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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"The Indian market is growing rapidly and the mobile
penetration rate is still low. It's got great potential."1
- Song Sauk-hun, Analyst at Gartner Inc. in 2004.2
"We see a great potential for the continued growth of
mobile telephony in India where mobile penetration is relatively low. As the
leading brand in mobile communications in India, Nokia will continue to deliver
products which cater to the needs and preferences of Indian consumers."3
- Robert Andersson, Senior Vice-president, Nokia Mobile
Phones Asia Pacific, in 2003.
Nokia - Made in India
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In April 2005, Nokia India, a subsidiary of Finland-based Nokia, announced that
it was setting up a manufacturing facility for mobile devices in Chennai, the
state capital of Tamil Nadu in southern India. Nokia planned to invest US$
100-150 million in the facility, where the production was expected to begin in
the first half of 2006.
Pekka Ala-Pietilä, President and Head of Customer & Market Operations, Nokia
Corporation said, "Establishing a new factory in India is an important step in
the continuous development of our global manufacturing network."4 India was ideal for Nokia's new production facility. Each mobile handset has more than 400 parts and the average production capacity of each manufacturing unit of Nokia is around 20 million units.
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This level of manufacturing involves a total of 8 billion
components per annum, requiring strong logistical support. Nokia's manufacturing
facility needed to be located close to a major international airport or sea port
for quick supply of components. India met all these requirements, and also
enjoyed cheap manpower costs and proximity to the rapidly growing Asia Pacific
markets.
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Besides, Nokia was the market leader in mobile
communication devices in India. The company has been carrying out sales
& marketing, customer care and research & development activities in the
country. Nokia considers India to be one of its most important markets.
The company's Code Division Multiple Access (CDMA)5
facility is located in Mumbai and provides software and technical
support to CDMA consumers in India and other Asia Pacific countries. In
2004, Nokia was chosen as 'the most respected consumer durables company'by Businessworld6. The magazine wrote, "This
Finnish company's debut at the top of the heap says two things. |
Nokia's Strategy in India
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