Republic of the Philippines

City of Taguig
Taguig City University
Gen. Santos Avenue, Central Bicutan, Taguig City

CASE STUDY 10
FAILURE OF NOKIA

SUBMITTED BY:

JERRELIN C. OGATIS
BS INDUSTRIAL ENGINEERING

SUBMITTED TO:
PROF. FENWILL MORALLO
 Republic of the Philippines
City of Taguig ii
Taguig City University
Gen. Santos Avenue, Central Bicutan, Taguig City

Introduction
Nokia Corporation is the world's biggest maker of cell phones, serving clients in 130
nations. Nokia is separated into four business gatherings: Mobile Phones, Multimedia, Enterprise
Solutions, and Networks. The Mobile Phones bunch markets remote voice and information items
in purchaser and corporate markets. The Multimedia section sells portable gaming gadgets, home
satellite frameworks, and digital TV top boxes. The Enterprise Solutions bunch creates remote
frameworks for use in the corporate part. Remote exchanging and transmission hardware is sold
through the organization's Networks division. Nokia works 15 fabricating offices in nine nations
and keeps up innovative work offices in 12 nations. Points of Nokia are to rouse and teach
customers to the benefit of portability and augment the intrigue of the Nokia brand (Nokia 2011).
"In achieving our point of widespread access, versatility obviously offers the quickest and most
affordable arrangement," (Ollila). With the dispatch of the Nokia Music Store, Nokia means to
make accessible to all the Spanish clients of any age the music that they need at any minute they
need; with every one of the courtesies that portability grants (Nokia 2011).
Nokia’s Vision-
Connecting people and technology. Nokia’s vision lies on the platform of connecting everyone on
this world. everybody has a neediness of communicating and sharing. They help people to
accomplish this need and to help people stay close whatever matters to them. Communication
industry has been changed and internet is in the middle of this transformation. Today the internet
is Nokia’s quest. The company strategy relies upon growing ,building and transformation Nokia's
business to ensure their future success.
Nokia’s Mission
To guide and focus decision making
To create a balance between the competing interest of various stake holders.
To motivate and to inspire organizational members.
New mission
Building a new winning mobile ecosystem in partnership with Microsoft.
Bring the next billion online developing growth market. Invest in next generation disruptive
technologies increasing our focus on speed, result and accountabilities.

Nokia moved too slowly

Nokia was a pioneer in the smart phone market, literally introducing consumers to the smart
phone with its initial Symbian Series 60 devices in 2002. For the next five years, Symbian phones
had little trouble maintaining a leadership position in the smart phone pack.
"They didn’t make the leap of faith onto Windows Phone until 2011. Now they are suffering
from their slow response." – Wayne LamBut in 2007, Apple introduced its iPhone. With its full
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touch screen and app-based operating system, the iPhone changed the very definition of what a
smart phone should be.
Yet Nokia failed to respond to the iPhone and the shifting consumer demand that came with it.
As the years passed, the Symbian platform aged, and that age really showed when compared to
iOS and, later, Android. Simultaneously, the smart phone market exploded – more and more
consumers opted for pocket-sized mini-computers instead of "feature" phones with tedious
WAP browsers.
Nokia didn't have the panache
The classic Nokia brick phone – and the Snake game on it – brings back a lot of nostalgia. But
that's a problem. Consumers, especially in developing markets, associate the Nokia name with a
different era of technology. And in today's world, having the newest and shiniest device is what
matters.
"Nokia was sort of an older brand; there wasn't a new panache to it. Samsung, as a marketed
brand, was perceived as an innovator. Nokia has a legacy baggage – they are the traditional
brick, candy bar phone maker," Lam said.
Nokia didn't market itself as an innovator, and frankly, it hasn't been doing much innovating
anyway. At least not until it entered the Windows Phone space.
Complacency/satisfaction
As a market leader for over a decade, Nokia didn’t really plan for the future as it seemed a bit
complacent with its products. When Apple launched the iPhone in 2007, the first touch phone,
Nokia was still priding in its E-series by when the definition of smart phone had undergone a
tremendous change. That was least expected from the pioneer in the smart phone market.
The success of iPhone didn’t have any significant impact on Nokia, unlike Samsung, which
experimented with off-the-shelf technologies and managed a transition to smart phones much
faster than expected. And Nokia, which had launched its first smart phones through its Symbian
series 60 in 2002, remained a pioneer with no better future prospects. Nokia failed to anticipate,
understand or organize itself to deal with the changing times.
Lack of product innovation
While Samsung comes up with new phones almost every year with a slight modification from the
previous launch, Nokia’s Windows phone which came in 2011 lacked some basic technology
essential to drive its sales. Nokia’s Lumia series was launched with a bang, but didn’t click.
Reasons can be its design, which wasn’t as attractive as Samsung phones or the iPhone. Today
the sale of phones is dependent on how shiny or trendy it looks. Leave aside the looks, Nokia
phones didn’t have the front camera, which makes it not even 3G enabled. And we are on the
threshold of entering the 4G era. So, Nokia’s latest phones were featuring ready, but not future
ready.
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Nokia became laggard in smart phone market

