Index

(a) Nokia Corporation 1. Introduction 2. History

i) Pre telecommunication Era

(1) Industrial conglomerate

ii) Telecommunications era

(1) Networking equipment (2) First mobile phones (3) Involvement in GSM 3. Acquisitions 4. Logos (b) Global Market Captured/Targeted By Nokia Corporation
(c) Peru

i) Quick Facts ii) General Overview iii) Economy iv) Challenges v) Economic Indicators (d) Entry Strategy For Nokia Corporation to Enter in Peru i) Political factors ii) Social Factors iii) Economical factors iv) Technological Factors v) Environmental Factors vi) Legal factors

Nokia Corporation
Introduction
Nokia Corporation is a Finnish multinational communications corporation that is headquartered in Keilaniemi, Espoo, a city neighboring Finland's capital Helsinki. Nokia is engaged in the manufacturing of mobile devices and in converging Internet and communications industries, with over 123,000 employees in 120 countries, sales in more than 150 countries and global annual revenue of EUR 41 billion and operating profit of 1.2 billion as of 2009. It is the world's largest manufacturer of mobile telephones: its global device market share was about 33% in Q2 2010, down from 35% in Q2 2009 and unchanged from Q1 2010. Nokia's converged device market share was about 41% in Q2, unchanged from Q1 2010. Nokia produces mobile devices for every major market segment and protocol, including GSM, CDMA, and W-CDMA (UMTS). Nokia offers Internet services such as applications, games, music, maps, media and messaging through its Ovi platform. Nokia's subsidiary Nokia Siemens Networks produces telecommunications network equipment, solutions and services. Nokia is also engaged in providing free digital map information and navigation services through its wholly-owned subsidiary Navteq. Nokia has sites for research and development, manufacture and sales in many countries throughout the world. As of December 2009, Nokia had R&D presence in 16 countries and employed 37,020 people in research and development, representing approximately 30% of the group's total workforce. The Nokia Research Center, founded in 1986, is Nokia's industrial research unit consisting of about 500 researchers, engineers and scientists. It has sites in seven countries: Finland, China, India, Kenya, Switzerland, the United Kingdom and the United States. Besides its research centers, in 2001 Nokia founded (and owns) INdT Nokia Institute of Technology, a R&D institute located in Brazil. Nokia operates a total of 15 manufacturing facilities located at Espoo, Oulu and Salo, Finland; Manaus, Brazil; Beijing, Dongguan and Suzhou, China; Farnborough, England; Komrom, Hungary; Chennai, India; Reynosa, Mexico; Jucu, Romania and Masan, South Korea. Nokia's industrial design department is headquartered in Soho in London, England with significant satellite offices in Helsinki, Finland and Calabasas, California in the USA. Nokia is a public limited liability company listed on the Helsinki, Frankfurt, and New York stock exchanges. Nokia plays a very large role in the economy of Finland; it is by far the largest Finnish company, accounting for about a third of the market capitalization of the Helsinki Stock Exchange (OMX Helsinki) as of 2007, a unique situation for an industrialized country. It is an important employer in Finland and several small companies have grown into large ones as its partners and subcontractors. Nokia increased Finland's GDP by more than 1.5% in 1999 alone. In 2004 Nokia's share of the Finnish GDP was 3.5% and accounted for almost a quarter of Finland's exports in 2003.

In recent years, Finns have consistently ranked Nokia as one of the best Finnish brands. In 2008, it was the 27th most respected brand among Finns, down from sixth place in 2007. The Nokia brand, valued at $34.9 billion, is listed as the fifth most valuable global brand in the Inter brand/Business Week Best Global Brands list of 2009 (first non-US company). It is the number one brand in Asia (as of 2007) and Europe (as of 2009), the 41st most admirable company worldwide in Fortune's World's Most Admired Companies list of 2010 (third in Network and Other Communications Equipment, seventh non-US company), and the world's 85th largest company as measured by revenue in Fortune Global 500 list of 2009, up from 88th the previous year. As of 2010, AMR Research ranks Nokia's global supply chain number nineteen in the world. In July 2010, Nokia announced that their profits had dropped 40%.

History
1. Pre-telecommunications era
The predecessors of the modern Nokia were the Nokia Company (Nokia Aktiebolag), Finnish Rubber Works Ltd (Suomen Gummitehdas Oy) and Finnish Cable Works Ltd (Suomen Kaapelitehdas Oy). Nokia's history starts in 1865 when mining engineer Fredrik Idestam established a groundwood pulp mill on the banks of the Tammerkoski rapids in the town of Tampere, in southwestern Finland, and started manufacturing paper. In 1868, Idestam built a second mill near the town of Nokia, fifteen kilometers (nine miles) west of Tampere by the Nokianvirta river, which had better resources for hydropower production. In 1871, Idestam, with the help of his close friend statesman Leo Mechelin, renamed and transformed his firm into a share company, thereby founding the Nokia Company, the name it is still known by today. The name of the town, Nokia, originated from the river which flowed through the town. The river itself, Nokianvirta, was named after the archaic Finnish word originally meaning a small, dark-furred animal that lived on the banks of the Nokianvirta river. In modern Finnish, noki means soot and nokia is its inflected plural, although this form of the word is rarely if ever used. The old word, nois (pl. nokia) or nokint ("soot marten"), meantsable. After sable was hunted to extinction in Finland, the word was applied to any darkfurred animal of the genus Martes, such as the pine marten, which are found in the area to this day. Toward the end of the 19th century, Mechelin's wishes to expand into the electricity business were at first thwarted by Idestam's opposition. However, Idestam's retirement from the management of the company in 1896 allowed Mechelin to become the company's chairman (from 1898 until 1914) and sell most shareholders on his plans, thus realizing his vision. In 1902, Nokia added electricity generation to its business activities.

