Strategic management ppt merger example

1. Strategic Management
Group Members

2. Nokia getting disconnected while
connecting people…!!!!

3. BRIEF HISTORY OF NOKIA
1865 Wood Pulp Mill
1871 Share company
1898 Rubber Business
1902 Electricity
1967 Nokia Corporation
2013 …….

4. STRENGTHS OF NOKIA
• Largest network of selling & distribution
• Experience
• Wide range of products for all class
• Strong customer relation
• Effective advertisement and market
• Communication

5. MARKET SHARE
76.1
Market Share In %
Nokia Samsung
38.5
23
5.9
25.6
41.8
2010 2011 2012 March
Gfk-Nielsen for
March 2012

6. MICROSOFT NOKIA DEAL
• Microsoft buys Nokia phones, patents for $7.2B
• Proposed price consists of $5 billion for the Nokia unit that
makes mobile phones.
• Another $2.2 billion will be paid for a 10-year license to use
Nokia's patents, with the option to extend it indefinitely.
• Microsoft hopes to complete the deal early next year.
• About 32,000 Nokia employees will transfer to Microsoft,
which currently has about 99,000 workers.

7. REASON FOR SELLING
• Net operating loss
• Loosing Market Share
• Complacency
• Lack of innovation
• Symbian to windows

8. COMPETITOR (SAMSUNG) GOT IT RIGHT
• They understand customers changing behavior
• Variety of Smartphone's for different segment
• First to launch what many called an iPhone look alike
• Placed its bet on Android OS for Smartphone

9. WHY MICROSOFT BUYS IT
• Mobile is an area of tremendous potential
• Nokia's Lumia smartphones have run on Microsoft's
Windows software
• Microsoft knows that he has that potential to surpass big
giants like Samsung and Apple
• Hardware and software for their phones they weren’t
working together therefore those transaction costs
getting in the way there ,by being owned by the same
company those costs will be reduced and thus better
phones will be made

10. Steve Ballmer
“It's a bold step into the future — a win-win for
employees, shareholders and consumers of both
companies”

11. CONCLUSION
 Nokia has taken the right decision because when the
company is not doing well in the market it is very bad
strategy to be in the market only for the name.
 Microsoft has also taken the right step by purchasing
Nokia mobile unit as first it was only supplying OS to
Nokia’s smart phones but now it can manufacture and
use own OS and can concentrate on the innovation of
the cellular phones.