) Describe some ways in which a business can grow.                   •	 On-line	music
•	 Discuss	 the	 sources	 of	 change	 experienced	 by	                 •	 Environmental	 scanning	 is	 a	 fundamental	 strategic	                                                                                   •	 All	of	the	above
                                                                                                                                              c)	 Outline	some	of	the	reasons	why	a	business	may	seek	
   business	using	the	PEST	model.	                                        task.	 In	 view	 of	 the	 obvious	 difficulties	 in	 forecasting	
                                                                                                                                                  to reposition itself in the market.                               Which of the following is used to carry out an environmental
•	 Describe	the	function	of	the	Product/Market	Matrix.	                   the future, many global organisations develop several
                                                                          possible future scenarios.                                          d) Describe the function of R&D in a business.                        scanning exercise?
•	 Outline	the	benefits	of	a	strong	R&D	function.
                                                                       •	 There	are	various	versions	of	the	PEST	model,	including	                                                                                  •	 The	Product	Market	Matrix
•	 Discuss	 the	 concept	 of	 business	 growth	 and	 identify	                                                                                Case Study (LCVP)
                                                                          STEER,	 STEEPLE	 and	 STEEPLED,	 the	 extra	 letters	                                                                                     •	 Unique	Selling	Point
   some channels to growth.                                                                                                                   a)	 Outline	the	purpose	of	environmental	scanning.	
                                                                          standing for regulatory, ecology, education and                                                                                           •	 PEST
•	 Explain	why	Nokia	is	attempting	to	reposition	itself	in	               demographics.
   the market.                                                                                                                                                                                                      •	 Innovation

								
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