Global Business Nokia

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In order to expand its presence globally, first of all the mode of entry should be taken into consideration. In order to determine the optimum entry mode, the intensity of competition on the market should be evaluated. In the markets Nokia wants to enter, the intensity of completion as far as mobile phones is concerned is high but also, there is a lot of growth in these markets as the telecom industry is at a boom which directly affects the business of mobile phone suppliers. Hence there are a number of options available for Nokia. It can franchise its outlets in the countries it wants to enter; it can also go for a joint venture with an already existing firm with its own brand name Nokia as it already has good will or it can go for acquisition and acquire an existing brand with its production facilities or set up its own production facility or import products and set up a service office.

When an organization wants to go global, customer focus is very important. Nokia, being a customer centric organization needs to make an in depth research and analysis as to what the consumer in the markets want and what are their tastes and preferences as far as mobile phones and the kind of products Nokia is offering is concerned. A company which provides customer driven service, quality and products and uses this as a strategic step can gain a competitive advantage. (Langevin, 1998)

Now once the mode of entry is decided, another important strategic decision is about the production of the products. When going global Nokia has two options. Either it can keep its manufacturing plants in its home country and import finished products to the respective global outlets or it can shift its manufacturing plants to the areas of expansion. Since Nokia also wants to expand in the Middle East, the second option is more viable as the cost of labor in these areas is low which means that the total cost of production will be lower. For example in China low cost of production is the result of low labor cost, low cost of local purchasing and low cost of investment. (China’s advantage in low labor cost will remain in coming decade, report, 2004). On the other hand, the technological aspect should also be taken into consideration. If the countries are not well equiped with the kind of machinery the manufacturing requires, then the cost of importing that machinery might be higher than importing finished products. Hence, this decision varies on the situation at hand.

Another strategic decision when going global will be the way the organization or the business is handled from the headquarters. What is important to implement is that the responsibility should not be confined to the main office but should be distributed to the mangers in charge in the particular region where the business is operating. The manager should also be given independence to run things which he thinks is the best mode of working according to the culture of that area to keep the staff satisfied in addition to the clients and avoid clashes. The network of operation should be decentralized with local mangers given autonomy and of course they should also be more accountable (Recklies Management Project, 2006). One important step that companies are taking as a strategic decision is to integrate the information flows. (John L. Daniels, 1993)

The production systems should be integrated and there should be coordination between different production areas of different countries or regions when the company is expanding into global markets to keep each other updated and learn from the new trends in a particular area or market.

Also when Nokia goes global, it should always create collaborations with the local experts and professional to understand how the market runs best in the particular area and gain knowledge from the expertise of the locals and apply it to the business in that areas. Collaborations and partnerships are very important when expanding. “A strategic alliance with a company selling a complementary product or service can provide more effective market access, resulting in more foreign sales in less time”. (Lars Perner)

Also, collaborations should be made with the local universities so as to carry out research in the apparel or garment sector and find out consumer trends. Strategic alliances are a silver lining in this competitive global world. (Grosse, 2000)

And lastly, the most important aspect when going global is marketing. Nokia should localize its marketing campaigns to suit the needs of the local market. Where the target market is not so sophisticated, the ads should be made simpler and Nokia should focus on the functionality of the phones rather than using an emotional appeal. In essence, the brand message should be conveyed in a form that the target market of that particular area or region understands and it appeals to them. Cultural taboos and color and religious sensitivity should also be paid attention to in order to make the business a success in the global marketplace.

REFERENCES:

• China’s advantage in low labor cost will remain in coming decade, report. (2004, September 07). People’s Daily Online . http://english.peopledaily.com.cn/200409/07/eng20040907_156220.html .
• Grosse, R. E. (2000). Thunderbird on global business strategy: On Global Business Strategy. John Wiley and Sons.
• John L. Daniels, C. D. (1993). Global Vision: Building New Models for the Corporation of the Future. McGraw-Hill Professional.
• Langevin, R. (1998). Customer Focus: A Strategy for Success. Thomson Crisp Learning.
• Lars Perner, P. (n.d.). The Global Marketplace. Deparment of Marketing, Marshall School of Business . University of Southern California, Los Angeles: http://www.consumerpsychologist.com/international.htm .
• Online, P. D. (2004, September 07). China’s advantage in low labor cost will remain in coming decade, report.http://english.peopledaily.com.cn/200409/07/eng20040907_156220.html .
• Recklies Management Project, R. (2006, December 05). Strategy – Global Business. themanager.org.