1.1 Industrial conglomerate In 1898, Eduard Poln founded Finnish Rubber Works, manufacturer of galoshes and other rubber products, which later became Nokia's rubber business. At the beginning of the 20th century, Finnish Rubber Works established its factories near the town of Nokia and began using Nokia as its product brand. In 1912, Arvid Wickstrm founded Finnish Cable Works, producer of telephone, telegraph and electrical cables and the foundation of Nokias cable and electronics business. At the end of the 1910s, shortly after World War I, the Nokia Company was nearing bankruptcy. To ensure the continuation of electricity supply from Nokia's generators, Finnish Rubber Works acquired the business of the insolvent company. In 1922, Finnish Rubber Works acquired Finnish Cable Works. In 1937, Verner Weckman, a sport wrestler and Finland's first Olympic Gold medalist, became President of Finnish Cable Works, after 16 years as its Technical Director. After World War II, Finnish Cable Works supplied cables to the Soviet Union as part of Finland's war reparations. This gave the company a good foothold for later trade. The three companies, which had been jointly owned since 1922, were merged to form a new industrial conglomerate, Nokia Corporation in 1967 and paved the way for Nokia's future as a global corporation. The new company was involved in many industries, producing at one time or another paper products, car and bicycle tires, footwear (including rubber boots), communications cables, televisions and other consumer electronics, personal computers, electricity generation machinery, robotics, capacitors, military communications and equipment (such as the SANLA M/90 device and the M61 gas mask for the Finnish Army), plastics, aluminum and chemicals. Each business unit had its own director who reported to the first Nokia Corporation President, Bjrn Westerlund. As the president of the Finnish Cable Works, he had been responsible for setting up the companys first electronics department in 1960, sowing the seeds of Nokias future in telecommunications. Eventually, the company decided to leave consumer electronics behind in the 1990s and focused solely on the fastest growing segments in telecommunications. Nokian Tyres, manufacturer of tyres split from Nokia Corporation to form its own company in 1988 and two years later Nokian Footwear, manufacturer of rubber boots, was founded. During the rest of the 1990s, Nokia divested itself of all of its non-telecommunications businesses.

2. Telecommunications era
The seeds of the current incarnation of Nokia were planted with the founding of the electronics section of the cable division in 1960 and the production of its first electronic device in 1962: a pulse analyzer designed for use in nuclear power plants. In the 1967 fusion, that section was separated into its own division, and began manufacturing telecommunications equipment. A key CEO and subsequent Chairman of the Board was vuorineuvos Bjrn "Nalle"

Westerlund (19122009), who founded the electronics department and let it run a loss for 15 years. 2.1 Networking equipment In the 1970s, Nokia became more involved in the telecommunications industry by developing the Nokia DX 200, a digital switch for telephone exchanges. In 1982, a DX 200 switch became the world's first microprocessor controlled telephone exchange and the first fully digital exchange to be taken into service in Europe. The DX 200 became the workhorse of the network equipment division. Its modular and flexible architecture enabled it to be developed into various switching products. In 1984, development of a version of the exchange for the Nordic Mobile Telephony network was started. For a while in the 1970s, Nokia's network equipment production was separated into Telefenno, a company jointly owned by the parent corporation and by a company owned by the Finnish state. In 1987, the state sold its shares to Nokia and in 1992 the name was changed to Nokia Telecommunications. In the 1970s and 1980s, Nokia developed the Sanomalaitejrjestelm ("Message device system"), a digital, portable and encrypted text-based communications device for the Finnish Defence Forces. The current main unit used by the Defence Forces is the Sanomalaite M/90 (SANLA M/90).

2.2 First mobile phones

The Mobira Cityman 150, Nokia's NMT-900 mobile phone from 1989 (left), compared to the Nokia 1100 from 2003. The Mobira Cityman line was launched in 1987. The technologies that preceded modern cellular mobile telephony systems were the various "0G" pre-cellular mobile radio telephony standards. Nokia had been producing commercial and some military mobile radio communications technology since the 1960s, although this part of the company was sold some time before the later company rationalization. Since 1964, Nokia had developed VHF radio simultaneously with Salora Oy. In 1966, Nokia and Salora started developing the ARP standard (which stands for Autoradiopuhelin, or car radio phone in English), a car-based mobile radio telephony system and the first commercially operated public mobile phone network in Finland. It went online in 1971 and offered 100% coverage in 1978.

