History & Marketing Strategies of Nokia Brand

Company name – Nokia
Founder – Fredrik Idestam

Nokia was founded by Fredrik Idestam in the year 1865. He was a mining engineer of Finnish-Swedish ancestry and established a pulp mill in Tampere, Finland. Since then, the company has slowly but surely come to the forefront of the Finnish economy to the point of it becoming a source of national pride.

Nokia dominated the global telecommunications market in the late 1990s and early 2000s, its highest point being acquiring the 5th highest spot in terms of global brand value during 2009, according to Interbrand, a global brand consultancy firm. 

Nokia is currently headquartered at Espoo, Finland and had earned total revenue of about 23.1 billion Euros in 2017. It has a global presence with over 100,000 employees working at its two main divisions, Nokia Networks and Nokia Technologies.

It also has several important subsidiaries like Nokia Bell Labs, Alcatel Mobile and Nokia Growth Partners (NGP) Capital and others synergizing to drive its growth. 

The Beginning

The story of Nokia begins in 1865 with Fredrik Idestam starting a ground wood pulp producing mill in then Finland Grand Duchy, which as a part of the Russian Empire. In 1868, he further expanded by building another mill in the town of Nokia near the Nokianvirta River due to the hydropower resources being better than Tampere. 

Along with his eminent statesman friend Leo Mechelin, Idestam founded Nokia Ab (Aktiebolag – Swedish for corporation or limited company) in 1871 by merging his business resources. 

Thus, both Idestam and Mechelin are often credited as the co-founders of Nokia. During the late 1800s, Mechelin wanted to further expand into electricity production, but was opposed by Idestam, the current chairman. So, after his retirement in 1896, Mechelin became chairman and was able to persuade the shareholders of Nokia Ltd. to venture into the electricity business by 1902.

The Finnish Rubber Works, or “Suomen Gummitehdas Oy” in local language, was founded by Eduard Polon in 1898 for manufacturing rubber goods like galoshes (cover for leather shoes to keep them dry) and e established his production units near the town of Nokia and also used its name for branding purposes. Meanwhile, Nokia Ad ran into financial troubles after 1st World War and was subsequently bought by Polon’s company. He also acquired another manufacturing unit named Finnish Cable Works or “Suomen Kaapelitehdas Oy” in 1932. This company produced electric cables, telegraph and telephones. 

For the next 30 years, these three units operated under Eduard Polon and continued production individually. The supply of electric cables to Soviet Union post- 2nd World War was a major undertaking for them, forming a basis for later business. Thus Polon was the visionary entrepreneur behind the creation of Nokia Corporation as it is known today.

The Road to Success

The formal merger of the three companies – Nokia Ab, The Finnish Rubber Works and The Finnish Cable Works happened in the year 1967. It was under the leadership of Eduard Polon, the managing director and Chairman of the company and Johan Verner Weckman, the President that these three corporations prospered and later became a global business leader.

Johan Verner Weckman became the first Olympic Gold Medalist for Finland when he won at the 1908 London Summer Olympics in Greco-Roman Wrestling Light Heavyweight category. 

Subsequently, he studied engineering and joined Finnish Cable Works in 1921 and rose to serve as its executive director in 1955, even becoming its president in 1963. Thus, after the merger, the new entity was renamed Nokia Corporation in keeping with its previous branding and its location near the town (Nokia) and river (Nokianvirta) carrying similar nomenclatures. 

The newly formed company continued building upon its previous experience and expertise, manufacturing rubber boots, bicycle and car tires, paper pulp products, cables and added modern electronic products like televisions, computers, generators, capacitors, automated machines using robotic technology and even military communications equipment and technology. As there was a steady demand for these sophisticated products, a separate electronics division was formed within the corporation in 1962.

By the 1970s, Nokia was producing future-ready technological products like digital switches, which became the mainstay product for their networking division. In 1987, the state-owned Nordic Mobile Telephone (NMT) sold its shares to Nokia which resulted in the formation of Nokia Telecommunications by 1992. Similarly, Salora, a Finnish television and radio receiver manufacturer since 1945, merged with Nokia in 1984 to form “Nokia-Mobira Oy” which produced mobile handheld devices.

This entity was later renamed to Nokia Mobile Phones. Thus the company was primed to expand globally on the back of the “telecom bubble” that engulfed the world in the 1990s and 2000s with its years of expertise since the beginning of mobile telephony along with proper infrastructure and visionary leadership showing the way towards global market domination.

Marketing Strategies

There were several key marketing strategies that led to Nokia Corporation’s domination of the mobile telecommunications market of the new millennium.

-Since the company’s inception, the focus had always been to produce high-quality technological products at affordable rates. To that end, the early Nokia devices were durable, rugged and withstood rigorous environments, thus catering to the widest range of customers including cutting-edge military gadgets to products meant for mass-market usage

-The organization was able to build a hugely loyal global customer base during its early days by providing products that were comfortable, functional and easy-to-use, thus the publicity among users were always positive leading to more customers

-Nokia also formed several strategic partnerships, made timely acquisitions and assimilated several key technological companies of the times within its corporate structure. Organizations such as Siemens AG merged their mobile and fixed line telephony business with Nokia with positive effects.

Another key acquisition in 2008 by the company was Symbian Ltd., the creators of Symbian Operating System for mobile devices, the software that runs Nokia Smartphones. Alcatel-Lucent, a French Telecom company with global presence was purchased by Nokia in 2015, thus adding to their already impressive market value

-Timely sale of its loss-making division to competition also somewhat saved its declining fortunes and allowed the company to continue production and save its brand value 

 

Conclusion

To conclude, Nokia Corporation is a household name in the global market today. Anybody using telecom services in today’s world is acquainted with this global technological behemoth. It is currently in the process of re-inventing itself; Nokia has too much of experience, expertise and market knowledge to be always on the declining path.

With its sprawling headquarters at Helsinki, Finland and offices all over the globe, Nokia is waiting at the cusp of regaining its former heights of business glory.

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