Introduction The Nokia Group (Nokia) is the worlds largest mobile manufacturer and a leading supplier of digital mobile

and fixed networks. The companys increasing focus on cellular products and wireless services is responsible for the Nokia success during the last decade. Headquartered in Helsinki, Nokia is the largest and most successful organization in Finland. By reviewing the market in the 1980s, analog telecommunication products and services dominated the market. In the beginning of 1990, the increase of wireless phone systems resulted in new standards for future mobile communications. Digital networks where developed with more potential in traffic rate and roaming capabilities. In the end of 1990 the increased demand is focused on wireless information exchange, connecting people and computers to interact with different parts of the world. The Organization The Nokia Group has during the last decades experienced major organizational changes and shifted its focus to new market and product segments. In 1994 Nokia consisted of five business groups; Consumer Electronics, Telecommunications, Cables and Machinery, Mobile Phones and Other Operations, with its core focus towards telecommunications. Later Nokia merged the Consumer Electronics and the Cables and Machinery business groups with the Other Operation business group (Nokia 1997). There are many elements and organizational factors in the companys outstanding success. The company was established in 1865 and has over a long period established strong relations with different vendors and manufacturers in different parts of the world. From the early days of the mobile industry, Nokia produced and manufactured multiple standards and cellular products. The firm acquired a wide base of knowledge and with its continued research and development (R&D) effort, the result was production of superior cellular products and wireless services. The Nokia Group is represented with sales in 130 countries. Most of the companys executive management and board are with Finnish origin. In each country the company is represented with a local management, which is responsible for various operations in its country. Due to

the majority of Finnish leadership, it resolves similarities to an organization with polycentric management with geocentric operations (Keegan 1998:11-16; Rahul 1996). Nokia has increased total sale with more than 60 percent since 1994. The mobile phone groups share of the total sale has increased from 35 percent in 1994, to 56 percent in 1997. The profit from the group has increased from 44 percent, to 61 percent the same period. The net profit of the total sale has more than doubled since 1995, to 12 percent in 1997. The R&D costs have increased 2 percent for the same period, to 9.3 percent of the total sale in 1997. The Nordic markets As the most successful organizations in the history of Finland, Nokia is successful in different markets. In 1996 it estimated 6 % of net sales and a 46 % penetration rate in the Finnish market for cellular mobile products. In Scandinavia, the market penetration rate reached 44 % in Norway and 29 % in Denmark. Sweden was ranked as Nokias 8 major market with sales estimated to 8 billion FIM (Nokia 1997). As the company increased its knowledge in telecommunications in the late eighties, it entered the European and world arena. All these indications demonstrate the local adaptation and usage of the cultural differences Nokia adopted in the Nordic countries during the eighties and nineties. Today, Norway is the only Scandinavian country that not is a member of the European Union (EU). The other Scandinavian countries, Sweden and Denmark, have been members since 1995 and 1974. Finland became a member in 1994. The importance of Finlands participation in the EU is obvious to the global localization of the Nokia Group today. Nokia is represented with sales offices in every European country, US and in Asia. Nokia has production facilities in Europe, Asia and the US and R&D departments in 11 counties. The organizations economic development resolved in heavy foreign capital investment and is today represented in European and US stock exchanges. In some respects, Nokia as a Finnish company could be identified as a Baltic country, rather than the belongings to the western European culture and economy (Guttman 1994; Rahul 1996; Nokia 1997). The Core Competence Part of Nokias core competence is the knowledge and experience in the wireless cellular and network services industry. By focusing on superior products and services, Nokia has gained

