NOKIA, a company established in the year 1865 in Finland. It will always be a popular name in the minds of the generations when it comes to mobile phones. This Finnish company has a history of bringing in mobile phones weighing 10kg to the ones we can easily keep in our pockets.
Everything was going great for Nokia in the 1990s. In fact, Nokia had the highest market share during 2003-05. But with success and market share, Nokia had transformed into a giant structure. It had become huge and the system was not flexible enough to adapt to the upcoming market competitions.
America and Europe saw the birth of Google Android and Apple. This brought down the market share of Nokia in foreign markets. Similarly, the entry of Samsung and Motorola through the introduction of flip phones also diverted the market share from the Asian markets.
China could manufacture phones at a much faster pace. Hence the manufacturing units from America and Europe started shifting to China. Meanwhile, Nokia seemed to be lost in its rigid policy of not accepting a change and continued its operations.
Now that people had started valuing software over the competent Nokia hardware, the latter started facing a lot of issues. It had no intention of parting with its operating system “SYMBIAN”. But in competition to Android and Apple, Nokia’s operating system did not even have 20000 apps. Also, unlike Nokia, Google and Apple both had been successful in creating an ecosystem. Therefore companies like Samsung, LG, HTC, etc started adopting android whereas Nokia kept no intention to switch to Android.
NOKIA’S Reaction to the Competition.
Nokia decided to bring in a change and appointed Stephen Elop as its new CEO. It decided to switch to some other operating system. But, in spite of going for Android or even Nokia’s own OS Meego, it decided to approach Microsoft for Windows. Now the thought behind this step was to adopt a Blue Ocean strategy; wherein there are lesser competitors and one gets a chance to come out different from the crowd. But, the incompetency of Windows with compatibility of apps, and no proper ecosystem made this decision a huge disaster. If Nokia wanted, it could have accepted a Red Ocean strategy and just like Jio and Patanjali could have created their market in a well-saturated market.
Later on after such failures, Microsoft acquired the $50 billion Nokia for just $7 billion.
Who is to be blamed?
Stephen Elop became the new CEO of Nokia at the time it was struggling to compete with Google and Apple. Actually, he was the Internal Business Head at Microsoft before joining Nokia as the CEO. The corporate world considers this gentleman as a Trojan Horse set by Microsoft as in the self-interest of both this individual as well as Microsoft as a company. Nokia was a global giant and its competitors would not have overpowered it if it had joined hands with Android or even stayed at their OS Meego but the steps taken by Stephen Elop in bringing in Windows proved to a blunder for Nokia.
Even for Microsoft, as stated by the present CEO of Microsoft, Satya Nadella, the acquisition of Nokia by Microsoft was the worst decision. Microsoft did not use the brand equity of Nokia and also when it tried to enter into the Asian markets with feature phones, they were defeated by brands like Xiaomi, Huawei, etc.
The comeback of Nokia.
Microsoft, under Satya Nadella, sold Nokia to HMD Global, a company formed by the ex-employees of Nokia. Now Nokia is trying to bounce back from where they actually started. The Sales, Marketing, branding are handled by HMD Global and the product is manufactured by Foxconn. The company uses the brand equity of Nokia unlike Microsoft as it claims that Nokia still has the highest recall value. They are trying to convert feedback into feed-forward and trying to correct all the wrongs done in the past like building in more distributors, retailers’ relationships, setting up more after-sales service centers, etc. And above all the HMD has finally agreed on using Android as their OS which if Nokia had done before, it would still have been one of the most highly valued global giants in the world.