Finland and Nokia
BUSA4126 01
Kerry Jett
Background
Until the early 90’s Finland was considered a deescalate place that was remote and in the
corner of Europe. Finland has been a part of Sweden for six centuries until 1809. The Nordic
neighbors of the Soviet Union became abundant with severity making the once unknown
apparent to public infrastructure. The government held strong agencies to the Finnish companies
and influenced ownership structures of key industries. With time and efforts of the Finland
nation prosperity level caught up to the OECD average slow rise. Finland has sparsely populated
European country, variously surrounded by Baltic Sea.
Homogenous country Finland society is filled with immigrants. The culture is shared
with Swedish neighbors respectfully and based on religion. Post World War II economic
performance was characterized by slow catch-up to current technology. GDP growth per hour
reached 69 percent in early 1990’s. Growth previously stated is at a similar rate to the United
States in years 1970-1980. During the early 1900’s Finish constitution enabled a “semiPresidential” Form of government. President directly elected by the people in 6 year terms
allowed policy powers to be fringed upon and used at leisure. The vulnerable geopolitical
position via the Soviet Union along with the constitution allowed the president Urho Kekkonen
to dominate the country’s agenda.
Parliament has been controlled by coalitions often encompassing the spectrum of parties.
Kekkon had at one point forged these spectrums out of desire and to avoid discord on domestic
policies that could destabilize Finland’s central and external relations. Logically lived the
government had been elected in 1999. Many parties within the coalition were included in the
disgruntled government but one was excluded. The rural Center party was excluded.
Finnish Economic Policy
Finland had an economy that was driven by their countries natural resources, and they
had a perfect location on the coastline. The country was mostly built up on small service sectors
and dominated by the manufacturing industry. Finland had three main natural resources that
made up most of the country’s economic growth, which was pulp, and paper that accounted for
40% of exports, wood products accounted for 16%, and engineered metal, which help build ships
that accounted for 23% of exports. Due to Finland having forest covering almost 76% of the
country’s total land area, the pulp and paper industry was excellent, which played a huge role in
GDP growth. Investment rates were on the rise, total productivity was rising, and the GDP
growth rate stayed between 3 and 5% per year, during the years of 1960s through 1980s.
The economy began to fall when Finland joined forces with Germany, in which wages in
the Finnish economy was lowered, and companies profitability was falling extremely compared
to other countries. During World War II, Finland trades were heavily affected by the rules of the
Soviet Union and had to help the Soviet fund the war with the natural resources and products the
country once exported, such as steel, ships, textiles, and machinery. Due to the war Finland lost a
lot of their own territory, which required 15% of its population to have to relocate. The spending
for education was very high compared to the growth of the country’s GDP. The quality of the
country’s education was very good, in which 60% of the population had completed a secondary
education or beyond. The country had over 270,000 students attending in their 20 Finnish
universities. Unlike the Germany, Finland had strong ties between companies and their banks,
which held them in a strong position in the financial market.
Large diversified groups, such as Nokia, Ahlstrom, and Valmet, dominated the corporate
sector of the Finnish. In 1982 the Bank of Finland devalued the Finnish Markka by 3.8% and
then again by 5.7%, with increasing taxes the country had started to see a down fall.
Radiophones and mobile phones dated back to Finnish TV manufacturing company, Salora that
soon evolved the radiophone devices. The process began in 1964 in response to a Finnish Army
invitation for tenders, in which the government gave invites by through the use of radio
technology. With after a couple of different merges with different companies, they produced
telecommunication cables, which merged with Nokia in 1967.
In 1982, the first digital telephone was introduced by a company called Telefenno, which
was a joint venture between Televa and Nokia. In 1982 this product was Nokia’s most successful
export. The pioneering of roaming technology, produced by NMT was a big discovery in 1981,
which allowed it to be possible for the systems to know where a telephone was located, which
also allowed a user to cross over different national borders while still using the same phone. This
product produced by NMT made the Nordic region the world’s largest single mobile market of
this time. At the time this particular market was expanding at a very rapid growth, attracting
many private operators and manufacturers, which was the beginning of a very new industry,
mobile phones. The UK was the only other competitor at this time, in which in the late 1980’s,
there were about 15 competitors in Nordic region.
In 1979 Nokia and Salora began a jointed venture called Mobira, which they marketed
and developed radio technology and NMT phones. Expanding their business internationally,
Nokia bought out several electronics companies, and also bought out a PC and office electronic
business, called Ericsson. The following Graphics depict several diverse features to identify
models such 5 porters, BCG matrix, IFE matrix and SWOT:
Telecommunications
The mobile telecommunication sector grew extremely out of combination. Radiophone
technology was the leading innovation of the wireless telephone system. Basic cellular system
had developed in the 1950’s in the United States. The exceptions of small cities in some parts of
the world all people in some way were connected. The market of telephony did not develop as
full market until the early 1980’s. 2001 over 500 million phones were sold worldwide on the
mobile level. Using the mobile phones was highest in the Nordic countries with penetration
rates of over 70%. Between Austria and Italy penetration rate of above 70% became apparent
in the European countries. Unlike Japan with a penetration of 50% the United States 40%
surpassed a failure before other demand countries.
And evolving standard subsided in the second generation systems which involved digital
technology. The United States received this technology after Europe. Digital technology
provided huge benefits in terms of operating cost, system capacity, and enhanced service
offerings to customers. For example, Nokia-Mobria developed systems and handsets together
with AT&T. Motorola were also active in GSM technology with a focus of foreign countries. In
the United States digital standards emerged including TDMA and CDMA. These agencies acted
as a platform in market. A number of GSM systems were established in an offering of ability to
single phone usage in Europe. Qualcomm’s Code Division Multiple Access (CDMA) followed a
very extensive and restrictive licensing strategy.
Finland in 2001 had maintained its rank as leading competitive nation in 2001. Overall
challenges were obsolete and became growth instead of failure. Experiencing severe downturn,
Nokia had seen its revenue and profits fall. Facing shortages of skilled engineers and scientist
demand will rise and it will need to be met. Tailored for a foreign market expansion to overall
success of the market is objective. Finland has unemployment increasing especially among the
young and the low skilled. The major difference in the prosperity was and has been creating
strains on the rational egalitarian Finnish Culture which is similar to aforementioned studies.