several national and international awards. Introducing new product modifications and technological enhancements is part of the companys product leadership. With a wide range of products, Nokia has applied products independently of technical standard or geographical location. Nokia also participates in developing new global standards for future telecommunication needs and trends. With its leading position as mobile phone manufacturer and supplier of digital mobile networks, Nokias participation in development of future technologies enables them to deliver excellent products for the next decade. The Nokia products are targeting to specific market segments. The Nokia design on portable cellular phones is characterized by lifestyle, freedom, opportunities of choice, technology and urbanization (Nokia 1997). The product design both emphasizes consumer behavior and technical industry standards. Nokia was the first cellular mobile manufacturer who adopted models for new ways of thinking into their marketing operations. The general management urged marketing managers to think of companies as repositories of skills, rather than portfolios of products. A marketing team from Nokia went to Venice Beach in California and the Kings Road in London, to observe the way that mobile phones were becoming fashion accessories (Economist March 1997:77). This unusual approach resulted in a superior product design and control of consumer segment. Nokia attached a unique value of trends, lifestyles, freedom, power, and technology among others, into their products. This unique value perceived by the customers resulted into a leading brand well-positioned (Keegan 1999:8-7; Quelch and Kenny 1994:153-154 and 158-160). The Unique Value Nokia saw that the customer preferences were starting to change, and applied these changes to their products. To spot the needs in the market, and to tell the customers that this is the phone they need, are some of Nokias strengths. Nokia has for many years had a focus on design, customer adaptation, and user friendliness. This has turned out to be a success, as they passed Motorola in 1998 as the world-leading supplier of mobile phones (Nokia 1998).

The unique value seen by consumers is identified in the products unique value. The unique value can be viewed as the customers perception on its benefit preferences divided by actual price A Global Winner The outstanding growth and success of Nokia can be summarized as the overall performance, focus and strategic decisions made in the early days of the mobile strategic decisions made in the early days of the mobile cellular industry. Nokia is characterized as a global winner for several reasons (Appendix I);

Product leadership The operational excellency by the top Management Identification of the internal processes from production to distribution (TQM) The success in own country Keeping the global focus on segments.

As the company grew, they identified new need, for a maturing markets and created customer needs as the products where launched (Lamb et al. 1994:728-740). The Global Cellular Mobile Industry: The global mobile phone industry is based on many different manufacturers and operators. The industry is based on advanced technology and many of the manufacturers are operating in different industries, where they use their technological skills, distribution network, market knowledge and brand name. Three large manufacturers of mobile phones are today dominating the global mobile phone industry; Nokia, Eriksson and Motorola. In addition to these companies there are many manufacturers that operate globally and locally. This report focuses on the competition among these organizations. Global Trade Unions and International Agreements When operating in a global market, there are a lot of elements to consider, like boundaries and barricades, legislation and regulations. In Europe many countries have joined the European Union (EU). EU founded the Single European Market in January 1993, which

allows mobility of goods, people, services and capital between the countries. Another trade organization in Europe is the European Free Trade Association (EFTA). This organization was founded as an alternative to the EU to ensure the negotiation power with EU and to agree on common tax and tariff rates among the members. The United States, Canada and Mexico signed a free trade agreement (NAFTA) to establish an open market between the countries. South and Central America (El Salvador, Guatemala, Honduras and Nicaragua) signed the Central American Common Market (CACM). The Latin American countries (Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela) formed Latin American Integration Association (LAIA, formerly the LAFTA). In Asia the ASEAN (Association of South East Asian Nations) countries has signed the Agreement on the Common Effective Preferential Tariff (CEPT) scheme for AFTA, but this will not be in use until the year 2008. These new open markets are made to protect manufacturing and business within the area. For global companies located outside these markets, this may lead to higher import tariffs (Bradley 1995:172-173). It is estimated that 60 % of the world trade is going to be tariff free early in the next century (World Trade Organization 1997). The World Trade Organization 131 governments are members of the World Trade Organization (WTO), which succeeded the GATT in January 1995. WTO emphasizes an effort order and predictability in international relations, based on three principles; nondiscrimination, open markets and fair trade. In many countries, the fixed telephone service is still a public sector monopoly. Last year WTO agreed on that the monopolies should be removed to ensure competition in these markets. This resolution is a result of the agreement by the countries of the EU to create a single market for telecommunication services (The Economist, September 13th 1997). The step away from monopolies will probably lead to lower prices on using the mobile phones. A decrease on these prices will again lead to increased demand for mobile phones (Parkin and King 1995:327-331). The trade unions and organizations are often responsible for defining technological standards for its area. The World Intellectual Property Organization (WIPO) and the WTO have agreed

