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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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