Guru Nanak Dev Engineering College

Bidar Karnataka – 585402

Academic Year – 2022 -23

Department of MBA

Name : Sardar Pavith Singh

Semester : 2nd
Roll No : MBA82/22
USN No : 3GN22BA041
Subject code : 22MBA25
Subject : Strategic Management

Submitted to :
Prof. Harshvardhan M
 Nokia Company

Nokia is a Finnish multinational telecommunication, information

technology, and consumer electronics company. Founded in 1865, it
initially manufactured paper products and rubber boots. Over the
years, Nokia transitioned into the telecommunications industry and
became a global leader in mobile phones during the late 20th
century. However, it faced challenges in the smartphone era and
eventually sold its mobile phone business to Microsoft in 2014.

Since then, Nokia has focused on network infrastructure, providing

solutions for telecommunications companies worldwide. They
specialize in 5G technology, cloud computing, and internet services.
Nokia continues to be a significant player in the telecommunications
sector, supporting the development of advanced connectivity
technologies.
 Failure Of Nokia Company

Executive Summary:
Nokia's downfall stemmed from a combination of internal and external factors.
Internally, poor strategic decisions, including a slow adaptation to
smartphones, an insistence on the outdated Symbian operating system, and
frequent leadership changes, hindered the company's ability to innovate and
compete effectively. This lack of strategic focus, coupled with supply chain and
manufacturing issues, contributed to declining market share.

In summary, Nokia's failure resulted from a failure to adapt, innovate, and

make timely strategic decisions while facing relentless competition and market
shifts. Although the company pivoted successfully to network infrastructure, its
decline in the mobile phone industry serves as a stark reminder of the
consequences of complacency and the need for adaptability in the ever-
evolving tech landscape.
Internal Factors:
Nokia's decline as a dominant player in the mobile phone industry can be
attributed to several internal factors:

1. *Lack of Innovation:* Nokia was slow to adapt to the smartphone revolution.

They relied heavily on their traditional feature phones while competitors like
Apple and Samsung introduced innovative smartphones that captured the
market.

2. *Operating System Choice: * Nokia's decision to use their Symbian operating

system while competitors like Apple and Google adopted iOS and Android
proved to be a significant setback. Symbian was not as user-friendly or
developer-friendly as its competitors.

3. *Internal Bureaucracy: * Nokia's organizational structure was often criticized

for being slow and bureaucratic. This hindered quick decision-making and
innovation.

4. *Failure to Embrace Touchscreen: * Nokia was initially resistant to

touchscreen technology, which became a standard feature in smartphones. By
the time they adopted it, they were playing catch-up.

5. *Ecosystem and App Store: * Nokia struggled to create a thriving app

ecosystem like Apple's App Store or Google Play. This meant fewer apps and a
less vibrant user experience for Nokia customers.

6. *Management Issues: * Leadership changes, including the infamous Stephen

Elope era, brought about a series of strategic shifts and restructuring that may
have further destabilized the company.
7. *Competitive Pressure: * The intense competition in the smartphone market
meant that Nokia had to keep up with rapidly changing consumer preferences,
which they struggled to do effectively.

8. *Ineffective Marketing: * Nokia's marketing campaigns didn't resonate with

consumers in the same way that Apple's "iPhone" marketing did. This impacted
brand perception.

External factors:
okia's decline was not solely due to internal factors; external factors also played
a significant role in the company's downfall. Some key external factors include:

1. *Rapid Technological Advancements: * The mobile phone industry saw rapid

technological advancements, especially with the emergence of smartphones.
Nokia struggled to keep up with the pace of change.

2. *Strong Competitors: * Fierce competition from companies like Apple and

Samsung, which introduced innovative and compelling smartphone offerings,
made it challenging for Nokia to maintain its market share.

3. *Ecosystems and App Stores: * The success of Apple's App Store and Google
Play created strong ecosystems around iOS and Android, attracting developers
and users. Nokia's Symbian and later Windows Phone platforms couldn't
compete in terms of the app ecosystem.

4. *Changing Consumer Preferences: * Consumers increasingly favored

smartphones with touchscreen interfaces and a wide range of apps, which
Nokia initially failed to deliver with its Symbian and Windows Phone devices.
5. *Global Economic Factors:* Economic downturns in various regions affected
consumer spending, making it harder for Nokia to sell high-end smartphones,
especially when compared to cheaper Android alternatives.

6. *Patent Battles:* Nokia engaged in legal battles over patents with

competitors like Apple, which led to financial losses and distractions from core
business operations.

7. *Global Expansion Challenges:* Entering and sustaining market share in

emerging markets, where feature phones were still prevalent, presented
challenges for Nokia due to competition from local manufacturers.

8. *Supplier Relationships:* Nokia's relationships with suppliers, including

component shortages and pricing issues, influenced its ability to compete on
cost and innovation.

9. *Currency Fluctuations:* Exchange rate fluctuations impacted Nokia's

profitability as it operated in multiple global markets.

10. *Government Regulations:* Changes in regulations, such as tariffs or

restrictions on technology exports, could impact Nokia's global operations and
supply chain.

11. *Mergers and Acquisitions:* M&A activities in the tech industry could
impact Nokia's competitive position and partnerships.

Conclusion:
Nokia's failure as a company in the mobile phone industry can be attributed to
its inability to effectively respond to the rapid innovations and competition
brought forth by companies like Apple and Samsung. These competitors
capitalized on changing consumer preferences, embraced touchscreen
technology, built robust app ecosystems, and adapted quickly to market
dynamics. Nokia's failure to match these factors resulted in a decline in market
share and ultimately, its fall from dominance in the mobile phone market.