Strategic Planning and International Business: Nokia Corporation

This report provides a comprehensive analysis of Nokia Corporation's international business strategy, focusing on its expansion into the Indian market. It begins with an abstract outlining the report's objectives, which include analyzing the strategic planning process, identifying the needs and benefits of international expansion, and evaluating Nokia's approach. The report delves into a literature review, exploring theories and models such as Hofstede's cultural dimension theory and PESTLE analysis, which are crucial for understanding the challenges and opportunities of international business. The core of the report involves an external environment analysis of India, considering political, economic, social, technological, and legal factors. It also assesses Nokia's internal strengths and weaknesses and formulates a strategic plan using the global integration versus national responsiveness matrix. The analysis includes an examination of market demand, cultural considerations, and the application of marketing, production, and finance functions. Finally, the report offers recommendations for Nokia's market entry strategy and concludes with a summary of the findings.

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Abstract
The purpose of this assignment is to analyze the strategic planning process and determine the
needs, benefits and approaches for the selected business organization Nokia Corporations which
a Multi National Business organizations. The report, determines the increasing pressure of the
MNC companies operating in the global market and the pressures faced by them for global
integration and national responsiveness. The international strategy implemented by Nokia
Corporations will be identified in the report. The basic steps taken by the business organizations
in strategic planning excluding external environment scanning will be analyzed. It analyzes the
trends in the global market and external changes in the geographic areas in which the chosen
business organization has been operating. Further, the report analyzes the strengths, weakness,
opportunities and threats as well as goal formulation. It reviews the major functions of
marketing, production and finance used by the business organizations and implemented in the
strategic plan. It further explains specialized strategies which are appropriate for the emerging
markets as well as international new ventures. Lastly, the report provides recommendations and
concludes the report.

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Table of Contents
Introduction......................................................................................................................................2
Literature review..............................................................................................................................3
Analysis...........................................................................................................................................6
External environment analysis of India.......................................................................................6
Demand and culture analysis of the country................................................................................7
Strategy formulation........................................................................................................................8
Recommendation...........................................................................................................................11
Conclusion.....................................................................................................................................13
References......................................................................................................................................15
Appendix........................................................................................................................................20

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Introduction
Nokia Corporation is a multinational company of telecommunications and consumer
electronics. The selected multinational company Nokia corporations have been founded in the
year 1865. The headquarters of this company is situated in Espoo in Finland. Nokia corporations
is considered to be the 415th largest company in the year 2016 measured by its revenue (Alon et
al. 2013). Nokia Corporation manufactures and operates in the mobile and electronics industry.
The company Nokia Corporations manufactures range of cell phones and mobiles, electronic
devices and other software which offers to the customers and the target audience to experience
enhanced facilities like music, videos, capturing images and pictures, games, navigation and
business mobility in their manufactured mobile and electronic devices (Field et al. 2013).
Moreover, Nokia Corporations also offer to its customer’s equipment solutions and other
services by providing communication networks through Nokia Siemens network. It manufactures
and operates in four business groups including manufacturing and selling of mobile and cell
phone devices, multimedia, enterprise solutions and communication. The four business groups
are operated and supported by the other departments of the company such as the customer and
market operations team and the technology platforms including various corporate functions.
According to Gangeshwer 2013, in the past years the company Nokia Corporations strengthened
its positions in its consumer electronics and mobile market and in its telecommunications. The
multinational communication corporations headquartered in Espoo, Finland, produces and
manufactures products such as mobile electronic devices, telecommunication, telephones, maps,
music, games, messaging, and other software related features in the mobile devices offered by
the multinational company Nokia. The company has a joint venture with Nokia Siemens
network and Siemens that provides the company telecommunication facilities network and the
required equipments, services and solutions. With around 124,000 employees in around 120
countries, it is the world’s second largest mobile manufacturing company. Currently, the
company wants to open manufacturing facilities in the country India (Field et al. 2013). The
purpose and objective of this assignment is to perform an in-depth external environment analysis
of the chosen country India. The assignment provides an environmental scanning in India, its
protectionism policies and national responsiveness of the citizens of India. It considers the
internal strengths and weakness of the company and formulates an effective strategy using the