on a joint initiative to provide technical cooperation for developing countries. Good timing and early innovation combined with better knowledge about customers, competitors and markets than other players in the industry, may lead to a competitive advantage (Larsen 1998). The increased importance of being the innovator or having the best technology may lead to more focus on affecting the decisions on defining technological standards (Porter 1985:5; Porter 1990:35) Stable governments are more likely to ensure continuity in government policy as it affects business. Stable systems allow companies to plan their affairs with some degree of certainty. To be aware of what to consider in each country or region, organizations should do an analysis of the global environment (Bradley 1995:162). Market development in the Emerging Markets Many countries in Eastern Europe are still operating under communistic governments and different reforms (Onkvisit and Shaw 1997:141), but these governments are moving towards the western standards. Some of the Eastern European countries are trying to become members of the EU. These countries have a population of almost 100 million people, and the mobile phone penetration in the countries is low. The sales of mobile phones in the South and Latin America have increased rapidly, but it is estimated that half of the regions 490 million people have never used a phone. The region is benefiting from an improved governmental stability and a trend towards privatization (Motorola 1997:10). The market for mobile phones in Asia is also increasing rapidly, and the potential sale is enormous due to the number of people living in the area. The local operators have to develop the infrastructure for mobile phones to ensure the application and sale of mobile phones in the area. The crises in Asia this year has spread to most of the world. It has been reflected in stock markets world wide, and many branches, markets and companies have been through a rough period (Appendix II). The result is governmental changes in many countries. This lead to a more uncertain political arena on the global mobile manufacturer market. Even though the price is low, the risk for large investments in these countries is considerable.

Mobile manufacturers have invested a lot of time and money in R&D and product development. This is their core strengths when facing possible entrants to the industry (Thompson and Strickland 1995:42). There are, at the time, no substitutes to the mobile phones. The potential sale is sky high, especially in un developed countries like China, India, Brazil, Indonesia, and other 3rd world countries with high population rate (Bradley 1995:242250). The Saturn Markets In some highly developed countries, especially the Nordic countries, there seems to be a saturation of mobile phones. The future sale will primarily be based on repurchase (McDaniels and Gates 1995:324). For the mobile operators and manufacturers this means that the end-users needs and preferences most certainly is going to change. The situation is similar to other high penetration mobile cellular markets. The Standardized Technologies Generally the global market is moving from an analogue system towards different digital systems or platforms. Europe and parts of Asia are based on the GSM technology. North America is primarily based on the CDMA technology, but small local installations of GSM technology are in service and future investments of satellite networks are in progress. With coverage in Europe, Asia and North America, GSM has a widely coverage in global cellular phone markets. The New Technology A Connected World There are two new types of systems in development, each of which will provide a range of innovative services (Evans et al. 1998);

Global Mobile Personal Communication Services (GMPCS) that will offer voice, fax, low rate data, and messaging services to mobile handsets similar to those used today. Iridium, Globalstar and ICO are the main GMPCS systems. All are expected to be in full service by early 2000.

Broadband Satellite Services (BSS) is intended to provide flexible capacity on the demand for high-volume telephony, video conferencing, broadcast video, and high speed Internet data services. They operate globally, but use fixed or bulky portable

terminals rather than mobile hand-held devices. BSS systems are still in development and will not be operational until 2001 at the earliest. The investments of new wireless telecommunication continue, more rapidly, than ever before. Satellites are about to emerge as a powerful force in communications, as they have already done in television broadcasting (Evans et al.. 1998:8-9). This fast growth is development driven by a combination of liberalization and technological innovation (The Economist, September 13th 1997). The liberalization has sent prices for longdistance and international calls to a less expensive level. This trend will continue as local operators begin to charge prices based on the actual cost of providing value-added services. The monthly charge for an account is likely to rise to comply with an EU directive that forbids operators from subsidizing currently unprofitable business with "high-margin longhaul traffic" (Beardsley 1998:32). The global players Motorola Motorola is one of the leading supplier of wireless communication, semiconductors and advanced electronic systems. Since 1993 they have been the worlds largest mobile manufacturer, as a result of their strong position in their large home market. Motorola has lost their leading position in their home market to Nokia, which in fact has become the worlds largest mobile manufacturer this year (Nokia 1998). The American company is decentralized with six sectors reporting to the office of the CEO. Motorola employs more than 150.000 people worldwide (Motorola 1997). Strategic Cost Analysis (Thompson & Strickland 1995) shows that Motorola has problems with their productivity compared to their main competitors (Appendix V-VI). Motorola is facing a stagnation of the sale per employee and the net profit in percent of sale has decreased from 7 % in 1994 to 4 percent in 1997 (Appendix VI). The customers preferences and needs have changed during the 1990s. Motorola has failed in adopting to these changes in their product development and design, and in their communication towards the market.