In 1979, the merger of Nokia and Salora resulted in the establishment of Mobira Oy. Mobira began developing mobile phones for the NMT (Nordic Mobile Telephony) network standard, the first-generation, first fully-automatic cellular phone system that went online in 1981. In 1982, Mobira introduced its first car phone, the Mobira Senator for NMT-450 networks. Nokia bought Salora Oy in 1984 and now owning 100% of the company, changed the company's telecommunications branch name to Nokia-Mobira Oy. The Mobira Talkman, launched in 1984, was one of the world's first transportable phones. In 1987, Nokia introduced one of the world's first handheld phones, the Mobira Cityman 900 for NMT-900 networks (which, compared to NMT-450, offered a better signal, yet a shorter roam). While the Mobira Senator of 1982 had weighed 9.8 kg (22 lb) and the Talkman just under 5 kg (11 lb), the Mobira Cityman weighed only 800 g (28 oz) with the battery and had a price tag of 24,000 Finnish marks (approximately 4,560). Despite the high price, the first phones were almost snatched from the sales assistants hands. Initially, the mobile phone was a "yuppie" product and a status symbol. Nokia's mobile phones got a big publicity boost in 1987, when Soviet leader Mikhail Gorbachev was pictured using a Mobira Cityman to make a call from Helsinki to his communications minister in Moscow. This led to the phone's nickname of the "Gorba". In 1988, Jorma Nieminen, resigning from the post of CEO of the mobile phone unit, along with two other employees from the unit, started a notable mobile phone company of their own, Benefon Oy (since renamed to GeoSentric). One year later, Nokia-Mobira Oy became Nokia Mobile Phones. 2.3 Involvement in GSM Nokia was one of the key developers of GSM (Global System for Mobile Communications), the second-generation mobile technology which could carry data as well as voice traffic. NMT (Nordic Mobile Telephony), the world's first mobile telephony standard that enabled international roaming, provided valuable experience for Nokia for its close participation in developing GSM, which was adopted in 1987 as the new European standard for digital mobile technology. Nokia delivered its first GSM network to the Finnish operator Radiolinja in 1989. The world's first commercial GSM call was made on July 1, 1991 in Helsinki, Finland over a Nokia-supplied network, by then Prime Minister of Finland Harri Holkeri, using a prototype Nokia GSM phone. In 1992, the first GSM phone, the Nokia 1011, was launched. The model number refers to its launch date, 10 November. The Nokia 1011 did not yet employ Nokia's characteristic ringtone, the Nokia tune. It was introduced as a ringtone in 1994 with the Nokia 2100 series. GSM's high-quality voice calls, easy international roaming and support for new services like text messaging (SMS) laid the foundations for a worldwide boom in mobile phone use. GSM came to dominate the world of mobile telephony in the 1990s, in mid-2008 accounting for about three billion mobile telephone subscribers in the world, with more than 700 mobile operators across

218 countries and territories. New connections are added at the rate of 15 per second, or 1.3 million per day.

Acquisitions
On September 22, 2003, Nokia acquired Sega.com, a branch of Sega which became the

major basis to develop the Nokia N-Gage device.

On November 16, 2005, Nokia and Intellisync Corporation, a provider of data and PIM

synchronization software, signed a definitive agreement for Nokia to acquire Intellisync. Nokia completed the acquisition on February 10, 2006.
On June 19, 2006, Nokia and Siemens AG announced the companies would merge their

mobile and fixed-line phone network equipment businesses to create one of the worlds largest network firms, Nokia Siemens Networks. Each company has a 50% stake in the infrastructure company, and it is headquartered in Espoo, Finland. The companies predicted annual sales of 16 bn and cost savings of 1.5 bn a year by 2010. About 20,000 Nokia employees were transferred to this new company.
On August 8, 2006, Nokia and Loudeye Corp. announced that they had signed an

agreement for Nokia to acquire online music distributor Loudeye Corporation for approximately US $60 million. The company has been developing this into an online music service in the hope of using it to generate handset sales. The service, launched on August 29, 2007, is aimed to rival iTunes. Nokia completed the acquisition on October 16, 2006.
In July 2007, Nokia acquired all assets of Twango, the comprehensive media sharing

solution for organizing and sharing photos, videos and other personal media.
In September 2007, Nokia announced its intention to acquire Enpocket, a supplier of

mobile advertising technology and services.

In October 2007, pending shareholder and regulatory approval, Nokia bought Navteq, a

U.S.-based supplier of digital mapping data, for a price of $8.1 billion. Nokia finalized the acquisition on July 10, 2008.
In September, 2008, Nokia acquired OZ Communications, a privately held company with

approximately 220 employees headquartered in Montreal, Canada.

On July 24, 2009, Nokia announced that it will acquire certain assets of cellity, a

privately owned mobile software company which employs 14 people in Hamburg, Germany. The acquisition of cellity was completed on August 5, 2009. On September 11, 2009, Nokia announced the acquisition of "certain assets of Plum Ventures, Inc, a privately held company which employed approximately 10 people with main offices in Boston, Massachusetts. Plum will complement Nokias Social Location services".
On March 28, 2010, Nokia announced the acquisition of Novarra, the mobile web

browser firm from Chicago. Terms of the deal were not disclosed. Novarra is a privately-

held company based in Chicago, IL and provider of a mobile browser and service platform and has more than 100 employees.
On April 10, 2010 Nokia announced acquisition of MetaCarta whose technology will be

used in the area of local search in location and other services, financial details of acquisition were not disclosed.