Stiff competition from Samsung and Apple, and lack on focus on innovation was the second big
reason of collapse. Even if users could ignore the OS, the hardware features which Nokia was
rolling out were quiet late as compared its major competitors Samsung and Apple. Nokia seemed
to be lagging in the race. Where Samsung from nowhere entered the race and focused on
innovation as its core competence to gain the market share, Nokia was very late to realize this
fact. Samsung did everything right to focus solely on product innovation and started competing
with Apple in all product lines from smart phones to tablets, but Nokia failed to develop a
focused device strategy.
Losing market share on both ends
Nokia not only failed to realize competition from Apple, Samsung, Sony, and Blackberry in high
end smart phones, they also failed to notice the stiff competition in the lower segments of
phones. Where Nokia was losing charm in high end phones, the competition from Micromax,
HTC, Huawei and ZTE squeezed the company’s market share in lower segment too. This led to
double trouble for the company. The company which used to have epic models like Nokia 1100
suddenly started losing at lower ends too. Very lately company realized this thing and launched
their Asha series but by that time they had already lost the game.
Failure to implement the right umbrella branding strategy
Apple was the first phone to use the strategy of umbrella branding using iPhone as an umbrella
brand and then building subsequent models each year. Samsung was quick in identifying this
concept and they started building their high end phones with Galaxy S series.
Nokia on the other hand used to have used an umbrella brand in the N series and recently the
Lumia series, but they failed to create buzz among customers which Apple created. Apple very
uniquely launches its new model in September each year and whole year it builds consumer
anticipation which drive demand.
But the problem with Nokia’s umbrella branding is that they didn’t, or couldn’t build anticipation
in users.
What made Nokia fail?
Geographic isolation
Focus too much on maintaining itsposition, rather than innovating fornew opportunities
Lack of capability to combine hardware, software and service
Stifling levels of bureaucracy

PROPOSED SOLUTIONS FOR THE CASE

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Company Solutions:
 Adopt Android operating system
 Remove old CEO and appoint new
 Targeting medium range of Smartphone’s market i.e. RS. 7000 to 15000
 Reintroduce old models like Nokia3310 with latest features