L.M. Ericsson Ericsson is another leading supplier of analog and digital mobile systems, mobile phones and terminals, energy systems and defense electronics. The company has more than 100.000 employees, but according to Dagsrevyen (1998) the company is dismissing about 10.000 of its employees. Ericssons small home market made them look towards the international markets. Their sales of ordinary telecommunication equipment made it possible for them to build a global distribution network at an early stage. This has become an important strength for the company. Ericsson has been able to integrate their overall knowledge with the future development of the mobile phone industry. This has lead to a 27 % average annual growth in total sales since 1994, with a 35 % growth in 1997. Even though they have grown fast the recent years, they have managed to improve their profitability from 8 % in 1994 to more than 11 % in 1997 and increased their sale per employee from 154 to 237 the same period (Appendix V-VI). Ericsson has an average spending of 15 % of their sales on Research and Development (R&D) investments (Appendix IX). This is high compared to Nokia and Motorola, which is spending 8 to 9 % on R&D. In the early days of the digital mobile development, Ericsson was the main provider of the TDMA system in the US, and does not supply mobile phones for the competing CDMA standard (Finstad 1998). Due to this, they have lost potential sale in the US market. A theoretical framework of Global Marketing Strategy "Global Marketing Strategy" has achieved great attention all across the world, both among the academicians and practitioners. It has been argued that worldwide marketplace has become so homogenized that multinational organizations can market standardized products and services all over the world, with identical strategies, that leads to lower costs and higher margins. The standardization of customers, importance of scale economies of standardized products and markets, can be argued when adapted to global markets. This issue has generated an important discussion on the effects of the globalization trends on company strategy (Keegan

1998: 1-4; Buzzel et al. 1995:2-9; Usunier 1996: 177; Solberg 1997; Subhash 1989:70; Quelch and Hoff 1986: 59-60). This section presents a theoretical perspective of the most influential framework of the present situation. The competitive strategy "The railroads did not stop growing because the need for passenger and freight transportation declined. That grew", Levitt (1960) explores the blindness of major business industries caused by narrow industry identification. The cellular phone industry is facing similar challenges today. There are hardly any cellular devices that only enable a phone conversation. New cellular devices are launched into the market with capability to collaborate information, exchange text messages, connect to corporate information sources etc. The railroad example and the cellular phone industry face similar identification threats, as the industries continues the rapidly expansion. The Marketing Myopia (Levitt 1960) is often refereed to as the marketing disciplines most quoted and reprinted paper that demonstrates the need for a broad interpretation of the marketing function. The article strongly argues for avoiding the myopia of narrow, product oriented industry definition. During the 1970s, the globalization of world business started for full (Jain 1989). American, European and Japanese organizations established subsidiaries and joint ventures all over the world. Theodore Levitt (1983) followed the globalization of business and emphasizes the focuses on the technology as a driving force towards a converging commonality in proletarianized communication, transport and travel. "Almost everyone everywhere wants all the things they have heard about, seen, or experienced via the new technology" (Levitt 1983:1). The new reality forces organizations to emergence the global markets, but the multinational and the global organizations are not the same. The globalization of markets (Levitt 1983) explains how the same standardized product needs different analysis in different geographical segments in the global marketplace. The different analysis approaches are reflected in the organizations orientation towards a multinational or the global company. "Globalization of markets" (Levitt 1983) is an expression which relates first to demand. Tastes, preferences and price are becoming increasingly universal in customer demands. Secondly, it relates to the supply side of the market. Products and services tend to become

