1 The rise and fall of nokia
2 About nokia In 1871 Fredrik Idestam opened his second mill on Nokianvirta river which gave the name Nokia Ab in 1871. Nokia began with making paper incidentally one of the first communication technologies. In 1898, Eduard polon founds the Finnish Rubber works, which later becomes Nokia’s rubber business, making everything from galoshes to tires. In 1912, Arvid wickstrom sets up the Finnish cable works, the foundation of Nokia’s cable and electronics business. In 1963, starts developing radio telephones for the army and emergency services Nokia’s first foray into telecommunication. And by 1987, Nokia is the third largest TV manufacturer in Europe.
3 The Mobile era Nokia sets the ball rolling in 1979, creating radio telephone company Mobira Oy as a joint venture with leading Finnish TV maker Salora. Then in 1981, the Nordic Mobile Telephone (NMT) service, the world’s first international cellular network and the first to allow international roaming, is launched. In 1984, Nokia launches the Mobira Talkman portable car phone. Resembling a military field telephone, it is a fairly cumbersome piece of kit but its start. In 19867, GSM(Global system for Mobile communication) is adopted as the European standard for digital mobile technology. With its high-quality voice calls, international roaming and support for text messages, GSM ignites a global mobile revolution.
4 Nokia in new age In 1992, Nokia launches its first digital handheld GSM phone, the Nokia 1011. In 1994, Nokia launches the 2100 series, the first phones to feature the Nokia Tune ringtone. The Nokia 2100 series goes on to sell 20 million phones worldwide. Nokia’s target was 400,000. By 1998, Nokia is the world leader in mobile phones. Between 1996 and 2001, Nokia’s turnover increases almost fivefold from EUR 6.5 billion to EUR 31 billion.
5 Competition While it was not totally unexpected, what caught Nokia off guard is the rate at which competitors where innovating new technology. Since the launch of the iphone/Android phones, Nokia failed to keep up with the industry. While other kept proceeding ahead aggressively by ‘hook or crook’. If analyzed through the Technology Lens, Nokia primarily failed to innovate attractive technology and features. For example, through Nokia had touch screen phones, it did not attract customers as much as compared to Apple iphones.
6 competition The software being developed were using old development models and newer concepts such as user Experience and user interface were being neglected. Nokia was clinging onto symbian OS for too long. It had reached its peak
7 Concise timeline of nokia
In October 1998, Nokia became the best-selling mobile phone Brand in the World. Nokia’s operating profit went from $1 billion in 1995 to almost $4 billion by 1999. The best-selling mobile phone of all time, the Nokia 1100, was created in 2003. In 2007, Apple introduced the iphone. By the end of 2007, half of all smart phones sold in the world were Nokia’s, while Apple’s iphone had a mere 5 per cent share of the global market. In 2010 Nokia launched the ‘iphone killer’ but failed to match the competition.
8 Concise timeline of nokia
The quality of Nokia’s high-end phones continues to decline. In just six years, the market value of Nokia declined by about 90% Nokia’s decline accelerates by 2011 and is acquired by Microsoft in 2013.
10 Human resources As per Stephen Elop’s initial memo, which leaked to the press, the company was on a ‘burning platform’. This was a reference to the Symbian OS the company had been using for so long. This was regarded as very discouraging and one of the most damaging memo in corporate governance. Although Elop tried his best, the company saw its worst days. Market share fell drastically from 45% to 34% in 2011 Nokia posted a loss of 368 million Euros for Q
11 Why nokia failed in market
Overestimated Its strength They refuse to play by the market rules. They overestimate their brand and do not change. In Nokia’s case, the brand was too late to step up the Smartphone game. They refused to change its hardware designs and thought it could catch up with iphones superiority. That was the beginning of the end.
12 Why nokia failed in market
Nokia Microsoft Deal Symbian technology dominated Nokia’s creations for the longest time until it entered a partnership with Microsoft. And then, it did not make a move to Windows quickly. By the time it understand the importance of changing its operating system, it was too late. By this time, Android and iOS had already bought everything that the market needed.
13 Why nokia failed in market
Refusing To change The management team at Nokia failed to see how Software is taking precedence over hardware. The importance of applications-led ecosystems was growing. Nokia did have the skills to step up with the times. They did not even show the inclination to work towards it.
14 Why nokia failed in market
Not Turning phones Into small computers Apple and Google make devices powerful. They create stuff that can handle all your computer work on a phone-from HD videos to 3D games, everything. This is what Nokia and even Blackberry for that matter, failed at. Apple and Google advertise their products with simple concepts like 'Desktop-class architecture’.
15 Why nokia failed in market
Spending More In The Wrong Direction According to wall Street Journal, Nokia’s R&D expenses were close to a shocking $US40 billion. These research efforts never saw the light of the day-internal rivalries between strategy teams and Research made this difficult.
