Diversification Strategies Case Study

Nokia Diversifying into Services: Rediscovering its Business Portfolio

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Abstract:
In 2007, Nokia, the world’s largest mobile phone manufacturer held 36% of the global market share. Driven by trends of technology convergence and rapid growth across market for internet services, Nokia decided to re-define its business portfolio to create a new business group around Internet services and software. While this transformation helped Nokia in exploring new growth avenues in the global mobile telecommunication market, analysts remained skeptical regarding the success of Nokia's transformation from a manufacturer of wireless hardware into a provider of Internet services. Further the fact that such a move would make Nokia confront big players like Google and Yahoo in the internet industry posed serious concerns. Whether Nokia would succeed in transforming its business portfolio without loosing its focus on its core mobile phone business was yet to be seen.

Pedagogical Objectives:

• To understand the concept of ‘technological convergence’ in the mobile communication industry
• To analyse the evolution of Nokia’s business portfolio
• To understand the competitive dynamics of global mobile communications industry
• To analyse the shifts in Nokia’s growth strategy and its implications.

Keywords : Nokia; Mobile Telecommunication Market; Diversification Strategies Case Study; Mobile Handset Industry; Industry Convergence; Technology Convergence; Business Portfolio; Diversification; Core Competencies; Change Management; Organic Growth; Inorganic Growth; Internet Services; Growth Strategy; Motorola; Samsung