more standardized and competition within industries reaches a worldwide scale. Thirdly, it relates to the way organizations, mainly multinational companies, try to design their marketing policies and control systems. These efforts are done to retain its winner position in the global competition of global products, for global consumers. Michael E. Porter (1979) focuses on a different approach towards a competitive or differential advantage, by identifying the different competitive forces that exist within a competitive market. Knowledge of the underlying forces can shift a corporate focus on their collective strengths and identify the collective weaknesses. Organizations must increase its effort on how to influence the different forces in a corporate favor. Porter also contributed with several books, which entitles organizations to develop an approach to gain strategic or differential advantages and identifying the organizations value chain. Local versus global Organizations operating in a global environment use the economic strengths of low production costs and standardization of organizational policies. Consumption is becoming global, artificial entry barriers tend to disappear. Global markets remain more apparent than real, when one looks at consumption patterns (Sheth 1986). The general discussion emphasizes how products and market strategies can be globalized under the fierce pressure of the globalization of competition and the resistance of the consumers globalization movement (Usunier 1996:187). Before the classic article of Buzzel (1968), "Can you Standardize Multinational Marketing", natural entry barriers related to culture were seen as very high, commanding adaptation to national markets and offsetting the potential advantages of scale economies. Buzzel clearly showed that with the decrease of purely artificial trade barriers, large international organizations could create natural entry barriers unrelated to culture through economies of scale. There have been numerous texts, which have sought to advice business people and academicians how to make the best choices between standardization and adaptation of marketing policies to foreign markets (Solberg 1997; Hout et al. 1982; Hamel and Prahalad 1985, Quelch and Hoff 1986; Ghoshal 1987). Centralization versus decentralization

During the 1970s and 1980s the debate on centralization versus decentralization of multinational organizations intensified. Organizations began to think that there would be a trend towards more standardized products which was delivered by standardized organizations. It soon became evident that any large-scale centralization of assets, resources and responsibility would be both organizationally difficult and strategically difficult (Buzzel et al. 1995). The globalization of consumption was presented as unquestionable postulate, because it was much easier to adopt to the recentralization policy within the organization. Kashani (1989) gives the example of Lego, the Danish toy company facing a leading competitor in the US, Tyco, which sold its toys in plastic buckets instead of Legos elegant see-through cartons, standardized worldwide. When asked by the US management to package in buckets as the competitor, who was gaining market share, the head office rejected the request. After two years and massive loss of share on the US market, Legos headquarters in Billund decided to create a newly designed bucket. Not only was the share erosion in the US stopped, the bucket was introduced worldwide and proved to be a great success. This case demonstrates that the relationship between the headquarters and subsidiaries for defining marketing strategies is complex. Too much autonomy results in purely local solutions with little economies of scale and an absent of worldwide coordination, especially when strong actions are needed. What is global strategy? The theoretical lessons we learned. Global marketing strategy is forcing organizations to rethink their strategy, redesign their organizations, seek new partnership, and open their minds as well as their boundaries. Global strategies differ a lot from other international terms in business literature. "Export markets," meant excess production or obsolete inventory in countries not yet accustomed to standards of the home market. "Offshore production" meant cheap unskilled labor. "International management" meant a separate division of an organization (Kanter 1994). Global strategy on the other hand involves all the companys markets and operations together, viewed through an integrated framework (Hamel and Prahalad 1989; Hout et al. 1982; Bartlett and Ghoshal 1992; Solberg 1997).

Countries can be grouped into regions for administrative convenience. This grouping sometimes makes a difference. One American company worked on an Asian strategy, without acknowledge the vast differences existed between Hong Kong and Malaysia or Indonesia and India (Kanter 1994). Similar assumptions where made in Europe and companies gained efficiency by creating "Eurobrands", but they still have to deal with many jurisdictions and local distributors (Bartlett 1983; Keegan 1998:86-107; Ohmae 1995:119-125). Globalization requires new relationships both across companies and in companies. To compete effectively in the global economy, organizations must strengthen their unity as well as become more adept as external learning (Bartlett and Ghoshal 1988; Ohmae 1989 #1; Keegan 1998:543-576; Kanter 1994:231). Business managers emphasize the importance of considering all markets together when determining the opportunities for sharing or maintain difference. Global competitiveness often requires greater internal cooperation. Global strategy brings new skill for companies and their managers. In "Managing Across Borders" (Bartlett and Ghoshal 1991) the authors have shown that world-wide product managers, world-wide functional managers and regional geographic managers must each maintain focus on their dimension of the business while coordinating closely with the others. The balancing acts required for effective execution of global strategies represent one more force for organizational change. Less bureaucracy and more communication will characterize the global competitor of the future. Vertical control and a hierarchy command will be replaced by more horizontal, peer-oriented relationship building across borders and boundaries (Day 1992; Kashani 1989:96; Mintzberg 1991; Yip 1992; Bartlett and Ghoshal 1997; Keegan 1998:545-558 and 562-564) Global marketing strategy is about thinking in an integrated way about all aspects of the business - its suppliers, production, markets and competition. The true meaning of global is holistic - not international. Major Challenges and Future Recommendations: Moving towards a wireless society

