nokia microsoft (1)

7/23/2019 Nokia Microsoft (1)

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lliance between

Nokia and Microsoft


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Alliance and Acquisitionbetween Nokia and Microsoft

To build a new global mobileecosystem for smartphones through the

Windows Phone platform :


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Alliance and Acquisition betweenNokia and Microsoft

ncreasing manufacturing capacity

!ri"ing global customer demand of theWindows Phone de"ices

#urther integrating products and ser"ices ofNokia and Microsoft

The ultimate ob$ecti"es :

To growing the market share

To secure and increase the portion ofsustainable re"enue


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!unning %s &' Model

The (&') or (eclectic) approach to the study offoreign direct in"estment *#!+ was de"elopedby ,ohn !unning

Three potential sources of ad"antage


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&wnership Ad"antage

#irms in"esting abroad own an asset that gi"esthem competiti"e ad"antages

-ome of competiti"e factors are monopolistad"antages that the company has in form of

pri"ileged

./ : access to scarce natural resources0 patentrights0 brand name

&n the other hand0 some ad"antages come frominno"ation acti"ities0 as for e/ample0 technology0knowledge broadly


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'ocation Ad"antage

#irms seek a production location thatoffers them ad"atage

Three type of location factors : .conomic 0

Political 0 -ocial 0 1ulture Ad"antage


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'ocation Ad"antage

Economic advantages: the quantities and qualities ofthe factors of production0 transport andtelecommunications costs0 scope and si2e of themarket0 etc3

Political advantages: the common and specificgo"ernment policies that influence inwards #oreign!irect n"estment flows0 intra4firm trade andinternational production5

Social, cultural advantages: psychic distancebetween the home and host country0 language and

cultural di"ersities0 general attitude towards foreignerant the o"erall position towards free enterprise5


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nternali2ation Ad"antage

#irms try to internally capture the ad"antageof foreign asset ownership

6educe in transaction cost

1ontrol o"er operations

A"oidance of tariff7s and other barrier


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Strong brand name in the global market Nokias highly qualified personnel have teamed up with

Microsofts experts

Strong finance position (Net revenue of !" #$ billion and

operating profit of !" $%& billion' Sale products in more than $) countries

!sing Microsoft*s software for its smartphones

!unning &'*&wnership Ad"antage+


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'ow4cost highly4skilled in 8iet Nam

!unning &' *'ocation Ad"antage+


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+olitical stability

,heaper production costs

-overnment policies. aimsat /)0 of the domesticindustrial production ofhigh1tech segment

'ocation Ad"antage


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+roviding strong platform to Microsoft for it*s 2S

Saving deal for Nokia

Making stronger supply chain for shipment 3ring better integrate Software and 4ardware

5he success of the Nokia6Microsoftalliance from the Nokia perspective


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Dunnings OLI model - Ownership Advantage

#amous brand name

Nokia Maps0 Nokia de"ices and ser"ices 9uman resource from more than ; countries ofNokia

5he success of the Nokia6Microsoftalliance from the Microsoft perspective


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#actory0 design department0 production de"elopmentdepartment0 marketing and sale department of Nokia

Market segments *mid4range mobile phone market+

; areas in ; countries

!unning?s &' model 4 'ocation Ad"antage


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6educe promotion cost for Microsoft

6educe the cost of implementing in"entioncopyright0 in"entions

!unning?s &' model 4 nternali2ationAd"antage


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5he success of the Nokia6Microsoftalliance from the Microsoft perspective

Windows phone @Merger Nokia and Microsoftncreased competiti"eness of Microsoft./panding the smartphone market


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nokia microsoft (1)

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