Summarize the case study regarding Nokia Case PDF

Preview

Summary

Nokia Case...

Description

1. Summarize the case study regarding “Why NOKIA disappeared”. (5 marks) From the article, summary of timeline of Nokia important moments:  December 1988: CEO Kairamo commits suicide  January 1992: Jorma Ollila is appointed as CEO  Year 1998: Nokia was the market leadership in mobile phones, had 3040% market share  Year 2007: Nokia owned 40% market share and was leading mobile device manufacturer in the world  Year 2011: Market share dropped to 25% and started collaboration with Microsoft  Year 2013: Nokia sold its entire mobile business to Microsoft  Year 2015: Market share was only 1%  Year 2016: Microsoft stopped manufacturing mobiles from Nokia  After the incident of CEO Kairamo commits suicide, Nokia company suffered problems among the top managements and owed a heavy debt. Nokia lost their direction and had poor business performance at that time.  Selection of Jorma Ollila indicates the successful period in Nokia business. During Jorma Ollila period, the company rose from the bottom. Nokia recorded a significant rise of their earnings by 385% in year 1993 compared to previous year. Jorma Ollila leadership was lead the company to successful achievements. Nokia was the best selling mobile phone brand and market leadership in year 1998.  It can be obviously seen that Nokia lost major dominance in mobile phones manufacturing industry after 2007. The new entry of Apple and Google has brought Nokia’s struggling to maintain market share in mobile industry. Apple introduced iPhone and Google started development work on Android in 2007. These are the significant events that happened in 2007 because the developing computers and internet service companies started involve in mobile device business.  However, this article states that the managers underestimated when the Apple launched the first iPhone in 2007. Nokia was over-confident and did not realize that past success does not equal future success. Nokia survived the 1995 crisis and the early 2000 dot-com boom, and its analytical and conservative approach seemed to be working well in periods of change. Nokia got support from the local community and became a role model for other companies. All these made Nokia overconfident and lead Nokia left behind with the competitors.  Nokia failed to respond to threats and challenges posed by iPhone. It is noticeable through Nokia operating system: Symbian was not competitive and reached to the end compared to Apple iOS and Google Android. Nokia could not adapt themselves in the technology changes . In contrast, Apple put a lot of effort in creating and adding new values to their iPhone

such as developing touch screen function and originated AppStore which brings huge revolutions to software in mobile phones.  Moreover, the organizational structure of Nokia which were too controlling and bureaucratic contributes to the business downfall. The decisions were made by the top managements and there were only a few of them knew the technological changes and mobile device transformations. As a result, the top managements could not receive feedback and ideas from the bottom management teams.  Adding on, the lack of efficient management of Nokia also contributed to its downfall. The communication between departments and functions were limited owing to the rigid and isolating organizational structures. Being a giant corporation, the barriers between the level of hierarchy and different departments did not aid in handling technological breakthrough from other competitors. Nokia became a technological mammoth and cannot react the accurate and productively to step up its game. Information did not move freely in the corporation and mostly stuck in the transmission between departments. This very drastic change in the mobile industry had toppled the giant Nokia to point zero

2. Why did Nokia miss consumer trends? Elaborate it. (5 marks)  Firstly, it's because Nokia itself did not adapt to change. The technological advancement in the mobile phone industry was rapid. he traditional phones changed to smartphones, but Nokia did not change accordingly. Although, it was the initiator of the early smartphones. Symbian smartphones were introduced in the year 2002, but the company could not manage with the pace of the changing technology. That is why Nokia failed. It kept on producing the old version of the phone, whereas the competitors started to pour in the highly advanced smartphones. These smartphones got affordable for the users, and ultimately, the entire cult of society shifted to them. Even then, Nokia did not realize what was going on and did not transform its strategies. Thus, over time, with the shifting of all its target market to a newer and better version of the phone took place, leaving Nokia far behind the new entrants of the market.  Nokia was self-satisfied and over-confident. Nokia used to own 52% of the global market share and that made them felt hubris where they think they've already won before they managed to keep up with the changes ; consumer trend towards 'content'. Nokia missed consumer trends as they just wedge features into their old candy bar, basic little phones. Nokia did not understand the demand of the current consumer trends and they are not evolving along with the trend. The new world order is that consumer enjoys using phones with more features and people want phone that can do more than what Nokia phone does. Eventually, Nokia went from a dominant position of 52% of global shares, to a stage where the brand is ripped off completely. They failed to understand the real definition of

