Case Study: The Acquisition Of Nokia Products

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Reducing competition In addition, acquisition helps reduce competition. In fact, one of the main reasons behind the merging and acquisition of Nokia devices and services was to reduce competition from apple and Samsung. Microsoft had ventured into tablet manufacturing but had to wait for long before Nokia released its products, and this meant that its competitors’ products reached the market first. The implications of this are that when Microsoft presents its products customers have already bought the competitors’ products and thus Microsoft makes losses. By acquiring the devices section of Nokia, it means that it has control over the release of its products from the company and thus can be at par with its competitors (Kumar, 2012, p.56).…show more content…
By having, a global expansion strategy Microsoft will reap many benefits such as new sales and profits. International expansion provides a company with opportunities for new sales and profits especially in cases where the home market profitability is poor. Microsoft wanted to surpass competing companies by making profits in almost all sectors related to software and computers (Liu, & Meng, 2003, p.39). Acquisition of Nokia devices will increase its worldwide presence and this translates into more profits. It will drive its sales volume high because of the diversification of the products. To customers international expansion helps lower prices of the products because of economies of scale the company derives from international trade. When a company has a worldwide presence, it places its industries in countries that charge low-income tax on profits (Lindholm & Keinonen, 2003, p.30). They, therefore, can provide their products at a relatively lower price than their locally based competitors can. This is a benefit to the customer, and it drives sales volumes high and thus the realization of more…show more content…
The strategy is product differentiation and provision of the product at customer friendly prices. For instance, differentiation of the Lumia range of products is in such a way that they meet the demands of the home market in the country of operation. In the US and other developed countries, they sell specialist phones and devices but at a high price (Lundqvist, 2013, p.45). They have others devices for developing countries, the Asha range of devices, that are simple, easy to use, and very cheap. The manager identifies the target audience and makes the right product to fit their demand and preference. In doing so, they have a wider customer base and thus higher profits. Customers have a wide array of products to choose from due to product differentiation. The devices essentially use almost the same components and thus the company may enjoy economies of large scale buying and production. This leads to lower production costs and the realization of more

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