Alternative Solutions proposed by Nokia

360 analyses of market and company
Nokia should analyze current market situation and trend in market; also they make 360 analysis
of its own. Nokia analyze all aspect regards current customer need and demand.
Be a fast mover
Nokia firstly remove myopia i.e. threat to change, and be a fast mover in industry by different
ways to survive in industry. Increase product Innovation
Innovation is a key to survive in the market for a Nokia. If Nokia wants to recover it market and
position in India, they requires increasing innovation activities. Through new innovation Nokia
able to creates its old brand image in customers mind. There are different sources of innovation
like customers, suppliers, competitors etc.
Convert feed back into value
One of the important solutions for Nokia is to convert customers feed backs into value, i.e. if
customers are not satisfied with anything, listen their problems and try to solve it.
Increase brand promotion
Another solution for Nokia is to increase their brand promotion and reinforce brand in
customers mind. Nokia will be making brand building process for promoting their brand in
marker.
Hire Skillful marketing peoples
Marketing is a process of identifying real needs and wants of customers. For that Nokia requires
hiring innovative and skillful peoples for marketing.
Find out opportunities and convert into action
Opportunities are a way to come back in market with getting it and implement or convert that
opportunities in action to meet customers demand and needs.
Recall old brand images on customers mind
With an effective advertising and promotion strategy, Nokia will try to recall old brand images on
customers mind. Now a day’s peoples also identify Nokia easily because its brand value and
image. So Nokia catch that and recall its old brand image.
Build strong distribution chains
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Your distributers are the peoples who deliver your product to market. For that Nokia will develop
strong distribution chains to meet needs of market.
Implement right umbrella brand strategy
Nokia have different products with its brand name. But they not properly adjust their products in
umbrella brand. So Nokia wants to implement right umbrella brand strategy
Retain customer base is main goal of company
Customer is a person who purchases your product. Without customers you don’t operate your
business in day. Nokia aim to retain customer base for growing in market
Invest capital in right tie-ups
Capital is very important aspect for any business. Without capital no one can operate their
business in market. If Nokia wants to come back they must be identify beneficial spots where
they gain more return of investment and invest on right tie-ups.
Build a unique business plan and marketing strategy
Business plan and marketing strategy help to implement your plans regard to achieve company
goals. Marketing strategy includes marketing mix. For Nokia marketing mix strategy is very
important for come back.
Implement right STP (product placement) strategy
STP includes segmentation, targeting and positioning in market. Nokia will be decides which
segment is beneficial, what is target market for him and how they positioning their product in
market.
Recommendations
When facing challenges, Nokia should consider competitors, overall environment of India and
the internal conditions. There are some recommendations for each challenges.

The threat of competitors

To defend competitors, Nokia must be customer oriented and continuously innovate to create
differentiations. It has also sped up new adapted products development, such as dual-sim card
phones and social networking apps. If Nokia wants to sustain customers, it can engage meaningful
social responsibility activities to create better reputation than competitors and improve
performance (Chikezie 2010).

Success trap
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Nokia should keep dynamic capability and extend it. My recommendation is employing new staffs
working in India, who can bring new ideas and knowledge. The point of view from new and old
employees will avoid Nokia always notices past success and not to change.
Social situation and changes
Nokia must keep market insight and industry trends. It should learn from changes (Masalin 2003),
such as producing high-end phones and devoting to innovating user-friendly software for
Indian to expend market. As India is a collective country, it should consider group profit
(Ammisetti 2010). For instance, Nokia can organize charity activities to help poor people through
marketing method, such as selling one mobile phone and donating 10 dollars. This can help Nokia
benefit local people and improves performance.
Policy changes
Nokia should build good relationship with Indian government which can support future
development such as lower taxes. So, Nokia can follow the environmental and social regulations
and assume responsibility. When making decisions, Nokia has to consider government’s and
customers’ requirements, local policies and its profits, such as producing goods through energy-
efficiency or renewable energy and resources.

Conclusion
Although Nokia faced many competitions from 1995 to 2010, it still sustained as market leader.
However, Nokia will encounter many future challenges. Thus, Nokia should hold current
competitive advantages, and adapt industry, society and customer changes. Nowadays,
customers and stakeholders are more awareness of environmental and social issues when
purchasing and manufacturing products. So, Nokia needs to consider environmental and social
responsibility in the future and carry out them.

References:
https://www.academia.edu/34726606/Nokia_-Case_Analysis
https://www.academia.edu/6702820/Nokia_case_study_finished
https://www.academia.edu/14418346/Nokia_case_study
https://www.academia.edu/9511500/Nokia_Case_study
http://www.researchscript.com/wp-content/uploads/2018/07/IJMH050304.pdf
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Taguig City University
Gen. Santos Avenue, Central Bicutan, Taguig City