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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“As the largest mobile phone manufacturer in both the global and Chinese markets, Nokia considers China a strategic market and a significant base of manufacturing, R&D, and innovation. With its impressive product portfolio, in-depth localization strategies, successful channel construction, and constantly improving brand loyalty, Nokia has been a leader in the Chinese mobile-phone market since 2004.”¹

- David Tang, Vice President, Sales, Nokia China in 2008.

“Nokia is the standout example of a firm that was able to learn the rules of the game in China and swiftly revamp its strategy for the local market.”²

- BusinessWeek³, 2008.

Introduction

In March 2008, Nokia China, the Chinese arm of Finland-based telecom major, Nokia Corporation (Nokia), signed a US$ 2 billion⁴ strategic partnership deal with China's largest mobile phone distributor, China Postel Mobile Communication Equipment Co.⁵ (China Postel), under which it was to supply handsets to the latter. Nokia had won a similar contract from China Postel in 2007 for US$ 2.5 billion. China Postel first entered into a contract with Nokia for the supply of mobile phones in 1998 after which it distributed more than 37 million Nokia mobile phones.⁶

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1] “German Feds Want Nokia Subsidy Returned,” TelecomWeb News Break, March 11, 2008.
2] “Why Nokia is No.1 in China,” BusinessWeek, April 11, 2008.
3] BusinessWeek is a weekly business periodical published by McGraw-Hill
4] “Update 2 – Nokia to Supply Phones Worth $ 2 bln to China Postel,” in.reuters.com, March 7, 2008.
5] China Postel Mobile Communication Equipment Co. is one of the leading distributors of mobile phones in China with a share of 30% in the wholesale cellular phones market.
6] “Nokia Signed a 2.5 Billion Dollars Deal,” www.news.softpedia.com, May 11, 2007.

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