Next to the company Nokia, a rubber company and a cable manufacturer independently began their operations.

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Finally, in these three companies merged to create the today known Nokia Cooperation. The Cable com- pany was needed for the growing need of power transmission as well as telegraphs and tele- phone networks. With the acquisition of the Finnish Cable Works the roots for the telecom- munications was first paved. Puls-Code-Modulation PCM transmission equipment, Nokia already made in the early six- ties and seventies a strategic and significant move towards to digital and future technologies.

During the eighties Nokia, which was already formed in a diversified company, further diver- sified into several other sectors, including businesses in machine engineering, chemicals, light bulbs, capacitors, aluminium, plastics and power plants. The intention of this unrelated diver- sification strategy was to grow fast, because at this time, it was believed that diversification can offer protection against economic fluctuations.

Mobira, Salora, Televa and Luxor of Sweden. Again and again Nokia has seized opportunities to enter new and exciting businesses characterized by high risks but great promise to growth. Since Nokia was listed on the Helsinki Stock Exchange. Already in the beginning of the original company, as a forest industry, the international worldwide efforts were taken. Nokia continued its aggressive acquisition activities, also with foreign companies, in order to learn and get success to foreign markets. Through acquiring the data system division of Ericsson in made Nokia to the largest information technology company in Scandinavia.

The reason of such diversified conglomerates in Finland was the fact that Finland is a small marketplace and a small country.

If finish organizations want to stay in Finland they have to grow by finding new sectors and business areas. Next to the businesses of Nokia, it has to be noted, that in the sixties and the seventies a wave of acquisition of other companies worldwide took place as well.

At this time the overall trend resulted in unrelated diversifications and conglomerates. During the deep recession at the beginning of the s, as well as the chaotic and unsecure circumstances within the management of Nokia, both the telecommunications department and the mobile phones department were the supporting two pillars of the company. Next to the repositioning of the business areas, there was also repositioning in terms of global growth recorded.

Diversification Strategies: Related and Unrelated Diversification

The new strategy of Ollila was successful. The huge growth in demand for mobile technology was significant. One of the highlights in the year were that the market capitalization grew to FIM billion in Add to cart. Table of content 1.

Introduction 2. Diversification 3. A brief history of Nokia 4. Facts and Figures of Nokia in and 7. Conclusion 1. Introduction Nokia Cooperation is the world leading supplier of mobile phones and a titan of European and world technology. Diversification First of all it is necessary to find a definition of diversification in order to analyse the business strategies of Nokia.

Diversification strategy

Merriden , p. Aaker , p. About Nokia , p. Laitinen , p. Skip to search form Skip to main content You are currently offline. Some features of the site may not work correctly. Ogollah Published Business Journal of business management Corporate diversification is one of the fundamental strategic alternatives available to organizations to sustain growth and search for greater profits. Companies whose products are threatened by the environmental uncertainty or in decline phase of their life cycle curve can prefer to engage in diversification to overcome the risk arising from current industries.

Expanding its product line and activities to different sectors where the environmental uncertainty is reduced and, profitability is… Expand. Save to Library.

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What is Diversification Strategy? (Definition and Examples)

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