Nokia's Chinese Operations

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Case Details:

Case Code : OPER070
Case Length : 21 Pages
Period : 2000-2008
Organization : Nokia Corporation
Pub Date : 2009
Teaching Note :Not Available
Countries : China
Industry : Mobile phones

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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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Introduction Contd...

Nokia sold 70.7 mobile phones in the country in 2007 7, accounting for a market share of 35%.

Internationally too, Nokia performed well in 2007, and announced record sales and market share for the year. By the end of the year, its market share had crossed 40%. Sales during the year8 were at € 51,058 million against € 41,121 million in 2006, a growth of 24%9.

The sales of mobile phones were at € 25,083 million. Analysts were of the view that Nokia's leading position in the low-cost handset market and its formidable position in emerging markets like China and India were the reasons behind its success.

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

China had been Nokia's largest market since 2005 and continued to be so in 2007 with sales of € 5,898 million.10

Nokia entered China way back in 1985, and when the Chinese market started opening up, it established itself as a formidable player, becoming one of the top two mobile handset companies11 in the country by the late 1990s.

However, the fortunes of the company took a turn for the worse later, when the Chinese government came out with a licensing system in order to encourage domestic players.

The Chinese manufacturers flooded the market with low priced handsets, and also targeted the emerging rural markets, to which the foreign players had not till then catered...

Excerpts >>

7] “Nokia Sells 70.7 m Mobile Phones in China,”, January 28, 2008.
8] The financial year ends on December 31.
9] Nokia Corporation and Subsidiaries, Consolidated Profit and Loss Accounts, IFRS,
10] “India Sales Push Nokia 2007 Sales Revenue,”, March 25, 2008.
11] The other being Motorola, these two companies, and the other global companies accounted for 90% of the market share.

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