Essay on Asia and Huge Subsidies Nokia

676 Words3 Pages
Nokia: Business Interests Vs German Pressures:

What are the trends in the mobile handset industry?
Several years ago, the handset industry had healthy margins, but since 2001 the situation changed. Problems such as cost pressure, weak profitability and ongoing consolidation began to appear. The growth was getting slower. The U.S. and Europe markets were saturated. What to do then? Industry focused towards markets of Middle East, South Asia, Africa, China and India, where there was a high growth.
Therefore, we can summarize the situation of the industry as follows: * Outsourced manufacturing of handsets * Demands in the developed markets like US & Europe has saturated * Significant growth has been noticed in the Middle
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I´m sure that no country likes to see Nokia (or any other multinational) closes its plant affecting 2.300 workers and their families, and …of course, because all this the overall economic development of the region get affected.
Also, Nokia´s decision was condemned because the Bochum plant had never operated at a loss. In 2007, the plant had made a €134 million operating profit. There was no clear explanation.
So… for me the German backlash was super justified because if all this were not enough, the Nokia authority had failed to explain clearly the reason for the closure of the plant to the employees. No reason!!
Also, Nokia didn´t want to discuss with the German authorities to try to find a midway to continue the operations. Germany wanted to talk, but Nokia didn´t give them the chance. For me, Nokia's silence is not justified

How can nation make themselves more competitive?
I think that, if a nation wants to be really competitive, they must think about: * Have less bureaucracy. Try to do it friendlier and easier. * Have a cheap labor cost * Supportive government with subsidies to establish a business * Lower corporate taxes
We can summarize in one sentence:

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