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global integration vs National Responsiveness matrix that can be used by Nokia corporations in
penetrating and developing new markets in the chosen country that is India (Gangeshwer 2013).
It determines the imperative approaches that can be adopted by Nokia Corporations in support of
the strategy. Further, it conducts and external environment analysis of the selected country India
and match the analysis with the internal resources of the selected MNC Nokia Corporations in
the form of financial, operation and human resources through situation analysis. Lastly it
recommends an effective solution in which the selected MNC Nokia corporations can implement
the strategies and concludes the assignment.
Literature review
Summary: The literature review covers the theories and models required by the business
organization for expanding its business to the targeted country. It explains the difficulties and
challenges of business expansion. Further it explains the theory of Hofstede’s culture dimension
theory and its implications while taking decisions for targeting the business expansion in the
selected country. Further, the theories and models of PESTLE model are explained in this section
which is required by the business to analyze the situation of the country in respect to the business
setting. It also explains about the internal strength and weakness of the company in determining
suitability of the company in the selected country for business expansion.
Business expansion challenges and difficulties
According to Halbert and Rouanet (2014), every business organization faces the
difficulties and challenges of business expansion or the growth of the business organization.
Expansion of business is considered to be a part or a stage in the business life cycle or the
product’s life cycle. The business growth or the business expansion is often associated with
increase in the financial revenue of the company’s owner and the employees of the business
organization. It was mentioned by Hang, Garnsey and Ruan (2015), business expansion is
considered is considered as a validation of the company owner’s initial business idea and the
start up of the business organization and to achieve the goal and objectives of the company by
following the vision and mission of the business organization. Business expansion also
represents the owner of the business organization to address the myriad issues. According to

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Hayes (2018), growth and expansion of the business organization presents various challenges
including managerial, legal and financial. Growth and expansion also requires additional capital,
new opportunities and responsibilities to the investors, shareholders, institutional leads and the
investors of the company.
Hofstede’s cultural dimension theory
As mentioned by Halbert and Rouanet (2014), the Hofstede’s cultural dimension theory
can be implemented for the expansion of business to Asia. The theory has been developed by
Geert Hofstede; it is a framework that can be used by the business organizations while taking
decisions upon expanding its business to other countries and to discern the way in which the
business organization analyzes the differences in the culture and habits of the citizens of the
targeted countries by the business organization. As stated by Hang, Garnsey and Ruan (2015), it
is the way in which the business organization discerns the ways in which the business is done
across the cultures and habits of the citizens of the targeted countries. The framework of
hofstede’s cultural dimension theory is used by the business organization to differentiate the
various national cultures, the dimensions of culture and the impact of the culture in the setting of
the business in the particular country. As mentioned by Kumar and Sethi (2016), the framework
of hofstede’s cultural dimension theory can be identified into six categories that define the
culture that includes power distance index, collectivizing vs. Individualism, uncertainty
avoidance index, feminity vs. masculity, short term vs. long term orientation, restraint vs.
indulgence.
PESTLE analysis and framework
As stated by Lauring (2013), PESTLE analysis is used by the company while analyzes
and taking decisions as to which country to expand its business. The PESTLE analysis is
considered as an analytical tool for the strategic business planning. According to Kamalahmadi
and Parast (2016), it is also a framework to understand the external influences of and its impact
on the business organization. For analyzing the external environment of the business PESTLE
analysis and its framework can be used. The framework includes the political factors about the
degree of political intervention in the country or the economy. As mentioned by Kumar and Sethi
(2016), it includes the political stability, the policies and procedures of the country,

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environmental law, trade restrictions and others. Economic factors include the factors such as
economic growth, the interest rates of the country, and the rate of inflation of the country. The
social factors include the socio economic factors like the habits, shared belief and attitude of the
population, the age distribution, attitudes. According to Licuanan,, Sengupta and Neelankavil
(2015), considering the technological factors are crucial for the business, the rate at which the
technological landscapes changes in the country. As mentioned by Steger (2017),the
environment factors include the sustainability, pollution targets, and availability of raw materials.
The legal factors include the health and safety, the standards, customer’s rights and laws, product
safety and others.
Global integration vs. national responsiveness matrix
According to Singh and Gaur (2013), the integration and responsiveness framework is
considered to be the most widely used framework to understand the strategies of the
multinational companies and its organizational setting. The multination corporation expanding
the business operations in the foreign countries in subjected to various problems and challenges
for the cross-border integration and the national responsiveness. It was mentioned by Meyer,
K.E. and Su (2015), the framework attempts to better cope up with the diversity of the
organization and its strategies. The global integration is considered to be the degree in which the
selected company can utilize the same procedure or methods of manufacturing the products or
market the product in the selected country for the expansion of business. As mentioned by
Prabhu and Jain (2015), local responsiveness implies the extent to which the selected company
can customize the manufactured product or service to complement with the culture, habits and
attitudes in the other countries. According to Meyer, K.E. and Su (2015), the two dimensions
that is the Global integration and Local responsiveness results in the international business
strategies. The international business strategies include multi-domestic, transactional, export and
standardization. The standardization strategy is implemented when the company and the product
manufactured can meet the needs and the demands of the people of every country. As stated by
Wilson (2014), the technologies, tools and equipments used are universal. The multi-domestic
strategy customizes the manufactured product to complement the conditions of every country.
The transactional strategy is a combination of both the multi-domestic strategy and

