Big-Picture Issues

1
Big-Picture Issues

• What is Sakaris overall international strategy?
• What does it want?
• What is Noras overall international strategy?
• What does it want?
• What role should the joint venture play in
  facilitating each companys intended strategy?

2
Tale of the Tape

• Nora
• Sales 100 million
• Employees 3,081
• Deal of sales 123
• Big Picture
• Needs technology
• Local knowledge
• Government ties
• Deal in hand
• Seeks regional expansion

• Sakari
• Sales 4 billion
• Employees 29,000
• Deal of sales 3
• Big Picture
• Has Technology
• Seeks regional presence
• Lacks local knowledge
• Has other options

3
Negotiation Issues

• Equity ownership
• Technology transfer
• Royalty payments
• Expat salaries
• Arbitration
• Creative alternatives??

• How is each related to
• Entry mode decision
• International strategy implementation
• Capabilities

• e.g., Two JVs
• Long-run short-run
• Mfg. mkt./distrib.

4
Noras Technology Acquisition Strategy
20 of Malaysian Telecom Market
Nora
Sakari
Export Markets
Indonesia
Technology Transfer
Thailand
Vietnam
5
Sakaris International Strategy
Sakari HQ
E.U.
North America
Finland
S.E. Asia
Expand to New Region
Malaysia
6
What Actually Happened?

• Equity 60 Nora -- 40 Sakari, JV must export
  40 of production
• Technology JV will assemble SK33 switch for TMB
  contract, jointly develop new switch for export
• Royalty 3 of net sales
• Components 65 discount
• Wages Noras rates
• Arbitration Switzerland