Case study: The Rise and Fall of Nokia
By by Juan Alcacer, Tarun Khanna and Christine Snively
TEAM MEMBERS
Mahgul Khan ______18S-MBA-BS25
Varda Shaikh ______18S-MBA-BS19
Hiba Shaikh________18S-MBA-BS28
Maryam Qazi_______18S-MBA-BS10
Introduction of Nokia
• Nokia provides telecommunications
network equipment and services.
• It was world’s leading manufacturer of
mobile telephone handsets.
BUT
• Had to sale it’s assets to the Microsoft for
$7.2 billion.
• The sale marked as “sad ending to Nokia”.
Nokia’s Early History: 1865-1970’s
• founder of Nokia. • Merged to “Nokia corporation”.
• Nokia started as timber company. • 5 core businesses i.e
• He established wood-pulp mill in • Rubber.
town of nokia, Finland. • Cable.
• Due to European industrialization • Forestry.
and growing consumption of • Electronics.
paper and cardboard Nokia soon
• Power generation.
became successful.
Fredrik Idestam Bjorn Westerlund
(1865) (1960’s)
Continue…..
After 1971
Engaged in
1971 supplying
Telecom networking
industry, first infrastructure
wireless
1970 phones
First mikro
mikko office
computer
Slide Title
Nokia Under Different CEO’s
•Era of acquisition. •Era of challenges. •Implemented “ The Nokia Way”, •Regain market position.
•Largest consumer electronics •Streamlined management and highlighting core values. •Increased value of company from
company. restructured the firm in 6 •Back to basic approach, can’t approx 1 billion to more than 10
•First mobile phone “mobira divisions. afford mistakes. Do small things billion.
cityman”. •Fall of soviet union affected correctly.
•Buying binge, left company cash profitability. •Firm reduced to 4 divisions.
poor. •Banks hesitant to lend, left nokia
dependent on its own cash flow.
Kari Kairamo Simo Vuorilehto Jorma Ollila Rajeev Suri
(1977-1988) (1988-1992) ( 1992-2006) (2014-present)
NOKIA phones
Nokia is a pioneer and also a world leader
in mobile telecommunications
Nokia first digital hand handled phone for GSM (Global System For
Mobile Communications ) handsets sales were growing, in 1992
NOKIA had become the biggest producer of mobile phones in
Europe, and second largest producer in the worldwide. Nokia 1011
Characteristics
• NOKIA 1011 had an extendable antenna phones
• have memory that could hold only 99 phone numbers.
• Data inputs in numeric form though it has numeric key
pad and also send and receive SMS.
• TOW line display screen
Evolving Consumer Market
NOKIA expanded considerably in all areas to support customer
needs and the growth of the telecommunications industry.
NOKIA 2100 Series
In the same year 1992, NOKIA extended series 2100 was the first
smallest and lightest phones in 1992 it is designed as a user friendly
that includes
Features
• 5 line LCD display
• Soft touch keypad
• Selectable ringtones that could be personalized
• Phones become pocket sized
NOKIA 8100 series
In 1996 NOKIA 8100 introduced this model
in MATRIX movie in Hollywood
Features
• Sliding cover.
• Colored and exchangeable mobile
covers.
• Downloading of ringtones.
Nokia At Its Peak
• Nokia was the first to segment there product line.
• First to build a brand identify.
• First to understand that design was essential in this business.
• First to take advantage in global manufacturing in a business.
• Was the first mobile phone to offer web browsing.
Invested in research and development
also
hired young art school designers to keep up with trends
NOKIA’S EMERGING MARKET STRATEGY
• In the early 2000s, turned attention to emerging market.
• Estimated 600 million potential subscribers in china, India and
Russia.
• In 2002, Nokia reorganized itself into 4 division:
1. Mobile phones
2. Multimedia phones
3. Enterprise solution
4. Networks.
• in 2004, Sales slowed developed markets.
• Market shares fell from 35% to 28.9%.
REASON:
Failure to respond to new “ clamshells” or flip-phones.
STRATEGY:
Cutting price on selected handsets and eliminating
some models.
INCREASED COMPETITION
• By the mid-2000s, the industry was increasingly
competitive.
• New competitors from Asia entered European markets.
• Increased competition shortened the product life cycle,
increased pressure on design, manufacturing and
distribution.
• Nokia maintained a significant advantage in economic of
scale.
Industry shift to software
• Increased demand for new features and apps
• Operating system became an important factor in a
manufacturer’s strategy.
• By the end of 2007, Nokia’s symbian operating system
remained the most widely used in the world.
• The success of Apple’s iPhone solidified the industry’s
transition from handset-focused to software-focused.
THE U.S. MARKET
• In 2007, apple introduced the iphone, which ran on
Apple’s proprietary operating system(iOS), first
released in the U.S and available worldwide in 2008.
• By 2007, Nokia remained the leader in the fastest-
growing markets including China, India and southeast
Asia.
Nokia under Elop(2010-2013)
• “The burning platform”
In september 2010, Stephen Elop was appointed as
CEO of nokia. As he was also the former president
of Microsoft’s business division.
He got to know about the nokia’s failure, reasons
were:
• To release a product that compete with the iphone.
• Nokia’s profit margin had declined and market
share dropped down 40.3% in global market.
• Apple dominated the high end smart phone market.
• Symbian applications were not so advanced like
IOS and androids apps.
Elop recognized the challenges and wrote a memo to their
employees.
Memo stated:
“I have learned that we are standing on a burning platform and
we have multiple points of scorching heat that are fueling a
blazing fire around us and that needs to be changed”
In September 2011, to come out from the burning
platform the company took some bold steps:
• Nokia and Microsoft announced plans to form a
broad strategic partnership that would use their
complementary strengths and expertise to
create a new global mobile system.
• In September 2013, nokia sold it’s devices and
services business to microsoft and provided
access to nokia’s patent for ten years in $7.2
billion.
Eventually after the announcement of
partnership, nokia’s share price increased 40%.
Thank you
for listening…