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standardization strategy. The export strategy is mainly focused on domestic operations. It implies
expanding business globally and taking advantage of global opportunities.
Analysis
External environment analysis of India
The selected country for the business expansion is India. It is the seventh largest country
and is the second most populated country in the entire world. The country is highly popular for
its cultural diversity and it considered being the world’s leading democratic country. As per the
research and analysis, the country is currently experiencing an increasing rate of GDP along with
the continuous growth (Sundar 2013). Therefore it indicates that the country has opened doors
for foreign companies and invests in the country for the promotional purposes or opening a new
manufacturing unit. The pestle analysis framework has been used to determine the suitability of
the manufacturing unit of Nokia Corporations in the country. According to Singh and Gaur
(2013), this theory id used to scan and analyze the macro environment or the external
environment by taking into considerations factors like political, economic, social, technological,
and legal factors. These are some of the important factors that is analyzed to identify and
determine the suitability of the company and its operations in the selected country, India.
Political factors: According to Paul and Gupta (2014), the country India is a democratic
country and it runs based on the federal government. The political environment of the country is
highly unstable, and it influences greatly by the policies and legislation formulated by the
government, the political interests of the general public, the differentiated ideologies of the
several political parties present in the country. The mentioned factors affect the multivariate
political factors. There are presence of various taxation policies including the income tax, sales
tax and service tax. Other taxes include octroi charges and utilities (Meyer, K.E. and Su 2015).
These the taxes are influenced by the Union Government. The government of India also
influences privatization.
Economic factor: It has been analyzed that the economy of India is considerably stable. It was
mentioned by Singh and Gaur (2013) The Industrial reform policies of the company have
improved the country’s economic environment. These policies include reductions in Industrial

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licensing, formulation of FIBP, liberalization of foreign capital. The GDP of the country has
increased further at the rate of 5%.
Social factors: The social factors imply the habits and trends of the business environment.
However, there is an increase in the rate of senior citizen population which implies that there
might be increase in the pension cost and there might be increase in the employment of older
generation people (Smith 2018).
Technological factors: The country has greatly encourages product development and it also
influences new and cost efficient procedure and process of manufacturing and developing the
products. The country has the strongest IT sector as compared to the other countries; it promotes
continuous technological developments and IT developments, up-gradation of software and other
technological developments (Singh and Gaur 2013).
Legal and Environmental Factors: Recently there has been various legal and environmental
changes. Several initiatives has been undertaken for the protection of environment including
minimization of waste products, recycling, eliminating discrimination, increase in the salary and
wages of the employees. According to Wilson (2014), the country is highly population due to
industrialization and urbanization. This has resulted in environmental pressures and other health
related problems. Therefore, there is an increasing pressure from the government to reduce waste
generation, disposal, and reduce air pollution.
Demand and culture analysis of the country
It was mentioned by Roth and Morrison (2015), the Global integration is the forces which
make the Multinational Corporation to exploit the worldwide resources and integrate the
operations and activities of the business organization on a global perspective to analyze the
economies of scale and achieve cost efficient way of production. The need for global integration
is the need for efficiency. Moreover, the multinational corporations aim for the utilization of
advanced technologies which enable the business organizations to expand the business globally
and attain the economies of scale (Steger 2017). This helps the Multi National companies to
develop even more standardized products. National integration requires the multinational
companies to incorporate a strategic decisions based on the targeted country for expansion of

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business. The factors for local responsiveness includes the differences in the tastes and habits of
different countries, the administrative costs of coordinating manufacture, the trade legislative
hurdles and challenges, differences in the infrastructure and past habits and culture( Prabhu and
Jain 2015). These factors for National responsiveness enable the companies to incorporate their
products and services to meet up to the expectations and demand of indigenous people. The
people of India respond to the unique features and specifications of the mobile phone devices.
Thus the mobile features needs to be customized. According to Paul and Gupta (2014), the local
laws, customs and tastes of the locals must be met. It needs to add customer elements to meet the
laws of the country and implement customized marketing and provide unique products to meet
the local demand and needs.
Situational analysis
Nokia Corporations faces various complex and challenging environment. The company is
a global provider of mobile devices and the country’s laws, policies and legislations has an
impact on the sales of the company (Licuanan,, Sengupta and Neelankavil 2015). The political
instability of the country can greatly impact the operations and sales of the company. However,
by abiding with the laws and legislations of the country, it can overcome the challenges. The
economic factor prevailing in the country is suitable for the business. As mentioned by Patel and
Chavda (2013), there is abundance of cheap labour; therefore the company utilizes its internal
resources to retain the staffs and skilled employees with fair compensation, satisfactory working
conditions and adequate incentives to keep them motivated. The core product to be manufactured
is customized mobile phone devices. Nokia corporations can face competition with other mobile
phone manufacturers in India like White Box, Motorola Mobility Holdings, Sony mobile
company and others (Singh and Gaur 2013). It can allocate its finance in implementing new
emerging technology for manufacturing process for customized product. The HR resources can
be utilized to maintain comfortable working conditions.
Strategy formulation
Nokia corporations plan to build its manufacturing units all across the world and expand
its business operations in Asia. The multinational corporation plans to locate its manufacturing