Logos

(a)

(b)

(c)

(d)

(e)

(f)

(g)

a) Nokia Company logo. Founded in Tampere in 1865, incorporated in Nokia in 1871. b) The brand logo of Finnish Rubber Works, founded in Helsinki in 1898. Logo from 1965

1966.
c) The Nokia Corporation "arrows" logo, used before the "Connecting People" logo. d) Nokia introduced its "Connecting People" advertising slogan, coined by Ove Strandberg

and used since 1992.

e) Nokia's current logo used since 2006, with the redesigned "Connecting People" slogan. f) Nokia Siemens Networks logo. Founded in 2007. g) Navteq logo. Founded in 1985, acquired by Nokia in 2007.

Global Market Captured/Targeted by Nokia Corporation

In the first quarter of 2010, 314.7 million handset units were sold (worldwide) out of which Smart phones constituted 54.3 million units. Nokias cell phone market share in 2009 wasnt as big as the company previously announced. Nokia said its products accounted for 34% of the global market for cell phones, compared with 38% previously announced. The company blamed a flood of Chinese and fake phones devices often marketed under a brand close to Nokias but manufactured by others. The revision underscores the rising occurrence of so-called gray-market products, which are typically made by small Chinese start-ups and sold throughout Asia and Latin America. Knockoffs and small unlicensed suppliers phones accounted for 13% of the global phone supply, or 145 million units, last year, consultant iSuppli said last November. In 2009, their sales rose 44% over 2008, according to iSuppli. On March 12, Nokia estimated that such suppliers sold 120,000 units last year. Nokia retained a substantial lead in the worldwide smart phone market in Q2 2010, achieving a 38% market share. The vendor shipped a record 23.8 million smart phones during the quarter, representing growth of 41% on a year ago, as it focused on delivering affordable smart phone offerings to the market, such as its popular 5230 touch-screen handset, based on the Symbian operating system (OS). But Nokias market dominance is not as unassailable as it once was, with its performance outpaced by growth in the smart phone market as a whole. The smart phone market grew by 64% annually worldwide in Q2 2010. Canalys has just released a limited set of numbers for smart phones sales in Quarter 2, 2010, showing Nokia with a leading 38% market share across the world, with actual sales of its Symbian-based smart phones up 41% year on year. RIM's Blackberry was second in terms of smart phone market share, with 18%, while Apple was at 13% worldwide. Android-powered smart phones made up a lot of the 'noise' in the analysis, split across a multitude of manufacturers, but showing very significant growth, as you'll see from the table below.

Smartphone sales to end users reached 54.3 million units, an increase of 48.7 per cent from the first quarter of 2009.The rise of white-box manufacturers from Asia has also helped the others

section, as a proportion of overall sales, increase its market share to 19.20 per cent in the first quarter of 2010, up 2.7 percentage points. Smart phones accounted for 17.3 per cent of all mobile handset sales in the first quarter of 2010, up from 13.6 per cent in the same period in 2009.Nokias market share declined by 1.2% [Nokia lost its market share in India as well].

IDC India has published a report on growth of mobile sales in India (for 2009) and here are some of the relevant data points to track: The growth has more or less flat [owing to low sales figure in Q1] in total, 101.54 million units of sales were registered. Local manufacturers have grabbed 17.5% market share [from 0.9%, a year back]

Only 5 local manufacturers in 2008 and the number stand at 28 now. Nokia market share in India fell from 56.2% share in 2008 to 54.1% in 2009. Samsung Electronics Co. Ltds share rose marginally to 9.7% from 9.5%. LGs share dropped from 7.2% to 6.4%.

Of the local manufacturers, Micromax leads the race and holds a market share stands of 4.8%.

World Wide Business of Nokia

In Africa

In Asia Pacific

In Europe

 In Latin America

In Middle East

In North America

Peru
QUICK FACTS:

 Name: Republic of Peru Population: 28.2 million Capital: Lima Other major cities: Arequipa, Chiclayo, Cuzco Area: 496,225 sq miles Currency: Nuevo Sol GNI per capita: $3,450 Main exports: Fish, gold, copper, zinc, textiles, asparagus, coffee Language: Spanish (principal), Quechua, Aymara Religion: Roman Catholic (81%) Life expectancy: 71 years (men), 76 years (women)

GENERAL OVERVIEW: Over the last few years, Peru has achieved unprecedented economic growth and has significant

reduced Poverty levels. After his first term in the 1980s, Alan Garcia won the presidential elections in 2006 by focusing his campaign on the fight against poverty and ensuring economic growth. During President Garcias current administration, Free Trade Agreements have been signed with the United States, Canada, Singapore and the Republic of China and negotiations have concluded with the European Union and the EFTA countries. Talks with Japan and South Korea are expected to conclude soon. Over the past few years, Perus foreign policy has also focused on developing closer relations with its Latin American neighbors.

