The Rise and Fall of Nokia
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NOKIA’s Strategy:
A new winning mobile eco system
in partnership with Microsoft,
developing growth markets,
investment in next-generation
disruptive-technologies,
focus on speed,
results as well as on accountability
Sources:
Political factors:
- Lack of governmental support
- Alliance with Microsoft
- Both advantages and disadvantages for Nokia
- Production facilities located all over the world
http://businesstech.co.za/news/mobile/16053/nokia-not-getting-finnish-government-bailout/
http://www.wired.com/2015/07/microsoft-takes-big-nokia-hit-ballmer-era-now/
http://www.androidauthority.com/eu-right-bring-antitrust-case-google-603007/
http://company.nokia.com/en/about-us/corporate-governance/nokia-code-of-conduct
http://networks.nokia.com/about-us/sustainability/environment
http://www.techrez.com/nokia-s-huge-blunder-not-making-an-android-phone/
http://www.cnet.com/news/5-blunders-that-put-nokia-in-the-hot-seat/
http://www.gotabout.info/swot-analysis-of-nokia/
Juan Alcácer, Tarunk Khanna, Christine Snively: The Rise an Fall of Nokia. in Harvard Business School.
Evolution of Nokia
Economic Factors:
- Economic crisis in Europe
- Limited buying power in home markets
- Difficulties in establishing in Chinese market
- Lack of economic resources and R&D capabilities
Propose strategies for the company based on the strategic thrust framework
Sociocultural Factors:
- Failures during adoption of smartphones
- Microsoft Windows phone:
not as appealing as Android
and Samsung
- Focus on health issues
- Support the WHO
- Environmentally sustainable
business
Table of Content
Technological Factors:
- Mobile phones-> handheld computers
- Nokia stuck with its operating system
- Difficulty of reaching young customers
- Partnership with Microsoft brings technological advantages
- Evolution of Nokia
- Rise of Nokia
- Fall of Nokia
- PESTEL Analysis
- SWOT Analysis
- Solutions
- References
Market penetration - existing customers may become more loyal (brand-switch less often)and new customers in the same market may enter; tactic to increase the use of product
Product development - improving present products or developing new ones for current market; form of brand extensions
Market development - current products sold in new markets, new geographic markets
Enter new markets - most risky strategy but may be necessary when a company’s current products and markets offer few prospects for future growth
- 19th century – pulp and paper manufacturer
- Mid 20th century – merged with several companys
SWOT Analysis of Nokia
- Reputation
- Experience- Expertise
- Distribution network
- Higher resell value
Introduction
Rise of Nokia
- Kari Kairamo CEO – driving force
- 1982 – 1987 market value more than tribled to FIM €1.5 billion
- Controlling 1/3 patents for GSM standards
- 1992 first mass-produced digital phone
- 1998 – 23% market share / 163 million units sold
- 2007 release of the Apple Iphone
- Pressure from IOS and Android
- strength & weakness
- opportunities & threats
- strategy and situation
- position of their business
- business strategy
- marketing, production, and sales
- Growing mobile market-> Expanding the range of products and sizes
- The demand of smartphones is growing
- Microsoft-Nokia deal is a win-win
Fall of Nokia
- Slow reaction to competition
- Low sensitivity to industrial changes
- Poor designed smart phones
- Low performance of smart phones
- Poor after-all service
- Burning oil platform (Symbian)
- September 2013 Microsoft Deal
- Competitors (iPhone) are getting more and more popular
- Big companies get the strength of Android (Samsung)
- New entrants
- Strong competition
- Tough time, still reputable
- Needs to overcome obstacles
- Using the best available plans and strategies
Why did Nokia's market share sink suddenly?
How is Nokia trying to get back into mobile phone business?
Environmental Factors:
- Environmental laws in China -> increase production costs
- Increased costs for materials, for lithium for batteries
- Environmentally friendly brand
- Approved, tested, sustainable materials & lighter, recyclable packaging
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
Legal factors:
- Protection of intellectual property
Nokia’s biggest mistakes:
- Production of smartphones 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 customers