The Rise and Fall of Nokia

Introduction

Nokia was considered as a synonym for the mobile phone corporation as it had maintained high standards from 1998 to around 2012 before Microsoft ultimately bought it off. The age of revolution may have been the cause of this sale, but Nokia had been a communication company for over a hundred years (Khanna, Snively, & Alcacer, 2014). The fall of Nokia came at a time when the world was shifting to the use of smartphones; it contributed to the fall of one of the greatest mobile phone brand.

Strategic Actions

The transition from a pulp and paper manufacturers contributed to the strong will and determination by Nokia to aim higher as a consumer electronics manufacturer (Khanna, Snively, & Alcacer, 2014). Nokia had a competitive intelligence and strategy that helped it maintain its standards for over a decade. Nokia branded phones that many people could use, and they tried balancing the cost by offering different brands at different prices. The company tried to incorporate the aspect of customer relationship management and customer satisfaction and in turn encompassed customers as a part of the corporation.

The company tried to incorporate various strategies; the most crucial were producing quality products. The company’s vertical and horizontal scope worked effectively in both ways as the management and the employees worked towards ensuring they remained a top corporation. Nokia was the world’s leading mobile manufacturer, and the company’s downfall was not anticipated. It had tried to maintain its standards by offering quality products and satisfying the customers.

However, the transition to an era of smartphones may have been the cause of the company’s downfall as they did not manage to innovate to fit in (Jia & Yin, 2015). Nokia had taken the one hundred years it had been a communication’s company to accumulate its brand and once it did that it sold it off when it was expected to continue being at the peak. The decline of Nokia presents a big challenge to company’s mentality and strategic plan while it caused irreparable damage to the Nokia Enterprise (Jia & Yin, 2015). The company did not live up to the billing, and this can be attributed to the lack of a clear and creative strategy to be innovative in the take-over of the smartphones.

Nokia and the Ecosystem

The general purpose of the computing platforms determines their success by managing the ecosystem and creation of a standard technical architecture (West & Wood, 2013). Nokia worked over the years towards ensuring it maintained a respectable image, in 1996 it announced the Nokia communicator; this was the first type of PDA phone (West & Wood, 2013). Over the years, Nokia collaborated ecosystem dedicated to connecting the unconnected (Machi, 2016). Nokia partnered with Aricent and NetComm Wireless in a bid to expand the network ecosystem.

Nokia experienced three transitions since its invention, from rubber, paper to cable, from cable to mobile phones and finally from mobile phone transiting to mobile internet (Jia & Yin, 2015). The company maintained its standards both internally and externally and acquired the recognition it deserved. However, this did not prevent it from declining and losing its status, which it had developed over the years. The former transitions helped make Nokia great and defined a great extent of what Nokia stood for. However, the latter transition was harder and ultimately shows the fall that the company encountered.

Decisions

Nokia reached a great height when it managed to overtake Motorola in the year 1998, and it achieved a similar milestone when developed Nokia in China in 2006 (Jia & Yin, 2015). The company was on the rise, and its reputation served to show the great extent it could have risen. However, the promise and potential that it beheld were lost when Microsoft bought the company in September 2013. This overtakes deemed Nokia to its downfall while it brought about a notion that even the mighty can fall. Nokia was on the course to being the greatest; it had seen its sales and exports in China rise extensively in 2006 (Jia & Yin, 2015). The corporation was supposed to input more creativity and innovations to achieve this in other nations. However, it opted for what it perceived as the easy way out, which, turned out to be the downfall of one of the leading mobile handset manufacturer.

The company’s decline started in 2007; rhetorically it was considered Nokia’s harvest year as the global market share reached 40% in China (Jia & Yin, 2015). The glory days of Nokia seemed to be fast ending. This was the appropriate time to come up with a strategy to further development and growth. Nokia was supposed to act fast to avoid the untold demise.

In 2008, Google making it the new market reform released the smartphone operating system of Android (Jia & Yin, 2015). This shift meant that Nokia did not occupy the first position anymore and the storm led by iPhone and Android proved to be the market mainstream. Nokia was ranking third, and in 2011, its shares had dropped by an extensive 19% from the previous years, a fall much worse than that of Samsung and Apple (Jia & Yin, 2015). Nokia should have reacted to this, and since they had a brand and the resources, they were supposed to rebrand and bring into the market something that could compete with these changes.

Nokia was widely known and used all over the world, and thus a certain developed would have helped saved the company. The company refused the urge to be innovative and creative in a bid to retain the first position. Nokia had a good record for manufacturing mobile phones and encompassing a high level of management leadership, and thus the company was supposed to go back to the table and encompass the employees in trying to come up with a strategy to outdo their newly acquired competition.

External Factors

During Nokia’s transformational years, the company developed consistent auxiliary merchandises, which were meant to help the sale of mobile phones. The company was not limited to what it did, it also encompassed external factors and tried to ensure that it gave the customer what they wanted and needed. The company developed the idea of mobile internet and efficiently developed the internet brand Ovi in a bid to raise sales and to stand out (Jia & Yin, 2015).

The external factors strongly influenced the fall of Nokia. This is because Nokia was defined by its ability to give the customers what they wanted, but it eventually failed to do this for the iPhone and Android take over. The first mobile phones to be developed were embraced by the people as a tool of calling (Jia & Yin, 2015). However, the other phones that followed were more developed as people could use them to listen to music, watch videos, and surf. These developing trends should have shown mobile phone manufacturers the need to be innovative and to come up with something better each time. However, Nokia executives did not grasp this concept properly, they did not read the market accurately, and that is why they were unprepared from the shift of power as they lost their dominance.

One can argue that Nokia’s technology, its engineers, and designers were the cause of the company’s crisis, but the strategic explanation is that Nokia ignored the external factors, mostly; Nokia ignored America (Schrage, 2011). The company refused to compete and in turn tried to preserve its markets in Asia and retain its dominance in Europe. The company failed to put into considerations that America was the richest nation in the world and thus literally and figuratively, America was bound to offer more competition than other nations (Schrage, 2011). The company should have understood the market better and be prepared for greater innovations because they were bound to happen. However, the company was outdone by the competition it could have outdone and wiped out before it happened. The company failed to understand the changes in market trends and fought of competitions in the wrong places.

Conclusion

Nokia was one of the greatest, and it ultimately led itself to its destruction. The company gave up its dominance and superiority in the handset manufacturing when it let Microsoft take over. The company should have been more prepared for changes in the market and be more innovative and creative in a bid to overcome the challenges and competitions it encountered.

References

Jia, J., & Yin, Y. (2015, September 25). Analysis of Nokia’s decline from marketing perspective. Open Journal of Business and Management, 3, 446-452.

Khanna, T., Snively, C., & Alcacer, J. (2014, February 21). The rise and fall of Nokia. Havard Business School.

Machi, S. (2016, August 10). Nokia networks. Retrieved from http://www.blog.networks.nokia.com

Schrage, M. (2011, February 15). The real cause of Nokia’s crisis. Havard Business Review.

West, J., & Wood, D. (2013, June 11). Evolving an open ecosystem: The rise and fall of the Symbian platform. 30, 27-67.