Nokia's Rise To The Top

Ryan McGraw
October 21, 2012
Business Paper

Technology is a commodity that is utilized every day by the vast majority of the world. From electronics to machinery there are endless kinds of technologies being used and developed. One of the major electronic providers is the cell phone industry. When the term “cell phone” comes to mind people think Apple, Blackberry, and Samsung. These are examples of the companies that bring in the newest, most advanced phones to the market. They focus on what’s “in” or what’s “the new trend” in the cell phone world. What they lack is the strength of globalization, whereas the cell phone company Nokia Corp. uses the global market to their advantage. From the variety of phones to their target market, Nokia utilizes the best global strategy for marketing cells phones and communication products. Nokia began as a paper mill in Tampere, Finland in 1865, when Finland was still part of the Russian empire. In 1871, founder Fredrik Idestam opened another mill in the nearby town of Nokia and the Nokia Company was born (Management Today, 2012). In 1992, the bosses of Nokia took a risk and decided to devote the company to new technology such as telecoms and the GSM standard that brought mobile phones to society. Between 1998 and 2001, Nokia’s turnover increased nearly fivefold as it rapidly came to dominate the global handset market. One of Nokia’s most famous products, the 6100 series digital phone became a worldwide phenomenon shortly after its realease in 1997. Including the 6100 and other models, Nokia sold nearly 41 million cellular phones in 1998. Net sales increased more than 50 percent over the previous year, jumping from FIM 52.61 billion ($9.83 billion) to FIM 79.23 billion ($15.69 billion) (Nokia Corp. SWOT Analysis, 2012). Nokia is now known as the second highest leading manufacturer in cell phones after Samsung and was the world’s largest vendor of mobile phones from 1998 to 2012.
There are a number of reasons why Nokia triumphs in the cell phone market controlling nearly 25% of the global market share. The reason that Nokia claims to over 1 billions customers in more that 150 countries is because they successfully understand global marketing. They supply products to an enormous target market that varies with economical and cultural needs. Nokia provides phones ranging from $10 to $700 dollars that satisfies the needs of poorer countries and a broader spectrum of customers (Ferrell, 2011). The Finnish company, which ships more phones globally than any competitor, leads rivals in global sales of both smart phones and less powerful, less profitable "feature" phones. A key strategy that Nokia uses is to build new devices and services for markets with minimal infrastructure (Simonite, 2012). Even though third and second world countries lack proper funds to pay for commodities such as cell phones, there is still a large enough market that wants this technology. From personal experience in Uganda, Africa, I witnessed the need and want of cells phones. There were phone kiosks and shops on every corner in the town that was occupied by no more than 10,000 people. While the phone services vary from ours, people feel the need to own a cell phone even if they can’t use it everyday. Since one of Nokia’s major markets is in India, they created a program called “Nokia Life Tools”. Starting almost 5 years ago, Life Tools was a pilot project that is now an effective and successful information tool for Nokia phone users that provide information to users on agriculture, healthcare, and education (The Hindu, 2011). The program only costs $1.30 per month to receive the necessary information that is crucial to the livelihood of farmers and other Indians. This program is a great example of how Nokia meets and exceeds the needs of India’s citizens.
Today Nokia is struggling in the cell phone industry. Companies such as Apple and Blackberry are creating new smart phone technology that is appealing to consumers. These companies are also expanding into more countries creating better ideas on how to widen their target market. Because there is such a popular demand for smart phones even in poorer countries, Nokia has had to come up with new and improved phones that still are cost effective to produce. Some possible solutions for Nokia to continue to thrive at the top of the global market is to possibly join with another company, work on targeting the United States more, and continue using innovative ideas to build their company even further.

Sources

Simonite, Tom. "Nokia sets sights on developing world." Technology Review [Cambridge, Mass.] May-June 2011: 74+. Academic OneFile. Web. 18 Oct. 2012.

“Nokia Corporation SWOT Analysis.” Nokia Corporation SWOT Analysis (2012): 1-10. Business Source Premier. Web. 20 Oct. 2012

"Nokia strengthens Life Tool services." The Hindu [English] 19 July 2011. Academic OneFile. Web. 14 Oct. 2012.

“Company Vitae Nokia.” Management Today (2012): 18. Business Source Premier. Web. 18 Oct. 2012

Ferrell, O.C.. Business A Changing World 8th Ed. (2011) McGraw- Hill/Irwin