ECONOMY: The Peruvian economy is among Latin Americas best performers with 7.7% growth in 2006, 8.9% in 2007 and 9.8% in 2008. Despite the international crisis, the Peruvian economy grew 0.9%, surpassing the Latin American average (-2.3%). In general, recent economic growth has contributed to generating improvements in income and employment levels, which has in turn significantly diminished national poverty rates. Poverty rates at regional levels have continued to decline, and 2009 was no exception. National income from the mining boom and strong economic growth, coupled with prudent fiscal spending, has improved government accounts and reduced the public debt. Perus outstanding internal indicators and solid fiscal position have prompted various international risk classifiers to grant the country an investment grade. In 2009, the global financial crisis caused a decline in domestic economic activity due to lower foreign demand for Peruvian exports. Although mineral prices at year-end began to recover, fiscal accounts were adversely affected and the economic deficit reached 2.1% of GDP after several years of surplus. A weak economy went hand-in-hand with lower imports of goods and services, which in turn generated a surplus in the current account equivalent to 0.2% of GDP. In 2009, the government, conscious of the risks associated with the financial crisis, designed a fiscal support program for 2.3% of GNI for the two-year period of 2009-2010. In 2009, 80% of this budget was executed. The main purpose of this support was to stimulate the economy and preserve the progress made over the last few years in the fight to reduce poverty.

To cover potential financing needs in the future, the government obtained contingency loans from the World Bank and other financing resources. Peru was one of the few Latin American

countries, along with Bolivia, Colombia, Panama, and Guatemala Uruguay, which avoided economic contraction in 2009 despite the world financial crisis. According to the Doing Business 2010 report published by the International Financial Group of the World Bank, Peru is the second largest reformer in Latin America and has jumped to 56th place in the world (the country was previously ranked 65th) after implementing reforms to facilitate business openings, property registration, contract fulfillment, tax payments, employee hiring and foreign trade. These results are a reflection of the Peruvian governments willingness to promote reforms that improve the investment climate. For this purpose, a multi-sector task force was put together to identify and implement reforms in areas linked with Doing Business.

Challenges Peru still faces important challenges in terms of poverty reduction, creating a wide social safety net, protecting the environment and reducing traffic fatalities. The sustained economic growth achieved over the last six years has had a positive effect on reducing poverty and creating employment but the country still has a number of issues to resolve. These benefits need to reach a broader segment of the population. The official figures published show that poverty in the country fell from 39.3% to 36.2% between 2007 and 2008 or 3.1 percentage points. At the request of the Peruvian government, the World Bank prepared an analysis and recommendations to improve social programs. In conclusion, it was recommended that Peru make efforts to fine-tune the targeting and efficiency of its main programs, primarily health and education, which receive 80% of the spending allotted for social protection. These initiatives include conditional cash transfers (Juntos); investment funds (FONCODES); programs to create urban employment (Construyendo Per); and food assistance projects (Vaso de Leche). Government efforts should focus on improving these programs by setting clearer goals and developing mechanisms for accountability. In terms of the environment, Peru has made considerable progress over the past few years in improving the institutional and legal framework to manage environmental issues. In this regard, the government has passed laws and rules to define roles in the process to issue environmental permits and strengthen the environmental framework in key sectors (mining, energy and forests). Within this context, the World Bank has provided a Programmatic Environmental Policy Loan that backs the Governments efforts in the aforementioned areas while promoting improvements in the health sector, particularly for the poor, who exposed to the greatest risks

from environmental degradation.

WORLD BANK SUPPORT: In coordination with Alan Garcias government, a technical team from the Bank prepared a Strategic Alliance with the Country (EAP), which was approved by the Banks Board of Directors for 2007-2011. This arrangement gives the government more flexibility than the previous EAP and corresponds to Perus status as a medium income country that is developing quickly. This flexibility is reflected in the financing amounts available (up to US$3,500 million) as well as the contents and timeframes permissible for different operations.

PROJECT ACHIEVEMENTS: The World Bank offers support through a series of loans for projects involving the environment, investment, policy development and technical assistance in potable water in addition to numerous analytical studies. The focus of this assistance is to increase competitiveness, development and social inclusion. A key component in the Banks alliance with Peru is the Third programmatic loan to strengthen fiscal management and competitiveness. This project supports the countrys efforts to stimulate economic growth and continue the fight against poverty. The program also supports fiscal reform to guarantee a favorable climate for private business activity in Peru. The plan focuses on two general areas: the efficiency and quality of government spending and improving competitiveness. The Bank is conscious of the irreversible and profound impact that climate change has had on the Andean region and began financing: Adapting to rapid retreat of glaciers in the Tropical Andes in 2008. This initiative seeks to strengthen the local ecosystems and economies that have been affected by the accelerated retreat of glaciers by setting up pilot programs that experiment with alternative adaptation measures and determine corresponding costs and benefits. The Participative Management of Protected Natural Reserves (GPAN) project its one of the many conservation projects that are underway in the country. The primary objective of this effort is to contribute to preserving biological diversity and encouraging civil society and the private sector to participate in managing the countrys protected areas. With regard to the health sector, Parsalud II has continued working on the original project of the same name in efforts to reduce maternal and infant mortality, which continue to be a problem. This program also aspires to improve regional health networks by emphasizing services that are

