Nokia International Business: Quality Control Report

This report provides a comprehensive analysis of Nokia's international business operations, with a specific focus on quality control within its supply chain management. It examines the company's product failures, particularly the decline of its mobile phone business due to its inability to adapt to changing market demands and competition from companies like Apple and Samsung. The report delves into the causes of Nokia's product recalls, such as the faulty BL-5C batteries, and analyzes the short-term and long-term effects of these recalls on the company's financial performance and brand reputation. It evaluates Nokia's response to these crises, highlighting both effective and ineffective strategies. Furthermore, the report offers recommendations for improving Nokia's operations and supply chain management, including leveraging information technology, implementing efficient systems, and utilizing Six Sigma methodologies to enhance product quality and mitigate future risks. The analysis includes figures on sales and the impact of recalls.

RUNNING HEAD: INTERNATIONAL BUSINESS
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NOKIA
International Business
Report
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Quality Control in Operations and Supply Chain Management
Supply chain management is the supervision of the flow of goods and services with the
management of all processes that renovates raw materials into the finishing product. Supply
chain management helps the company to launch a new product in an efficient manner. The
supply chain of product covers every process from production to product development. Supply
chain management upsurges customer values and competitive advantage.
Nokia product failure
Nokia is a multinational corporation founded in the 12 May 1865. The company
expanded and launched several products. The company engaged in the business of computer and
mobile phones. Competition of smartphone business changes the automobile industry but Nokia
failed to adapt the competitive change and there was an epic failure of product. In 2014,
Microsoft takes the mobile phone business. The strength of Nokia’s company is a GSM handset
which becomes an instant hit and when it is launched. Nokia was the global leader in the mobile
phones but due to the product, Failure Company has lost its customer base from the market.
Nokia used to holds a vast portion of the smartphone until the iPhone came out in the market in
2007.
Nokia’s supply chain management
Nokia’s supply chain management is a significant operational area. All the products and
services are sold under the brand of Nokia and comply legally with the value chain. Symbian OS
product was failed because it was not creating something unique and facing competition from the
IOS and Android. Symbian OS the new product that launches by the Nokia failed due to main
reason as they launch at the time of the declining condition of Windows and it was the great
mistake of the company. The new products of the company lead to the ultimate collapse of the
company.

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Decisions that led to the failure
The innovate brand of the company failed to adapt the changed smartphones with full
touchscreen and application-based operating system. The innovation in the smartphone industry
did not accept by the company and did not keep with customer’s expectation that results in the
reduction of the consumer base. Nokia continued its focus on the Symbian series by neglecting
the innovation in the smartphone business. The company did not focus on the Windows phone
and give a slow response and suffered the demise. One of the potential reasons for the collapse of
failure of the product is lack of innovation. The other users in the mobile industry adapt the
change such as Samsung, blackberry and apple. Umbrella branding strategy implemented by the
Nokia in the N-series but it was an epic failure and failed to create a buzz among customers
(Doz, 2011).
Microsoft acquired the Nokia; Nokia unwillingness in adaptation in the marketing change
was the reason for the company’s loss and turned down of the brands. Innovation change in the
smartphone industry is usual and if companies failed to adapt they will definitely remove from
the market by competitors. Nokia’s product failures were the main reason that Microsoft
acquired Nokia.

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Figure: Nokia sales until 2018
Source: (Bolaji, 2019)
Relevant issues related to the product recall
Product recall means appeal from the manufacturer to return the product due to the
defects and safety issues that can cause harm to the consumer or may cause risk to the seller and
buyer. Investigation of the product recalls in the Nokia states that manufactured batteries of the
Nokia, could cause explode or short-circuit. The 46 Million BL-5C batteries of Nokia returns
back from the manufacturer due to the safety issues in the product. As according, the safety or
health issues in the recall Nokia BPM+ product affected the health of a person and creating the
systolic and diastolic pressure with an arm circumference ranging from 22 to 42 cm (Sharma,
2014).
Product recall of the company depends on the quality maintained by the company in the
supply chain. In Nokia, 66% recalls is due to the design, safety and vendor quality. Nokia faced
an intimidating challenge of product recall and replaced the 46 million faulty batteries. Defective
products returned by the customers create the situation of a product recall that affects the
company’s profile and goodwill in the market. Nokia’s product recall is mainly due to the
design, safety analysis, and vendor quality. The product recall mainly depends upon the quality
managed by the company in the supply chain. Nokia brings quality change in the supply chain by
implementing the product advisory (Olenski, 2016).
Long-short term effects of a product recall that Nokia suffered and cause serious
consequence for the company. The short-term effects of a product recall in Nokia that they faced
declining cash flow and degradation in the goodwill of the company. Product recalls dissatisfied
the customers and reduce the customer base. Nokia recalls of 46 million from the market have a
negative impact on shareholder value. The recall volumes and long-term abnormal return faced
by the Nokia after the product recalls. The long-term effects of a product recall in Nokia affect
the financial performance of the Nokia. The product recall affects manufacturers and suppliers at
the end (Chamikutty, 2010)

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Current situation
Nokia management set up a new plan to recover from the product recall and introduced
the entry-level and mid-range phone with high-end smartphones. The Nokia is in a slow and
steady recovery of the products. In 2018, the home of Nokia products (HMD) is in trying to
achieve the larger stake of the global smartphone market and Finnish OEM will be looking to
continue that upward trajectory. The current recall practices in the Nokia taken as a major issue
and faultfinding perspective takes to the Centre stage as soon as the problem starts to rise.
Company is strongly participated in the global companies to work on the products and run the
program named extensive product development organization to provide stability to the products.
The company designed another software platform on the place of Symbian OS. Nokia brings
stability in the management of operations and set-up a team who will check the durability of the
products (Nokia, 2019).
Company’s response
Product recall of Nokia in ‘BL 5C battery crises’ is the tough task of the company and
company advisory services made delay in giving the solutions to the company. The 45 million
batteries of the company get affected in the market and reported a slow response to the
customers. Companies step was not efficient in relation to crises management and failed to get
customer satisfaction. Nokia did not address the crisis of product recall in swiftly and
unconditionally. The next stage in response to the company’s response to the product failure is
effective communication. The low-level of communication found in the response of product
recall by the top-level managers of the company. The lack of vision was found in the process of a
product recall. In the case of replacements, the company did not make a delay and charge the
batteries overnight. The management of the company was struggling in the free replacement of
batteries and failed to cop up with the changing environment. The competitive forces and
accelerating market changes make delay in the response of the product recall. (Carter, 2011).

