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International Strategy Advantages and Drawbacks
The given case study discusses the success and the decline of the Finnish multinational telecommunications company Nokia. This case makes us understand how a company could benefit from going global as well as suffer from it. For example, Nokia managed to achieve lower operational costs by opening plants in some Asian countries and closing a less efficient factory in Romania. The strong point of doing business internationally is that an entrepreneur might build a factory in any country he finds the most efficient in terms of regulations to reduce operational costs such as rents, and wages and pay fewer taxes. Besides, according to the presented case, in 2011, Nokia sold its wireless patents to the Canadian Mosaid Technologies. This decision allowed to transfer of the expensive process to another corporation and still obtain revenues from patent holders rights.
At the same time, as it has already been mentioned, an international strategy might bring certain drawbacks. The case of Nokia shows that a company that decides to become international should be ready to innovate quickly if it wants to sustain market competition. Nokia failed to develop at the same speed as Google and Apple and thus lost 75 percent of its market. It could be suggested that the failure of Nokia came as a result of the complication of the process of strategic management.
To conclude, an international strategy might also lead to challenges caused by different languages, religions, cultures, and values, problems with quality, protectionism, and tariffs, and the threat of natural disasters or terrorist attacks. Although Nokia escaped these issues, it faced difficulties with development speed and had to catch up with other large corporations instead of being a market leader. The experience of recent years shows that the drawbacks of Nokias global strategy outweigh the positive sides.
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