adapted to the cultural needs of the indigenous population in terms of obstetric emergencies and healthcare for newborns. The Second Programmatic Loan for Social Reforms, which is closely tied to improvements in health, seeks to strengthen health and education services as well as social programs. This initiative provides budgetary support to increase social spending and introduce counter-cyclical measures to absorb the impact of the international financial crisis. The Peruvian Government also obtained a loan to execute the Safe and Sustainable Transportation Project, which seeks to improve conditions for passenger and cargo transport to ensure efficient and safe circulation on national roads. This is essential to ensuring that Peru is competitive. Along the same lines, the Water and Sanitation Program an alliance of multiple donors that is managed by the World Bank- seeks to ensure that the population has access to potable water and sanitation services. For example, the program currently provides support to the Ministry of Housing and various regional governments to implement Regional Integral Sanitation Plans, which provide the poorest sectors sustainable access to water supplies and sanitation services. Some of the main analytical studies that the World Bank has conducted on Peru are:
Wealth and Sustainability: Social and Environmental Dimensions of Mining in Peru Environmental Analysis of Peru: Challenges for Sustainable Development A New Social Contract Ensuring Quality Education in Peru What Can the Regional Government Do to Improve Education? Social Protection in Peru

Entry Strategy for Nokia Corporation in Peru

For entering in any country a company has to do PESTEL analysis of that country. There are many factors in the macro-environment that will affect the decisions of the managers of any organization. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. To help analyze these factors managers can categorize them using the PESTEL model. This classification distinguishes between:

Political factors are how and to what degree a government intervenes in the economy.
Specifically, political factors include areas such as tax policy, labor law, environmental

law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit good or merit bad). Furthermore, governments have great influence on the health, education, and infrastructure of a nation. Business political international's Peru Country Risk Ratings evaluate the short- and medium-term threats posed by government instability, adverse economic policy-making, deterioration in the business environment and external shocks. Peru Political Outlook Contents

SWOT Analysis for the Peruvian Market Political strengths, weaknesses, opportunities and threats facing Peru. Political Stability and Risk Assessment for Peru BMI's Risk Ratings assess explicit short and long-term risks to political stability; latest ratings, rankings and trends for Peru's risk are compared with regional and global averages. Current Administration and Policy-making in Peru BMI profiles key policy-makers and power-brokers in the Peruvian government, assessing threats to the continuity of Peruvian economic policy, and likely changes to the business operating environment through end-2018. Peruvian Foreign Policy BMI examines key trends and shifts in Peru's foreign relations and alignments with regional neighbors, the United States and Europe, focusing on external influences.

Key Benefits

Benchmark Peru's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets. Identify, evaluate and anticipate political and security risks to the business environment in Peru, and to your company's current operations and future plans. Gain valuable insights into the Peruvian government and policy-making, through BMI's specialist team of analysts and economists, and their exclusive network of private and public sector sources.

Economic factors include economic growth, interest rates, exchange rates and
the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy.

BMI provides our fully independent 5-year forecasts for Peru through end-2014 for more than 35 macroeconomic variables. We evaluate Peruvian growth, and also forecast the impact of economic management, including central bank policy, on profitability. Peru Economic Outlook Contents The Peru Business Forecast Report features explicit BMI economic forecasts for country, with supporting commentary and analysis, for end-2010, 2011, 2012, 2013 and 2014 set against Peruvian government views. Underpinning our Peru forecasts are key assumptions for the global economy through end-2014, covering growth, inflation, employment, trade and investment, interest and exchange rates in the US, Japan and the Euro-zone. Coverage of Key Economic Issues in Peru

Economic Activity in Peru Real GDP growth; industrial growth; employment growth; inflation and consumer prices; consumption (indicative wages, retail sales, consumer confidence) Fiscal Policy in Peru Current macroeconomic strategy and implementation policies; government finance (revenue, expenditure, budget balance); tax reforms Monetary Policy in Peru Interest rate trends (bank lending and deposit rates); inflation (retail price inflation, consumer price inflation); exchange rate policy in country; currency controls; influence of foreign direct investment inflows; exchange rates and foreign exchange reserves Balance of Payments in Peru Merchandise trade (exports, imports, trade balance); current and capital account balances Foreign Direct Investment in Peru Foreign direct investment approvals and inflows; the foreign investment climate Peruvian External Debt Debt profile (short- and long-term debt; public and private sector exposure)

Key Benefits

Rely upon BMI's 100% independent Forecast Scenarios for Peru and underlying assumptions - we take no advertising and are privately-owned. Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Peru, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts. Gain key insights into the current and future direction of Peruvian government economic policy

