Nokia and Finland Essay Example

the need for wireless communication grew, naturally developing mobile communication technology. Despite such stimulant which triggered Finland’s development of mobile communications technology, there are more features which helped emerge of this cluster such as free competition among independent telecom companies in association with Finish government’s policy.

Due Finnish telephone network was never monopolized by the state, granting many licenses for telephone operations to prevent the Russia to seize its national telephone system when Finland was Russian Grand Duchy. After independence, Finland’s attempts to nationalize poorly performing telecom failed due to political resistance, but could stimulate private operators to upgrade their technology to prevent their nationalization. The legacy of communication business left a lot of competitive companies in the sector for development.However despite all the reasons mentioned above, emerging demand for such technology from global market would be the greatest reason why mobile communication industry emerged in Finland and made Finland a world-leading nation in mobile communication. 3. How was Nokia able to become a world leader in mobile handsets? Nokia’s aggressive strategy to dominate mobile communication cluster would be the main reason how Nokia could become a world leader in the sector among other reasons.

Nokia’s passion for mobile communication industry was great enough to give up more than 40% of its revenue in is pre-owned communication industry to concentrate only in mobile communications. Nokia was also lucky enough to see the possibility of mobile communication early enough to predominate the industry and prevent any competition from other company. Nokia then moved more aggressively to keep its place as a world leading company, developing better technology and setting standard in the industry.Nokia was the first to build

global production line in mobile communications sector, 5 to 10 years ahead of other competitors.

Nokia surely was lucky to start its investment on mobile communication with no global competitor, but its foresight of seeing the possibility of mobile communications, courage to fully concentrate in one sector and aggressive strategy to prevent and differentiate from other competitors were no luck.

What are the critical challenges for the Finnish government in 2001? For participants in the Finnish mobile communications cluster? For Nokia?As rapid industry growth attracted many new handset competitors, many with a background in consumer electronics such as Samsung and Sony joined the competition in mobile communication sector. Finland and Nokia still maintained their position as a world leading nation and company in mobile communication sector but constant challenge from other competitors threat their positions. New technology constantly forced the mobile communications to update their standards pressuring and invest more on the technologies.

As the competitions in mobile communication overheat, companies of Finland faced declined.Nokia reduced their employees in order to cut their cost spending and Finland, where more than half of Nokia’s production line was established suffered from a great unemployment rate. Moreover as the technology improved, Finland faced shortages of skilled engineers and scientists while. Finish universities invested offered programs to train students but unemployment kept increased among the young and low skilled, creating strains on the traditionally egalitarian Finish society. Harsh competition caused the fall of Nokia and communication cluster in Finland, severely damaging Finish economy which relied mainly on one sector and one company.

. Given the telecom downturn, what should the government do next? What should the private sector do? Firstly, the government should

support its companies to aggressively maintain their places as pioneers in mobile communications. To do so, Finland should invest more on technologies which no other companies can imitate. If the finish government was to educate the surplus of unemployed population, the lack of skilled engineers and increasing unemployment in Finland could both be resolved.Nokia should focus on unifying global markets and keep its place as a global standard. As many competitors emerge in mobile communication business new standards different from what Nokia had set also emerged.

Korea for example uses CDMA type handsets whereas many European countries use GSM type handsets. Nokia could not overcome the different standard and failed in Korean market dominated by Samsung and LG. Nokia should therefore once again set the global standard of mobile communications industry and target the global market based on such standard.