microsoft-nokia deal (1)

8/13/2019 Microsoft-Nokia Deal (1)

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Microsoft-Nokia Deal

Prepared By: Group-C10

12022 Akash T. K

12050 Sriraksha S.

12096 Rajyaguru Omkar

12121Abhishek Agarwalla12166 Pappu Yadav


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NOKIA

Founded by Frederick K Idestams in 1865 Mobile devices with services and software

Enable people to experience music, navigation,video, television, imaging, games, business mobilityand more.

By 1998 Nokia became the worlds biggest mobilemanufacturer

In 2005 Nokia reached the landmark of selling overone billion phone

In 2010 Smart phone competition hit the giant In 2013 Microsoft acquired Nokia phone business


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MICROSOFT

Founded by Bill Gates and Paul

Allen in Albuquerque in 1975

Develops, manufactures, licenses, and

supports a wide range of software products

for computing devices

Recent Activity

On May 10, 2011, It acquired Skype

Communications, for US $8.5 billion

Sept 3, 2013Microsoft acquires Nokia for

$7.2 billion


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Microsofts need to acquire Nokia

Nokia had plans of using the android operatingsystem for its Lumia

In order for the windows phone to see its survival inmarket, Microsoft had to ensure Nokias survival

Transaction cost

Eliminating duplication

Logistics, Manufacturing and Supply Chain

Talent acquisition


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Pre-NegotiationCurrent Resources

Nokia Largest distribution network

Strong brand image

Good R&D skills

Diversified business units.

Microsoft Financial strength

huge customer database from its diversified product portfolio

Goal

Both the companies share the common goal of increasing the

sales of their products and market share In the second quarter of 2013, Nokia shipped just 7.4 million

Windows Phones compared with 31.2 million iPhones and 185million Android smartphones

Increasing the sales of Windows smartphone from theefficiencies that should flow from the integration of hardware

and software


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Interest and needs

Microsoft Faster innovation

Increased synergies Unified branding and marketing.

Nokia Accretive earnings

Strengthening its financial position

A solid basis for future investment in its continuing businesses.

Alternatives

Microsoft has few alternatives given its almost completereliance on Nokia for Windows Phone devices. Other

possibilities for Microsoft could be:- Developing their own hardware devices. Approaching other hardware makers to sell windows platform

devices

Nokia can also explore other possibilities, including thepossibility selling all, or part, or itself to other interested

parties


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Negotiation Style

Collaborative as the deal will create a win-winsituation for both buyer and seller and is beneficialfor both the parties

Market share and profitability is expected to boost

up for both the companies Stephen Elop, Nokias chief executive, will step

down to become head of the mobile phonebusiness at Microsoft

Around 32,000 employees would transfer toMicrosoft, a new data centre servicing Microsoftconsumers would be built in Finland, with aninvestment of $250m over the next few years


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Key reason behind the deal: Nokiadeveloping Android smartphones

Why Nokia as a best choice?

Penetrating from software to hardware

Acquiring nonsmartphones unit

Synergies

Nokia will continue to be a company

Government Policies


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ZOPA


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ZOPA

It is known that Microsoft will makeavailable to Nokia about1.5 billion($1.97bn) in financing in the form ofthree payments of500 million ($659m)

from overseas resources. Nokia shareholders are expected to vote

on the deal in an extraordinary generalmeeting on November 19 this year.

Any further information from the Nokiaside can be known after that only. ThusZOPA can be known after furtherinformation is declared


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BATNA

BATNA is seen as a safety net for theMicrosoft in case of the deal with Nokiafails, we need to look at what are thebest alternatives available for the

Microsoft considering the currentsituation.

According to Bloomberg, Microsofts

operating systems unit head TerryMyerson approached HTC about usingthe Windows Phone OS as an alternativeoption on handsets that traditionally use

Google's Android.


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BATNA

In this case we can see may be HTCaltogether a new company in target forMicro

Very hard to know the true BATNA forthe company as the parameter of thecompany to choose the company to

buy or acquire requires considerationof lots of parameters. But this is highlyunlikely.

microsoft-nokia deal (1)

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