Example Of Case Study On Nokia Extra Credit Memo
Management Insights on Alibada Group
Nokia is a company that saw many changes from its origins as a paper company to one of the global leaders of mobile handsets. The 1990s were a golden decade from Nokia as the company succeeded in majorly reinventing itself for a fourth time and becoming a world leader in cellular handsets and network technology, exporting their cell phones and products to over 140 different countries by 1998 (Alcacer, Khanna, Snively, 2014). But the markets and products and completion greatly increased at the turn of the millennia. There were both emerging players and emerging technologies which forced a shift in strategy for those hoping to be successful in selling cellular handsets into the next century.
Part of the reason for their falling market share of the early 2000s was due to the new lower cost Asian manufacturers such as South Korean manufacturer Samsung. (Alcacer, Khanna, Snively, 2014). Previously, Nokia had dominated the cheap cell-phone market of Europe, but their market share fell as Samsung entered the scene. The competition decreased product life-cycles from nine to six months, putting increased pressure on Nokia’s design manufacturing wings of their business. In addition to these new competitors, pirated versions of cheap cellphones were also increasing in Chinese markets.
In 2007 there was a dramatic shift in the market, as consumers coveted the smartphone capabilities of smart phones, spurred by Apple’s introduction of its iPhone. The industry moved from being centered on the device, to the software that the device was using. Nokia was at a disadvantage since companies like Apple were the experts in designing operating system software. Tero Kuittinen, a technology analyst, suggests that “every 10 years, a cataclysm kills off most phone brands” (Kuittinen, 2013). While IBM’s Simon smartphone was cutting edge in 1992, it is laughable by today’s standards. He writes that while Nokia and IBM both made the switch form analogue to digital at the right time, “both vendors and their ilk were swept away from the international phone market by the sudden mid-’90s market share consolidation around Motorola, Ericsson and Nokia.”
The iPhone was designed to work with iTunes and other programs consumers were already using, so Nokia’s smartphones had a tougher sell in convincing users to try their products. Still, Nokia managed to outpace Apple’s iPhone until 2011 (Frommers, 2014). It maintained this status due to it’s distribution arrangements with hundreds of mobile operators around the world (Fommers, 2014). Where Nokia failed to catch up with Apple, and the main reason that Apple eventually surpassed Nokia is that it software never caught up with Apple. This is why a merger between Microsoft and Nokia, two companies lacking for what the other had, were almost forced into what could be considered a forced marriage of mergers. Nokia held onto its prominence because of its history, but in the fast and competitive market of mobile handsets, it was failed to develop the sort of operating system it needed to in an adequate time frame.
Frommer, D. (n.d.). Sorry, Mr. Prime Minister, Apple didn't kill Nokia-Nokia did. Retrieved February 9, 2015, from http://qz.com/280987/sorry-mr-prime-minister-apple-didnt-kill-nokia-nokia-did/Kuittinen, T. (n.d.). Every 10 years, a cataclysm kills off most phone brands – the next one is almost here. Retrieved February 9, 2015, from http://bgr.com/2013/02/13/smartphone-market-analysis-cycle-crash-325735/
Alcacer, Juan The Rise and Fall of Nokia. Harvard School of Business.
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