Global Business Strategy: Nokia's Outsourcing Advantage

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Register to read the introduction… Their outsourcing agreement with Hewlett-Packard will allow the American company to manage the IT infrastructure and operations for Nokia's network’, (D.C.Charma, 2004). Furthermore Capgemini have been made responsible for order management services. Outsourcing is vital to Nokia’s success as it allows the company to concentrate on vital factors such as R&D, turning to selected suppliers for their special skills. The global business co-ordinates activity’s in supplier countries carefully in order to achieve their …show more content…
In consumer countries such as China and India price elasticity of demand is high due to low per capita income and the emergence of low cost substitutes. Nokia seeks to gain competitive advantage by offering tailored products at cheaper prices as expensive and highly innovative models will not sell. Developed customer countries such as the UK & US have a lower price elasticity of demand paired with a high elasticity of substitution and expectation, therefore Nokia makes innovation and first to market a blueprint of its success. The culture in more economically stable customer countries is for the best and most innovative products therefore Nokia combines both cost effective and cutting edge technology to reach all consumer natures …show more content…
In 2007 Nokia announced agreements on a joint venture with German engineering group Siemens, with headquarters conveniently located geographically alongside headquarters in Espoo, Finland. The JV itself targeted ensuring Nokia were first to market in providing the global community with the most advanced and progressive telecommunications equipment available. Evaluating the benefits of a JV for Nokia, advantages are gained through shared resources and technological input, significantly reducing a products cost and time to market. Finland's Nokia and Germany's Siemens said they expected to make savings of €1.5bn (£1.025bn) annually by 2010. They also expect to cut 10 to 15% of the combined businesses' 60,000 staff over the next four years, (M, Tran,

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