As we are moving into the next millennium, the world has become a global playground. People, markets, governments and organizations are continuously communicating across borders and exchanging information. The liberalization and technological invention is the main driving forces in the wireless telecommunication. Mobile cellular devices are widely accepted in the main markets; Europe and North America, with over 120 million subscribers and units sold, and still growing rapidly. Since 1989, Nokia has reorganized its organization from providing everything from electronics, cables and machinery, paper and chemicals, rubber and floorings to a lean a focused organization in the telecommunication industry (Lipasti 1989 and Quelch 1989). This organizational change enabled Nokia to focus on its core competence and be the superior manufacturer in the telecommunication industry. Nokia identified the opportunity trends in the market development of mobile cellular products at an early stage of the wireless revolution. Mobile cellular devices are today an integrated peripheral of our daily surroundings. In the Nordic countries the mobile devices are almost as natural as personal watches. The connection between consumer fashion and high technological mobile phone devices made wireless communication devices more available. Nokia has established the "Nokia Mobile Phones Group" as a leading company delivering consumer oriented cellular devices. The products relate to customer lifestyles, freedom, and independence with the newest technology available. Following the trends in the different local markets enables Nokia to understand consumer preferences and develop superior products. Nokia Telecommunications is a leading supplier to local operators. By providing superior equipment to different standards, Nokia are delivering large systems for infrastructure. The Nokia Group is a global winner with its strong market position and influence in future development in wireless telecommunications. The new challenge The telecommunication industry is dramatically changing. As the modernization increases in the telecommunication and networks are becoming wireless, new areas are covered by the

industry. The fast growing segments of the Internet are probably the main driving force for the expansion of the wireless industry (Evans et al. 1998:13). Today we explore a high growth in networks applications and the establishment of Virtual Private Networks (VPN). The next generation mobile cellular devices are characterized as mobile devices, not mobile phones. This generation devices will operate as a communication center, integrating Internet technologies and different network applications for universal collaboration and communities. To follow the rapid changes in the industry, several leading organizations are preparing for the new reality. Several joint ventures are established among the worlds leading manufacturers of mobile cellular devices, telecommunications operators, database operators and content providers. Symbian is such a joint venture between main manufacturers Motorola, Nokia, Eriksson, Philips and Psion. Other technology partners like Oracle, Sybase, JavaSoft, Lotus, DEC, and NEC among others. Symbian is established to develop a new standardized platform for the new wireless communication platform. Nokia also participates in the Bluetooth joint venture, a cooperation mainly withn Eriksson. The importance for strategic alliances is becoming crucial as the competition increases (Ohmae 1989 #2). The joining forces we experience today, are indications towards alliances in the fast growing industry. There are many alliances established in the various industries. The Information Era Many of the worlds biggest companies will challenge Nokia in the future. Organizations like Microsoft, CNN, SUN Microsystems, AT&T, Cisco and 3Com among others, are all players in the new era of telecommunications and wireless information exchange (Evans et al. 1998:13; Eugster et al. 1998:92). The key issues for further success is; 1) the establishment of the core network, where data and voice networking do not reside on functionality; 2) creating the unique product platform, not just offer the unique platform, but also bundles with partners to provide and influence the "killer" applications; 3) delivering the platform, enable solutions based products I.E e-commerce and management information systems; 4) increasing organizational skills among employees and partner alliances.

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