16 Why nokia failed in market
Launching Its Own Apps Store In 2009, Nokia launched its own Apps and a content store called Ovi. The platform failed to impress for the simple reason, that Nokia never had any real platform experience. To add to the mess, Nokia launched it in 35 countries at the same time. Symbian was shut within two years and it just made the brand look weaker and unsure.
17 Results During the 3 years Elop was Nokia CEO, Nokia revenues fell 40%, Nokia profits fell 95%, Nokia market share collapsed in Smart phones from 34% to 3.4%. Nokia’s credit rating went from AAA to junk, Nokia’s share price dropped 60% in value and Nokia’s market capitalization lost a minimum of $13 billion in value. The Financial Times calculated that Nokia shareholders ended up paying Elop a bonus of 1 million Euros for every 1.5 billion in market capital that Elop was able to destroy while Nokia CEO.
18 Why did nokia’s market share sink suddenly?
PESTEL Analysis of NOKIA Political Factors: Lack of government support. Alliance with Microsoft. Production Facilities located all over the world. Economic Factors: Economic crisis in Europe. Limited buying power in home market. Lack of economic resources. Difficulties in establishing in Chinese market.
19 Socioculture Factors:
Failure during adoption on smart phones. Microsoft Windows phone, not as appealing as Android. Customers focus on Apple and Samsung. Focus on health issues. Support the WHO. Environmentally sustainable business. Nokia code of conduct. Technological Factors: Nokia stuck with its operating system. Difficulty of reaching young customers. Partnership with Microsoft brings technological advantages.
20 Environmental Factors:
Environmental Laws in china increases the production costs. Increased costs for materials , for lithium for batteries. Environmentally friendly brand. Approved , tested, sustainable materials & lighter, recyclable packaging. Legal Factors: Protection of intellectual property.
21 PESTEL Analysis of NOKIA
Nokia’s biggest mistakes: Production of Smart phones not at same time as Apple did. Saving partnership. Samsung, LG & Apple are preferred. Threat by the iphone. Apple’s deal with AT&T. Ignoring of US market. Nokia sold its products directly to the customers.
22 PESTEL Analysis of NOKIA
Solutions: Create a unique device to compete with iphone. More stylish products-Redesigning products. Gaining customer’s attentions. Android operating system. Willingness to pay for good quality. Focus on the high end market. Invest in Research and Development. Customer surveys.
23 What we learnt Never stand still on the battlefield.
Complacency slowly but surely kills. Failure, like success, happens as a process so, recognize it in the first stage. Invest R&D in products and services customers want and need. Create ecosystem that can grow stronger and bigger.
24 Did nokia go out of business
Poor Lumia sales led the company close to bankruptcy in mid The Lumia 920 and Asha features phones increased the company’s market share, but did not do much for nokia’s profits. Finally in September 2013 , Nokia announced it would sell its mobile devices division to Microsoft.
25 Nokia is coming back to us
Somewhere in the distance, a beautiful melody rings out. Nokia ended up selling its mobile devices division to Microsoft in 2013, which ran it into the ground within a few years. After a small hiatus, Nokia named returned, thanks to a new company called HMD, backed by FIH Mobile. In 2016, HMD bought Nokia’s old feature-phone division from Microsoft for $350 million. HMD split its business between selling feature phones, like the nostalgia-packed reboots of the 3310 and 8110 phones and smart phones that offer a lot relatively low prices.
26 The phone features a massive 6-HD display, two rear cameras for portrait shots ,a large 3,500 mAh battery, and up to 32 GB of storage. The company is hoping its low price, and its heritage , will be enough to win people over(HMD is stacked with former Nokia execs).
27 question Who Destroyed Nokia: Stephen Elop destroyed Nokia.
Stephen Elop pushed the company toward Microsoft (NASDAQ:MSFT), he destroyed every platform Nokia had spent years to develop: Symbian, MeeGo and Meltemi. During 3 years Elop was Nokia CEO, Nokia revenues fell 40%, Nokia profits fell 95%, Nokia market share collapsed in smart phones from 34% to
28 question Was there any way Nokia could save itself?
Nokia would have been saved, if Nokia could have joined the Android bandwagon. Nokia optioned to use Microsoft Windows in its Smartphone handsets which were lacked many basic features and basic apps. People did not buy Nokia Smart phones, they bought Android which offered infinite apps and all the features.
29 question What can we learn from Nokia’s failure?
Nokia failed not because it was not competitive but because it got comfortable with the market. When new competition were entering the market, Nokia did not take this to be an issue. The time Nokia got a wake up call it was too late to create something that would keep its market. Therefore two lessons can be learned: Don’t get too comfortable with the little you have. Lack of innovation eventually exposed you to the risk of failure.