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Transcript of Nokia-Microsoft Alliance
By Sandhya Jhoottee, David Tse, Valerie Sookee and Nitish Khulpateea
Founded in 1975 by Bill Gates
Aug. 12, 1981 IBM introduces its personal computer with Microsoft’s 16-bit operating system, MS-DOS 1.0
Nov. 22, 2005 Microsoft launches Xbox 360
June 27, 2008 Bill Gates transitions from his day-to-day role at Microsoft to spend more time on his work at The Bill & Melinda Gates Foundation
Nov. 10, 2010 Microsoft launches Windows Phone 7
Sept. 3, 2013 Microsoft announces decision to acquire Nokia’s devices and services business, license Nokia’s patents and mapping services
The Nokia-Microsoft Global Alliance
What can be learned from applying chapter theories to this case?
Founded in 1871
In 1967, had five businesses: rubber, cable, forestry, electronics and power generation.
1987: Launches first phone. The Mobira Cityman.
1992: Sells non-mobile divisions and launches first digital GSM phone, the Nokia 1011
2003: Basic 1100 phone launched. Goes on to sell 250 million units and become the world's most popular consumer electronic device
2011: Abandons Symbian mobile phone operating software for the Windows platform instead
2013: Launches the Lumia 1020 boasting a 41 megapixel camera.
Compare & Contrast
Evaluate & Assess Product Lines & Market Shares
Deresky, H. (2014). International Management: managing across borders and culture (Global Ed). Harlow. Pearson Education Limited
Lee, Timothy B. "Here’s why Microsoft is buying Nokia’s phone business." The Washington Post. September 2013. http://www.washingtonpost.com/blogs/the-switch/wp/2013/09/03/heres-why-microsoft-is-buying-nokias-phone-business/
Microsoft official website. Accessed 3 October 2014 http://news.microsoft.com/facts-about-microsoft/
Nokia website. Accessed 3 October 2014 http://company.nokia.com/en/about-us/our-company/our-story
source: Facts About Microsoft
Reasons and motivations behind the alliance:
To share the costs and risks of research and development of new products and processes.
"To gain rapid entry into a new or consolidating industry and take advantage of synergies" (Deresky, 2014)
Microsoft will be able to compete effectively with Apple and Google's mobile ecosystems, through this vertical integration. (Lee, 2013)
Guidelines for a successful alliance :
1. Choose a partner with compatible goals and objectives with whom through synergies of combines markets, technologies, etc.
2. Have complementary skills, products, and markets.
3. Work out how shared technology will be handled.
4. Recognise that most alliances are short-term and will break up once one partner feels it can go it alone. (Deresky, 2014, p. 244)
2011- announce the alliance in development of smartphones
opportunity to grow as was losing market share, because of aging technology.
can introduce windows phone technology.
global expansion for the companies.
can compete effectively in growing industry.
Nokia Lumia with Microsoft Windows technology
In April 2014 Microsoft takeover of Nokia's devices and services business (US$7.2b acquisition)
Both have extensive global operations
Both have extensive global operations
Large historical hardware and software dominance (but a falling share)
Large software dominance in PC and (to a lesser extent) other platforms
Nokia Product lines
of the alliance
Table of Content
# Summary of case study+ Identification of relevant theory (Question 4)
Majority of Nokia’s income
1. Win-win situation leading to synergy.
2. strong platform for Microsoft as Nokia is one of biggest brand in Indian Mobile Industries with 27.7 % of market share.
3. Strong Supply chain for shipment.
4. Sale of more than 80% of windows phones, on it's own 4 % of market share.
5. Nokia's Lumia Brand is making handsome money.
1.Both companies are facing shrink in their market.
2. Deals too late when the market is already almost captured by Google's Android.
3 They lag behind to market leaders, they do not attract developers.
4 In the computer world, Microsoft is monopoly but in smart phone sector, developers goes for Android and ios.
1. Great opportunity if resources are utilized in an optimum way.
2. Change in core system of microsoft system to allow for new hardware.
3. Working on incoming image to improve Nokia Lumia 1020 with its 41 mega pixel camera.
4. Nokia is still profitable in India- Big market.
1. Cut throat competition.
2. Losing market share to market leader Samsung.
3. Micromax and Karbon are attracting more youth with sensitive price in India.