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units in the selected country India. It will be using various tactics and strategies to incorporate
the global expansion plans. Internationalization is one of the strategies that are to be used by the
company to reduce its operation cost. According to Meyer, K.E. and Estrin (2014), expanding
the manufacturing unit in India will reduce the excess cost of operation as it has relatively
deflated currencies along with low cost of living (Smith 2018). Nokia corporations will be
adopting highly aggressive strategies to maintain its position in the India market. These strategies
include embracing joint venture, establishing their subsidiary, acquiring firms before starting the
expansion initiatives. It was mentioned by Roth and Morrison (2015), it will be partnering up
with the best companies. Replying on the partners will help the company to analyze the factors
associated with the risks and understand the potential risks, and undertake necessary actions to
overcome the challenges and obstacles. The company partnering with will be local to the own
company or local to the selected country for expansion. Further, the company will be focusing on
export and import. According to Sundar (2013), the headquarters of the company will be locating
in the origin country which would enable the business organization to invest in the employee’s
staffs and the facilities overseas. It will be employing small local manufacturers in the country of
expansion ad would be exporting key resources to the companies in the neighboring countries as
well. However, there will be significant business challenges, therefore, it needs to manage the
international logistics including the export and import and manufacturing the products.
Moreover, It was mentioned by Meyer, K.E. and Su (2015), the company will be company with
the trade regulations of the country and ensure compliance with the foreign manufacturing. The
company will be testing the international market of the country by exporting its manufactured
products overseas and gauge the success in term of sales. Consequently Nokia corporations are
required to adjust its international expansion strategy and create multi domestic platforms in
which the company will be manufacturing its goods in the selected country in a more efficient
manner (Singh and Gaur 2013).
Another strategy that can be formulated by the company is adopting a global business
strategy (Wilson 2014). Nokia corporations will invest in establishing its presence in the India
market and India economy and tailor its manufactured products to the local Indian customers.
The best way to implement this strategy is by modifying the initially manufactured products
according to the Indian culture, needs, habits and attitudes. According to Patel and Chavda

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(2013), the company will be engaging in Indian customers, the traditions and the cultural traits of
the Indians. The modified and specialized version of the products to be manufacturing in India
must crater to their needs and customs of the country people. However, As mentioned by Singh
and Gaur (2013), these adjustments to be incorporated are expensive and it may incur financial
risks if launched unproved products in the Indian market. In order to better suit the local
markets of the selected company it needs to upgrade the software of the mobile phones. the
global will be emphasizing on efficiency. Minor modification will be implementing in the
manufactured products in the chosen region (Smith 2018). This strategy aims to focus on gaining
the economies of scale by producing and offering the same product globally with monior
modifications to suit the customs, habits and needs to the local people of the selected country.
Nokia Corporation can implement transactional business strategy. It is considered to be
the combination of both global and multi global strategies. The company will be establishing full
scale operations in the Indian market (Meyer, K.E. and Su 2015). The company will be dividing
its operational activities into departments like decision making, manufacturing, research and
development, logistics department which are to be aimed at responding to the needs and
requirements of the local people of the selected country. The company will be implementing the
best management tactics in order to achieve positive economies of scale with an increased focus
on efficiency. However, According to Wilson (2014), it will be facing challenges concerning the
costs as driven by the Indian legal and regulatory concerns and other related challenges like
hiring local employees and renting the building, production and manufacturing space and others.
Implementing this strategy is complex as compared to the other expansion strategies. However,
As stated by Singh and Gaur (2013), if the strategy is implemented in a proper manner it will be
beneficial for the company. Nokia corporations will be focusing on value added activities and
operations in order to optimize the modifications and adjustments incorporated to gain leverage
and ensure competitive advantage for the local market. The adjustments will be made to adjust
the programs to match it with the local languages of India. The company will be maintaining a
balance between the needs and preferences of the local people and efficiency within the selected
country (Meyer, K.E. and Estrin 2014). The company will be creating a strong and consistent
brand along with a strong brand culture. The company prioritizes growing internationally. By
establishing and maintaining the brand name of the company it will support and reflect the