The economy of Peru is a market-oriented one and the 42nd largest in the world. The country has experienced significant economic growth in the last 15 years. Peru is considered an Emerging Market, according to the MSCI, due to political and macroeconomic stability, improved terms of trade, and rising investment and consumption. The economy is diversified although commodity exports are still the most important. Trade and industries are centralized in Lima but agricultural exports have created development in all the regions. As of 2010, GDP per capita in ppp values is almost US$10,000. Peru has a high Human Development Index score of 0.806, according to a 2008 report. The World Bank defines Peru as an 'Upper Middle Income Economy' Peruvian economic policy has varied widely over the past decades. The 19681975 government of Juan Velasco Alvarado introduced radical reforms, which included agrarian reform, the expropriation of foreign companies, the introduction of an economic planning system, and the creation of a large state-owned sector. These measures failed to achieve their objectives of income redistribution and the end of economic dependence on developed nations. Despite these adverse results, most reforms were not reversed until the 1990s, when the liberalizing government of Alberto Fujimori ended price controls, protectionism, restrictions on foreign direct investment, and most state ownership of companies. Reforms have permitted sustained economic growth since 1993, except for a slump after the 1997 Asian financial crisis. Services account for 53% of Peruvian gross domestic product, followed by manufacturing (22.3%), extractive industries (15%), and taxes (9.7%). Recent economic growth has been fueled by macroeconomic stability, improved terms of trade, and rising investment and consumption. Trade is expected to increase further after the implementation of a free trade agreement with the United States signed on April 12, 2006. Historically, the country's economic performance has been tied to exports, which provide hard currency to finance imports and external debt payments. Although exports have provided substantial revenue, selfsustained growth and a more egalitarian distribution of income have proven elusive. Peru's main exports are copper, gold, zinc, textiles, and fish meal; its major trade partners are the United States, China, Brazil, and Chile.

Social factors include the cultural aspects and include health consciousness,
population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers).

Poverty remains a serious problem in Peru. The poor population of the highlands is becoming impatient and is calling for rapid implementation of electoral promises. Apart from low social spending, the privatization policies of the 1990s, together with trade liberalization, led to high social costs (lay-off of workforce, rigid wage policies, etc.) and unemployment is at 9.5 % (as of July-September 2001). Under-employment in 1999 affected 43.5% of the urban active population. The countrys poverty levels (54.1% of the population) reflect a very uneven distribution of wealth: Peru is positioned 73rd world-wide in the UNDP's human development index. The vast majority of the poor live in the mountainous Andes or in the Amazonian region. Furthermore, 65.3% of the population in rural areas is poor, as opposed to 41.9% in urban areas. Approximately 62% of people who speak Quechua (Indian language of the Andean area) live in poverty while only 42% of the Spanish speakers are in the same situation.

Main indicators: education, health, housing The government is aiming to reform the education system in order to provide it with flexibility and institutional capacity: generous wage policy, incentives to remain on marginal areas, reform of the curricula according to regions, etc. The State is also intending to link secondary education more to employment. The signature of agreements between Superior Technical Institutes, Universities and companies will be supported in order to improve the pertinence and quality of education, as well as increase the chances of jobs. Another important initiative is the launching of the Plan Huascarn, a program by which the schools of the poorest areas will have access to Internet and will be interconnected, as a way to foster IT know-how and share information. As for the health sector, several reforms have been launched since 1995: some of these can be regarded as successful (priority for basic health, maternal and child health care, vaccination campaigns), whereas others have been strongly criticized (social security reform, policy of

forced sterilization...). Since most people in Peru (70%) rely on the public health system managed by the Ministry of Health, its good functioning is particularly important. Apart from the social security (EsSalud) system, which is only directed towards formal sector employees, public health institutions suffer from under-funding and lack of coverage, in particular in rural areas. Ensuring access to health services for the poor is, therefore, a major challenge. There has been an improvement over the past years concerning access to housing, water, sewage systems and electricity. It is, nevertheless, estimated that 1.3 million houses are currently needed (445,000 of which in Lima). Government housing policies have not been very effective (subsidized loans for housing via the Mivivienda fund have only benefited the middle class).

Technological factors

include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation.

Despite Perus liberal licensing laws and government efforts to increase competition and encourage fixed-line investment, Telefnica del Per maintains a stranglehold over the last mile and teledensity has been stagnating, even though it is among the lowest in South America. The way forward may well be through the mobile network, where mobile broadband may fulfill a need that the fixed infrastructure has been unable to satisfy. Indeed, the only truly competitive telecom sector in Peru has been the mobile one, and Perus mobile penetration compares favorably with the countrys economic indicators. Mobile number portability was introduced in January 2010. The government aims to bridge the digital divide through rural projects sponsored by FITEL, a fund that finances rural operators under the rule of less-bid subsidy.

Environmental factors include ecological and environmental aspects such as

weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.

Peru covers 1,285,216 km2 (496,225 sq mi). It borders Ecuador and Colombia to the north, Brazil to the east, Bolivia to the southeast, Chile to the south, and the Pacific Ocean to the west. The Andes mountains run parallel to the Pacific Ocean, dividing the country into three geographic regions. The costa (coast), to the west, is a narrow plain, largely arid except for valleys created by seasonal rivers. The sierra (highlands) is the region of the Andes; it includes the Altiplano plateau as well as the highest peak of the country, the 6,768 m (22,205

ft) Huascarn. The third region is the selva (jungle), a wide expanse of flat terrain covered by the Amazon rainforest that extends east. Almost 60% of the country's area is located within this region, (70,000,000 hectares / 172,973,767 acres or 700,000 km2/270,272 sq mi) giving Peru the fourth largest area of tropical forest in the world after Brazil, Congo and Indonesia. Most Peruvian rivers originate in the peaks of the Andes and drain into one of three basins. Those that drain toward the Pacific Ocean are steep and short, flowing only intermittently. Tributaries of the Amazon River are longer, have a much larger flow, and are less steep once they exit the sierra. Rivers that drain into Lake Titicaca are generally short and have a large flow. Peru's longest rivers are the Ucayali, the Maran, the Putumayo, the Yavar, the Huallaga, the Urubamba, the Mantaro, and the Amazon. Peru, unlike other equatorial countries, does not have an exclusively tropical climate; the influence of the Andes and the Humboldt Current cause great climatic diversity within the country. The costa has moderate temperatures, low precipitations, and high humidity, except for its warmer, wetter northern reaches. In the sierra, rain is frequent during summer, and temperature and humidity diminish with altitude up to the frozen peaks of the Andes. The selva is characterized by heavy rainfall and high temperatures, except for its southernmost part, which has cold winters and seasonal rainfall. Because of its varied geography and climate, Peru has a high biodiversity with 21,462 species of plants and animals reported as of 2003; 5,855 of them endemic. The Peruvian government has established several protected areas for their preservation.

