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    58 views20 pages

    2018 Nokia Case

    Uploaded by

    Sai Srikar

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 20
    ui IESE Business School Unversity of Na SM-1640-€ January 2017 Nokia: Rebirth of the Phoenix “Some men see things as they are and ask why. Others dream things that never were and ask why not.” ~ Nokia chair Risto Siilasmaa on May 25, 2016, quoting George Bernard Shaw “There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform's edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters. As the fire approached hhim, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The ‘man was standing upon a ‘burning platform,’ and he necded to make a choice. He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times - his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a ‘burning platform’ caused a radical change in his behavior. {.. “Nokia, our platform is burning. We are working on a path forward ~ a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But, I believe that together, we can face the challenges ahead of us, Together, we can choose to define our future. The burning platform, upon which the man found himself, caused the man to shift his behavior, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same." Excerpts from a memo written by Stephen Elop, then Nokia CEO, 2011 This case was prepared by Professors Eduard Calvo and Josep Valor, and Katherine Tatainov, case writer, Aiscussion rather than to illustrate cither effective or ineffective handling of an administrative situation, Sopvright © 2016 IESE. To order copes contact IESE Publishing via wwoviesep.com. Alternatively, write to iesep@lesep.com or cal +34 932 536 558, No part of this publication may orby any means - electronic, as the basis for class January 2017, 'Y be reproduced, stored ina retrieval system, used ina spreadsheet, or transmitted in any Form ‘mechanical, photocopying, recording, or otherwise - without the permission of IESE last edited: 1/12/17 a sunset Nokia: Reith ofthe Phoenin 1. Introduction maa, the chair of Nokia's Board since 2012, reread the “burning fen CEO, in 2011 and reflected on all that had In January 2016, Risto Si platform” memo written by Stephen Elop, the th happened to the Finnish powerhouse. Elop, who had moved from Microsoft to Nokia in 2010 as CEO, drafted the memo to rally the troops at Nokia to prepare for the clean-up that he would need to make after years of missed opportunities had put the company on a downward slope. Nokia, a significant contributor to the Finnish economy, gradually lost its grip on the market as it failed to meet the smartphone challenge of Apple's iPhone, Google's Android operating system and cheaper competitors in Asia. Nokia was still very focused on the particular features of each hardware device and was creating a particular device for each price range and type of consumer. This contrasted with ‘what the competition was doing and what the market required. It was no longer a market where handsets mattered. What mattered now was the ecosystem - the platform, the developers, and the applications available. As Elop himself would say many times, “It's not a battle of devices ~ it's a war of ecosystems. After two years of trying to tum the company around through changes in management, scrapping the Symbian platform in favor of the Windows Phone platform for Nokia devices in 2011, and attempting unsuccessfully to win market share through the Lumia line, Elop was unable to make the Finnish giant competitive again. By mid-2012, the company’s stock price had fallen below $2 and Nokia was buming through cash. In September 2013, Nokia announced it would be selling its troubled handset division to Microsoft. Nokia kept its mobile broadband and services business, Nokia Solutions and Networks, its mapping and its advanced technologies units and remained in Finland. Elop moved to Microsoft with the handset division, leaving the Nokia chair Siilasmaa as the interim CEO from September 3, 2013, to April 30, 2014. Siilasmaa’s leadership of Nokia, both as chair and CEO, sparked one of the most successful corporate transformations ever. Nokia transformed itself from a one-time market leader to a successful global technology powerhouse. The market capitalization of Nokia rebounded from some €5 billion soon after Siilasmaa started as chair in 2012 to more than €35 billion in 2016." As Siilasmaa reflected on the company’s path over the previous four years, he saw that more questions about Nokia's positioning, future acquisitions, and possible divestitures loomed in the near future. The transformation was not even close to being finished and Siilasmaa’s vision for this Finnish company was still growing. 1 over the same period, the Buro Stoxx 50 grew by 36% (while Nokia increased SOO). Source: Google Finance, naps. ooddecomlfinance?a=HEL&3 ANOXIAacin2k2AVIG7GOxxGb20-

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