NOKIA: RE-CONNECTING PEOPLE

Intro

Nokia, the Finnish telecommunications company, is not only the world’s leading mobile phone manufacturer but also Europe’s biggest brand and the world’s 5th biggest brand according to the Business Week – Interbrand ‘Best Global Brands 2009’ report.

However, in what might be described as a ‘challenging’ – for “challenging”, read hyper-competitive – global marketing environment, Nokia’s brand value fell by 3 per cent to £23 billion (euro 24 billion) – still an enormous amount. With Coca-Cola, IBM, Microsoft and GE occupying the top four positions, Nokia retained its title as the world’s largest mobile phone manufacturer.

What Nokia says about itself

Nokia is the world's largest provider of mobile devices; a leader in equipment, services and solutions for network operators; and a driving force in bringing mobility to businesses. Nokia is about enhancing communication and exploring new ways to exchange information. In short, Nokia is about connecting people.

The company has 15 manufacturing facilities in nine countries, producing over 265 million handsets from 100 billion components. Nokia has research and development centres in 11 countries. and employs over 50,000 people1.

Now did Nokia get here?

Nokia’s origins can be traced back to the 19th century, and since then it has made one of the most remarkable business transformations ever. It has moved from wood pulp, through rubber boots and tires, cables – almost 10,000 different types – and even erasers, slippers, tissues and toys, to state-of-the-art consumer electronics (specifically within the field of mobile telecommunications).

It took almost 100 years to get into electronics. In 1960, the cable company started an electrical division. Then in 1966, came a decisive moment – the 3 original firms were formally merged. The businesses for the new Group were defined as rubber, cable and forestry, electricity, and electronics.

Then, it was by no means certain that electronics would win out as the most important division within Nokia. The traditional businesses within the group could point to stability, longevity, market share and cash generation. And in the “new” business divisions, television manufacture was seen as a much better bet for quite a few years – in other words, the “safe” option.

However, several factors were soon to make mobile communications not only a natural but also strategic choice and what might be described as a strategic window – a strategic opportunity where there’s a strong fit between the resources and capabilities of the organisation and an identified opportunity.

The pioneering ‘70’s – There might be gold in the sky

At the start of the 1970s, the Nordic countries, who had already established a great degree of co-operation in various areas of trade, planned to have a common telephone network. No way, or so it was thought at the time, could Finland take the lead this enterprise. To put it bluntly, it had too small a population, and too many lakes, which ruled out interconnecting cables between the islands as far too expensive. The aerial route was the best, maybe the only solution, and so the NMT (Nordic Mobile Telephone) network idea was born, with Nokia appointed supplier of hardware. This enabled them to set future standards – potentially a huge market advantage.

The take-off ‘80’s – There’s definitely a market

NMT, the world's first international cellular mobile telephone network, opened in Scandinavia in 1981 with Nokia introducing the first car phones for the network. In 1982, Nokia developed Europe's first digital telephone exchange, the DX 200.

Since then, the company has had a hugely impressive track record of achievement. They claim the invention of the first car phone (the Mobira Talkman – 1984) and the first true portable and commercially available handset/phone (the Mobira Cityman – 1987 – a favourite of City Gents and Yuppies i.e. business