The firm named Nokia corporation was established in the year 1865, when an engineer named Fredrik Idestam founded a pulp mil within Finland and then started paper manufacturing business, expanded to a rubber factory and later attempted to shift its business line to electronics. In the year 1968, Nokia shifted to the telecommunications business and played a vital role in early fruition of the mobile phase. In 2007, the firm was known as the world’s 5th most esteemed brands (Ali-Yrkkö, Rouvinen, Seppälä & Ylä-Anttila, 2011).
Nokia was globe’s largest producer and manufacturer within mobile phone industry. But it lost its market in few years. The most vital competition that was faced by the firm was within the smartphone segment, with their own and existing operating system named “Symbian”, which they were rigid to change. All big and small players in the industry started capturing Nokia’s share in several developing nations like India and China (Linden, Kraemer & Dedrick, 2009).
Nokia’s long run dominance got challenged and the firm couldn’t survive the changes. Lowering of the ASP i.e. average sales prices and also market share had a major effect on the firm. Nokia soon was forced to re-think about its existing strategy towards the developed as well as the emerging markets. Mobile industry rapidly went through vital changes in few years and many top classes mobile suppliers were also losing market shares and many new firms were entering the market. Meanwhile people started buying more mobile phones than ever before (Cateora, Gilly, Graham & Money, 2016).
With development of smartphones, mobiles were not just phones, rather became a subcategory option of computers, GPS navigations, cameras, social networking tools, Internet terminals and much more. As Nokia didn’t alter its strategy of marketing and also was unable to change itself with changing technology, it came as a negative effect for the firm (Cateora, Gilly, Graham & Money, 2016).
Motivation for research- Nokia’s share in the market declined to 28.2% from 36.7%. It was marked as the lowest share that the firm had ever had after the year 1999. Even in the global smartphone market the share of the firm fell from 44.6% to 36.6%. Being a market leader what actually happened with the firm? Why did it fail? Why couldn’t it survive the competition? All these questions and urge to find their answers came as a motivation for this study (Paliwoda, 2013)
Importance of International business environment for companies- Business ecology comprises of all the facets, which affect a firm’s operations. It involves competitors, suppliers, customers, stakeholders, regulations, industry trends, social as well as economic factors and also technological facets. A business being an open system constantly interacts with its ecology. Every business intakes inputs from its environment and turns them into services or goods later sending them back to the environment. Thus, it is vitally important for every firm to properly recognize its threats, opportunities, changes, strengths, market demands and also changing technology (Surowiecki et al., 2018).
Company’s information- When iPhone was launched in the year 2007, Nokia’s share in the smart phone industry dropped to 27% from 51%. In midrange, all the phones inculcating the operating system of Google named “android” exceeded the smart phone sales of Nokia. The difficulty for the firm can be comprehended by Nokia’s CEO Stephen Elop’s statement in which he said that the firm is “standing on burning platform” and thus the firm needs to “alter its behavior ” (“Nokia saw the future, but couldn’t build it”, 2018).
“Strategy is direction and scope of the firm”, Nokia’a tactic started giving a dissimilar direction to the business in long run. To analyze the real problem one needs to understand both Micro as well as Macro environment of the firm.
Employees- the firm had properly suitable and perfect employees and later they even motivated those staffs for the business. Nokia’s major competitors like Apple, Sony Ericson and Samsung, did not have a good employee base whereas Nokia due to its supportive and flexible staff base was able to increase their business to international level (Bhatt, 2002).
The firm’s trade strategy was on basis of cost leadership. Nokia carried an enormous and extraordinary product portfolio that gratified the buyers all over the globe. The firm always strived to maintain lower cost for its offerings and thereby attained economies of scale as well. Nokia used all strategic suppliers throughout its market with an aim to obtain improved subassembly gadget that were used to produce eminent and technologically advanced devices.
Nokia was required to emphasize on entire electrical market throughout its phase of financial crisis as the economic uproar unconditionally predisposed all the international economy. A report by the firm exposed very lower share in the device of mobile industry in 2008. Nokia saw and faced a very threatening time within entire telecommunication sector in 2009 and it was represented by an anticipation of the mobile volumes lessen by 5% and even more in the year 2008. Briefly, entire market for mobile got deteriorated. Buyer’s backing off instigated this type of position of the affairs in expenditure, lessened ease of usage of the credit from slowing down of the international economy and also legal tender randomness. Particularly, Nokia believed that incremental crash impacts the developing markets more than the other advanced markets (“Predicting industry inflections at Nokia”, 2008).
