How many of us use Nokia in today’s world. Nokia had a first-mover advantage when phones were first launched and were a worldwide brand that had captured more than 70% of the market share in most of the countries. With reasonable prices and first-mover advantage, where did they go wrong? Here’s a case study on Nokia’s rise and fall.
Nokia is a Finnish communication and IT corporation, which is founded in 1865 by Fredrik Idestam and Leo Mechelin. It was founded as a pulp mill in its initial stages but from the 1980’s it started manufacturing mobile phones. Nokia has given a major contribution to the Mobile industry as it was ranked as 85th richest company in 2009 and 415 in 2016 by Forbes. Its headquarter is located in Espoo, Finland. Their annual revenue for the year 2018 was 2,256 crores EUR.
Nokia Case Study
By 2008 Nokia was the largest distributor of mobile phones around the world but then Google and Apple had entered into the market. They were growing their market share fast which concerned Nokia. At that time smartphones were the new concept with Google offering Android and Apple offering IOS. These mobile operating systems were growing as Samsung, Vivo, Lava, Oppo, etc had adopted Android. IOS was only for Apple products.
Nokia still had the Asian market share as Android and IOS were only rising in Europe and America but it wasn’t that popular in Asia. But flip phones by Samsung and Motorola had customers crazy as this was something they had never seen before. Small companies were taking over the market and Chinese phone manufacturers were producing phones at a faster rate than any other company. China became a mobile hub.
Nokia stayed to arrogant with its brand positioning with its Nokia Symbian but didn’t realize that industry had changed from hardware to software. They still were marketing with the tagline “Phones that don’t break”. Nokia fired its CEO Olli-Pekka Kallasvuo in 2010. Stephen Elop was the new CEO. Elop decided to shake hands with Android but changed it to Microsoft thinking everyone was adopting Android.
All app developers had started using Android. They had created a large ecosystem with their customers so did IOS. These phones also entered into retail marketing. Android was more of an. open ecosystem compared to IOS as all apple products were connected to each other.
Elop before joining Nokia was the Head of Microsoft. He was termed as the ‘trojan horse’ by Forbes in 2013. It’s said he wanted Nokia to be under Microsoft so he could become Microsoft’s CEO. Today’s tech guru’s also admitted Nokia OS Meggo was a hit in 2010 but Elop stopped the production. In 2013 Microsoft bought Nokia for 7B. Elop knew if Microsoft buys Nokia he’ll become the next CEO of Microsoft. Microsoft had the software, desktops and computer market but wanted to enter the telephone market and changed Nokia’s name to Microsoft. This was termed as the wrong acquisition.
When Microsoft launched its new phone it was priced around 3-5k which was the same price as Huawei and Xiaomi smartphones. Nokia wasn’t only the last mover but also didn’t give its users any new features that would have outsmarted IOS and Android. Ex CEO Steve Ballmer left and Satya Nadela took up. He voted against the acquisition of Nokia.
Ex-employees of Nokia came together and started a company HMD Global. They bought Nokia from Microsoft and all those mistakes that they made with Nokia and all the feedback they got they converted it into fast-forward. This was a very feasible phone and Nokia before wasn’t into retailing they corrected that also. The phone is being manufactured by FOXCONN. This is how Nokia bounced back.
Looking at Elop’s we can see he was a talented CEO. A talented CEO can benefit a company’s profit but a talented CEO with no will is as dangerous as an uneducated CEO. Previous employees weren’t ready to give up which shows us the dedication they had for their company.