Nokia Case study – First a recap video on the advantages and disadvantages of TNCSs<\/p>\n
Map of Nokia’s operations
\nPicture
\nReasons for where it is located:
\nLocating business to minimise costs:
\nTNCs such as Nokia have branches in many countries because they want to reduce costs. With lower costs, their profits are higher. TNCs such as Nokia keep costs low by
\nopening factories and offices in regions of the world that have:
\nLow labour costs
\nCheap land or building costs
\nLow business rates(the tax paid by a company)
\nLocating business to be close to the customer:
\nAnother reasons why Nokia is constantly expanding its range of factories and offices is to be close to its customers, who are spread right across the globe. Nokia’s products have massive appeal. Nokia estimated that the mobile phone market had around 2.2 billion people in 2005 and this was expected to rise 4 billion in 2009. Growth in mobile phone
\nownership and subscription has been particularly strong in Newly Industrialising Countries (NICs). As consumers in LEDCs have become wealthier, Nokia has
\nexpanded its business into Asia, Africa and South America. It has, therefore, opened new sales offices in many NICs, located closer to these new customers.
\nDifferent jobs in different locations:
\nNokia employ a wide range of staff. Some are highly qualified or skilled, such as business managers or R&D staff. Other staff, such as some assembly workers or sales stuff, do not require high-level qualifications or as much training. So, like many other MNCs, Nokia has chosen to locate the assembly of basic products in their range in NICs where wages are lower. However, the more highly trained R&D staff tend to work in Europe. Here, Nokia develops new products, such as hand-held devices capable of filming video, playing games and surfing the web. These devices use the latest technology and therefore need more highly trained staff to develop and produce them. These high-tech products are also aimed at wealthier consumers, so it makes sense to make them in Europe.
\nLocal impacts
\nPollution caused by the factories – lower standard of
\nregulation
\nJobs for local people
\nLocal people can learn new skills
\nDevelopment of local infrastructure
\nNational impacts
\nDevelopment of mineral wealth
\nNew energy projects such as dams built
\nLarge-scale pollution in lakes and rivers
\nRegional impacts
\nBy manufacturing in Europe Nokia can avoid having to pay tariffs in the EU
\nImprove the quality of life of people living in the region<\/p>\n","protected":false},"excerpt":{"rendered":"