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Recommendation
Leveraging information technology is an integral part of the smartphone businesses and business
must prepare for the new devices and experiences that come with innovative technology. The
experienced staff and system upgrades are important with the changing environment but in the
case of Nokia, it failed to adopt the changes in the smartphone businesses. The recommendations
to the leveraging information technology personnel are: (Roberts, 2012).
1. Efficient LOBS (Line of business Software): LOBS system contains three-legged
technology that every business should place in regular business. Firstly, maintains the
path in sales and quoting. Secondly, the CRM system (Customer relationship system) that
helps to create a healthy relationship with dealers, customers, and manufacturer. Thirdly,
the automobile production system supports the management and regulates the
manufacturing and assembly of products. Nokia failed to adopt the three-legged
technology and face losses in the financial years. CRM system helps Nokia in identifying
the current taste and preferences (Nokia, 2019).
2. Customers via the web: Handle regular operations through the Web such as invoices
via the web and should engage in social media. Working through the web includes
delivery of manuals, work product, and web-based scheduling. Nokia must adopt social
media platforms to increase the sales and for promotion of the product (Doz, 2011).
3. Automated content system: Using innovative technology may lead to success and
save the efficient time of management. Scanning to a network share with PDF files is
better than the circulating the papers in the departments to the department. Nokia must
adopt the automated content system to save time and resources in different departments
(Roberts, 2012).
Resources to improve the recall process
In the recall process, manufacturer plays a significant role that handled the uncertain situations.
Every manufacturer must conduct the inspection with the computer information storage, evaluate
the defects in the product, and give remedy to each product of the company. Nokia must give full
refunds to customers to maintain loyalty to your brand (Ni, 2014). Recall process directly hit the
bottom line that needs resources to recover such as Replacement devices, efficient team for

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problem-solving, quality Management systems and new batteries. Nokia adapts the product
recall to replace the 46 million batteries from the market. Nokia needs replacement devices and
efficient team to know the reason for short circuit and blast in the batteries (Ni, 2014).
Recommendations for improving operations and supply chain
management
Companies used to adopt advanced technology with ecommerce portals and one-click purchasing
grew in relevance. It is recommended to the company to use demand-driven planning and
business operating because it gives an effective response to threats and helps to know the
external factors of the product. This will give opportunities and helps in mitigating the
challenges in the product recall. Another recommendation to the company is cloud technology
that helps the management about real-time inventory and from the store shelf back to the
manufacturer (Tang, 2011).
Six-sigma system
Define: Connection of Board of directors is very significant as it is important to the customers
and the six-sigma system helps to eliminate the defects in the product and measure of process
performance. The first step of six-sigma is defining in which Nokia must analyze the marketing
problem and re-define the solutions, which satisfied the customer’s wants. To remove the defects
from the products resources are needed and feedback from customers is significant. Nokia
adopted the feedback process in sig-sigma, which is Voice of Customer (VOC) that helps to
remove the defects from the batteries (Andersson, 2014).
Measure: Implementation of six-sigma is important for better understanding to the board The
second step is measure; six-sigma is a mathematical approach that collects data of the product
description by customers and condition of the product in the market. Nokia drafts good
measurements in the process of product recalling.
Analyze: The Next step of this approach is to analyze, in which Nokia understands the factors
that affect the quality of products. Variations in the products can be identified through this
process that helps in the product recall. Root-cause analysis is part of this step that helps to

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identify the reason for product failure. This step helps to mitigate the wasted process in the
product recalling process (Bolaji, 2019)
Improve: After the analysis, Nokia manufacturers must implement the improvement process in
the product recalling. Nokia uses the resources to bring improvement in the products.
Replacement tools help the company to replace the batteries and find the default for the
explosion and short-circuit (Ni, 2014).
Control: The improvements in the product recall must be permanent and not for the temporary
nature. Nokia in some countries changes the batteries in overnight but some customers filed the
complaint of short-circuit again. In this case, the company must give a permanent solution to the
customers (Andersson, 2014).
Prevention
Six-sigma system helps to get prevention from future obstacles because it focuses on the
improvement of the management performance and not just on the counting defects of the
product. Six-sigma enables the training of the employees and managers that helps the company
to evaluate the future risks in the company
Timeline
2007-2013
Nokia was engaged one of the world’s largest product recalls of 46 million batteries that turned
out the faulty and can cause explosion and default. The long-term problem arises as the new
competitors are launching phones with innovative technology. Nokia takes the urgent step of
product recalling. During this period, the company loses its share from the market and falls
behind with its new product range (Nokia, 2019)
2013-2018
Microsoft acquired the Nokia that returns the profit to the company of 18 months and the
financial position is back to the normal. Microsoft purchases the company’s handset business for

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$5.44 billion. The product recall of Nokia in 2018, comes with the CRM email and warning
content showing the safety issues related to the blood pressures from the mobile applications
(Nokia, 2019)

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