Technology is seen as the soul of the telecommunication sector. This is considered as the reason of R&D becoming the need for all firms involved in telecommunication market. 3G mobiles, smart phones and also ecology friendly phones were considered the corroboration of all the technological progressing within the telecommunication sector. Research center of Nokia was unable to find the main cause of losing the market and thereby the firm was unable to change itself with changing technology leading to its downfall in smartphone sector (“Predicting industry inflections at Nokia”, 2008).
Smartphone industry started changing within no time. Like, network played a vital role and articulations in the market were brought in and were being familiarized in 2006. Sales of the firm Nokia and also its profitability got significantly exaggerated because of evolution and accomplishment of all the innovative divisions in the market, which required a dissimilar outlook as well as understanding of the industry. Nokia then lost its share in 3G phone once it started ignoring the need and significance of good network. Quite the reverse firms like Apple experienced the propensity and launched iPhones (Bhatt, 2002).
Competition went to extreme in the smartphone sector. To avoid the failure the Nokia had to headway its market position, and was required to become habituated with the alterations taking place in the market, which became difficult for the firm’s rigid and non-flexible strategy and stiff strategic design for marketing. Though Nokia was the top most firm in the market of mobile phones, other competitors like Motorola, Samsung, and Apple etc. laid up immense pressure. Nokia became unable to handle the pressure and was stuck with its strategic issues, which resulted in the failure of the firm (Bhatt, 2002).
Through my analysis, I found out few areas where the firm Nokia lacked.
Conclusion
Nokia being number one player in the cellphone sector lacked in few areas, which proved to be a negative point for the firm, and ended up in its failure. No one in the industry could match up Nokia’s price, quality, customer service or even features that it provided in its mobiles. A mistake of rigidity and inflexible strategic marketing system lead the firm to downfall. Also a major reason found for the firm’s downfall was the economic crisis all over the globe, which Nokia couldn’t survive like other firms did. Nokia could have avoided the failure with taking few simple and flexible steps that were need of the hour.
References
Ali-Yrkkö, J., Rouvinen, P., Seppälä, T., & Ylä-Anttila, P. (2011). Who Captures Value in Global Supply Chains? Case Nokia N95 Smartphone. Journal Of Industry, Competition And Trade, 11(3), 263-278. doi: 10.1007/s10842-011-0107-4
Aspara, J., Lamberg, J., Laukia, A., & Tikkanen, H. (2011). Strategic management of business model transformation: lessons from Nokia. Management Decision, 49(4), 622-647. doi: 10.1108/00251741111126521
Bhatt, P. (2002). Internationalisation and Innovation: A Case Study of Nokia. Vision: The Journal Of Business Perspective, 6(2), 121-129. doi: 10.1177/097226290200600212
Brockhoff, K. (2003). Exploring Strategic R&D Success Factors. Technology Analysis & Strategic Management, 15(3), 333-348. doi: 10.1080/09537320310001601513
Cateora, P., Gilly, M., Graham, J., & Money, R. (2016). International marketing. New York, NY: McGraw-Hill Education.
Jia, J., & Yin, Y. (2015). Analysis of Nokia’s Decline from Marketing Perspective. Open Journal Of Business And Management, 03(04), 446-452. doi: 10.4236/ojbm.2015.34045
Linden, G., Kraemer, K., & Dedrick, J. (2009). Who captures value in a global innovation network?. Communications Of The ACM, 52(3), 140. doi: 10.1145/1467247.1467280
Nokia CEO on predicting the future: Use data, customer feedback and instinct | FierceWireless. (2018). Retrieved from https://www.fiercewireless.com/tech/nokia-ceo-predicting-future-use-data-customer-feedback-and-instinct
Nokia saw the future, but couldn’t build it. (2018). Retrieved from https://www.theverge.com/2014/9/22/6826051/nokia-saw-the-future-but-couldnt-build-it
Paliwoda, S. (2013). International Marketing. Routledge.
Predicting industry inflections at Nokia. (2008). Strategic Direction, 24(7), 13-15. doi: 10.1108/02580540810877357
Rice, J., & Galvin, P. (2006). Alliance patterns during industry life cycle emergence: the case of Ericsson and Nokia. Technovation, 26(3), 384-395. doi: 10.1016/j.technovation.2005.02.005
Surowiecki, J., Klay, P., Glasser, S., Fry, N., Farrow, R., & Cassidy, J. et al. (2018). Where Nokia Went Wrong. Retrieved from https://www.newyorker.com/business/currency/where-nokia-went-wrong
Three reasons why Nokia failed – CIOL. (2018). Retrieved from https://www.ciol.com/three-reasons-nokia-failed/
Väänänen-Vainio-Mattila, K., & Ruuska, S. (1999). Design: Designing mobile phones and communicators for consumer needs at Nokia. Interactions, 6(5), 23-26. doi: 10.1145/312683.312697
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download