One firm economies: The Nokia Effect - Research Paper Example

But since 2007, a major decline has been noticed in the company’s share price by 90%. This is mainly due to the competitive growth attained by Apple Inc and the demand of this particular brand in the mobile market. A close examination of the company’s sales as a percentage of GDP highlights clearly Nokia’s importance in running the wheel of the Finnish economy. This can be further explained by the data given below: The data have been placed according to Dow Jones Global Index to analyze and identify the firms that rank highest because of their high revenues according to their country listing.

It can be concluded that various firms such sd Essar Energy, China Mobile and ArcelorMittal stand tall in the list for different reasons and particularly, because of their working domain and region of operation. Oil and gas firms top the list, even though the results cannot be extracted solely on the nature of operations conducted by the firms, mainly because of the certain type of activities these firms carry out. Sands China makes a bigger impression on the other side of the list. Sands China, being a casino developer and the biggest operator, contributes 13% of its sales with that of Macao’s GDP reflecting the interests of people within the country.

However, among these different firms, Nokia resembles Taiwan’s Hon Hai in its operations. It has been figured out that Nokia made around 27% of the Finnish patent applications in 2011 while on the other hand, Hon Hai made 8%. Regardless of the fact that Nokia is supported by a number of employees in Finland, the contribution of this company is going down day by day. Not only Nokia but other firms are also faced with the similar situation all over the world. Finland’s dependency on Nokia that has a strong employee base within the country can be considered as a total risk.

Diversification is a key driving policy in any industry that Nokia lacked at this moment. It is not a wise decision for Finland to depend on a single company for huge revenues when knowing the bitter fact that the country’s economy is itself small and vulnerable and it can be crumbled down anytime by any international ups and downs. At this point, the company is in dire need to change its leadership in order to avoid more downfalls. The overall situation is alarming for the Finnish economy and country’s welfare model.

Previously, Finland enjoyed a stable position as a triple A-rated country in the euro zone for its well structured economy, but the recent downfall of its one of the most prestigious cell-phone exporting companies has wrecked the entire economical model. Other factors such as inflation and increasing ageing population have also contributed to the downfall of the Finnish economy which will grow at a slower rate of 1 or 2 percent in the upcoming years. It is important to bear in mind that relying on a single company may result in various economical disadvantages for the country.

Finland may receive a complete setback if Nokia crashes completely. In order to avoid such huge losses, it is high time for Finland’s economy to replace the 23 percent of corporation tax from Nokia. At the same time, for the company it is highly important to strategically revive its policies, form stronger management and focus more on better decision making skills. Due to emerging competitors such as Apple