Legal factors include discrimination law, consumer law, antitrust law, employment
law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products.

Peru is a presidential representative democratic republic with a multi-party system. Under the current constitution, the President is the head of state and government; he or she is elected for five years and cannot seek immediate re-election, he or she must stand down for at least one full constitutional term before reelection. The President designates the Prime Minister and, with his advice, the rest of the Council of Ministers. There is a unicameral Congress with 120 members elected for a five-year term. Bills may be proposed by either the executive or the legislative branch; they become law after being passed by Congress and promulgated by the President. The judiciary is nominally independent, though political intervention into judicial matters has been common throughout history and arguably continues today. The Peruvian government is directly elected, and voting is compulsory for all citizens aged 18 to 70. General elections held in 2006 ended in a second round victory for presidential

candidate Alan Garca of the Peruvian Aprista Party (52.6% of valid votes) over Ollanta Humala of Union for Peru (47.4%).Congress is currently composed of the Peruvian Aprista Party (36 seats), Peruvian Nationalist Party (23 seats), Union for Peru (19 seats), National Unity (15 seats), the Fujimorista Alliance for the Future (13 seats), the Parliamentary Alliance (9 seats) and the Democratic Special Parliamentary Group (5 seats). The Peruvian government is closely allied with the Catholic Church. Article 50 of the Constitution recognizes the Catholic Church's role as "an important element in the historical, cultural, and moral development of the nation." Catholic clergy and laypersons receive state remuneration in addition to the stipends paid to them by the Church. This applies to the country's 52 bishops, as well as to some priests whose ministries are located in towns and villages along the borders. In addition each diocese receives a monthly institutional subsidy from the Government. An agreement signed with the Vatican in 1980 grants the Catholic Church special status in Peru. The Catholic Church receives preferential treatment in education, tax benefits, immigration of religious workers, and other areas, in accordance with the agreement. Peruvian foreign relations have been dominated by border conflicts with neighboring countries, most of which were settled during the 20th century. There is still an ongoing dispute with Chile over maritime limits in the Pacific Ocean. Peru is an active member of several regional blocs and one of the founders of the Andean Community of Nations. It is also a participant in international organizations such as the Organization of American States and the United Nations. The Peruvian military is composed of an army, a navy and an air force; its primary mission is to safeguard the independence, sovereignty and territorial integrity of the country. The armed forces are subordinate to the Ministry of Defense and to the President as Commander-inChief. Conscription was abolished in 1999 and replaced by voluntary military service. The rule of law was seriously weakened during the 1990s. This tendency is one of the effects of the antiterrorist policy, which meant that many members of the military and the police committed abuses in the name of the pacification of the country. In addition, the corruption scandals at state level, which are still being clarified, testify to the existence of a two-speed justice. Lastly, the legal sector is affected by serious technical and budgetary deficiencies, especially at the level of the legal-penitentiary interface, and by the lack of development of alternative conflict resolution mechanisms such as the district court and conciliation. This contributes to a general obstruction in the system of administration of justice. The present government is committed to re-establishing the rule of law, to enter into an in-depth process of state reform and to fight against corruption, as shown by the creation of an anti-corruption tsar. Significant improvements in the field of Human Rights and fundamental freedoms have been noted over the year 2001, particularly the will to deal with the abuses committed during the antiterrorist fight (creation of a Truth and Reconciliation Commission) as well as the law banning torture, the law eliminating "faceless courts", the cancellation of military tribunal sentences, and the standards for the freedom of expression.

The current Constitution came into effect in 1993 under Ex-President Fujimori. While allowing for a centralization of power and reducing the strength of the legislative branch (the Parliament passed from a bi-camera system to a single chamber, the Congress), it incorporated the respect of Human Rights, more rights for indigenous people and democratic values. The current government has decided to change the 1993 Constitution in order to favor decentralization and the State reform process. This might lead towards a partial or full re-establishment of the 1979 Constitution. Presently, the Government is carrying out a deep reform of military forces and the Police. The last electoral process highlighted some weaknesses in legislation, such as a complicated election system for a population that is illiterate in many rural areas, the non-recognition of the multi-cultural nature of the electorate, the absence of a regulation governing political parties and the differences of criteria between the institutions responsible for organizing elections. Another peculiarity of the electoral legislation lies in the fact that vote is compulsory but the military and the police cannot vote.

So, for Nokia to enter in Peru it has to analyze all the above factors. Along with it they have to analyze the strengths, weakness, threats and opportunities in the Perus market.