content, and they underestimate their competitors, and their hubris is the main reason how Nokia blew a big lead in mobile phones.  Lack of innovation and creativity. Nokia did not innovate in designing software, apps and interface of the mobile devices. Nokia did not create value propositions and values to the customers. Nokia stuck to Symbian operating system although it realized the operating system is reached its limitation compared to Android and iOS. Android and iOS were more userfriendly and well integrated. It is too late when Nokia collaborated with a well-known software company: Microsoft because the Apple and Samsung has already took over the market share that previously owned by Nokia.  Lack of vision. Nokia aimed to produce the mobile phones in cost efficient and large scale market. Nevertheless, Nokia ignored about importance of product differentiation and innovation in order to stand out from the competitors. Nokia did not react fast with the changing of consumer preferences when Apple launched iPhone in the market. On the contrary, Apple aimed to provide consumers intuitive, innovative, and simple products. For instance, Apple customized traditional mobile phones to touch-screen functions. Nokia defines their business vision and mission too narrowly.  The technology advancement of Nokia is low. Nokia was paid more attention to the hardware compared to the software. Nokia was considered as an engineering company since its inception. Nokia did not concentrate in establishing software and programming. Nokia missed customer trends as their customer preferred to choose companies which would utilize high technology in providing a fully functional smartphones.  The heaviness and bureaucratic management and organizational structure cause Nokia missed their consumer trend. The top management of Nokia had the all authority and power in making decision. However, there were a few of them knew the paradigm shift of mobile phones industry. Moreover, there are lack of communications between different departments and functions. As a result, lack of teamwork and collaboration in Nokia company which would slow down their innovative process. 3. From your point of view, what are the new entrepreneurs’ needs from the lessons of “Why Nokia disappeared”. Explain it with the concepts of entrepreneurship that you have learned. (5 marks)  Having passion and being customer-oriented are the defining characteristics of an entrepreneur. It implies that just working for money and just thinking about one's self is the opposite of being an entrepreneur. Therefore, an entrepreneur should create a culture that focuses on individual passions and talents rather than instilling fear of superiors inside the company. When fear permeated all company levels as in the

case of Nokia, employees at the bottom of the hierarchy only think about securing their jobs and always put themselves instead of customers first.  The failure of Nokia in capturing the market share and trends is one of the lesson. So, from this lesson, new entrepreneurs need to understand what is the business trend and what is the market need, instead of focusing on large manufacturing. Innovation is important to survive in this extremely competitive business world. We should learn from Apple and Android, they keep innovating their product and keep developing their products as the trend changes. Never leaving behind the change in the market trend is the key to success! The entrepreneur have to sensitive and react agility to the market. Any changes in the market have take into consideration by entrepreneurs. In current competitive business environment, any mistaken step or decision will harm to the business and miss the market share.  Organizational culture and structure are prominent to a business. Nokia made a big mistake which are are lack of communication and collaboration among different departments and workers. It cannot stimulate the innovation process since not all the workers involve in. Employees are the valuable asset for a company. New entrepreneurs should encourage team collaborations and listen their employees’ opinions and ideas by using bottom up approach when making decisions. They should trust their employees and provide happy and relaxing working environment to create motivations to them.  From my view, Nokia fails to innovate their product revolutionary when their competitors Android and Apple are able to do so. They instead focus on manufacturing large volume of products tailored for different customers and markets only in a long period of time. It means Nokia is becoming finance-oriented business instead of being technology-oriented business which is to be the disadvantage for the huge company like Nokia on that time. Thus, we should learn from Nokia that new entrepreneurs should always innovate our business product and learn from our competitors in order not to be outdated by them although being a leader for a particular business product.  Extreme hubris and confidence is the main reason that Nokia disappeared. Nokia are self -satisfied and self-confident since it was the market leadership in the mobile industry. They underestimate the existence of smartphones and overestimate the strength of their brand. Therefrom, new entrepreneurs should always hungry for improvement instead of extreme hubris towards their achievements. We should always alert the warning signs from the market and be humble to receive reviews and feedback from the costumers, partners and employees. 4. From your point of view, what are new marketing strategies that should be possess by the new entrepreneurs in this new era of Industrial Revolution 4.0? (5 marks)

 The Fourth Industrial Revolution is about the fusion of digital, physical and biological worlds.Thus, the new marketing strategy should be to always embrace digital methods of marketing like using the social media. When executing marketing plans, the new reality must be kept in mind. Before the era of personal computers and smartphones, face-to-face marketing and paper advertising are the norm. Now, people spend much of their time online. New entrepreneurs must be very aware of this.  Innovative marketing strategies should be possess by the new entrepreneurs to embrace the Industrial Revolution 4.0. Utilization of new technologies such as virtual reality, augmented reality and Internet of Things (IoT) in marketing to give refreshing experience to customers. For instance, Ikea launched the Catalogue app to allow the users access company’s product and view how the products suited their home spaces through augmented reality. Besides, L’Oréal launched Makeup Genius apps to give users new experiencing in doing digital makeover and makeup. Innovative marketing will attract customers in the ways of creativity because consumers always love to experience new things.  New entrepreneurs should get involved in your community. Our presence in our local community can also have a big influence on our ability to attract and retain customers. Getting involved with other local businesses and philanthropic efforts “allows each location to be locally relevant in their market,” says Davis. For large businesses opening new locations, getting involved with the community makes your business approachable for local customers. We want to be the new business that people tell their friends about—word of mouth referrals can be extremely valuable, especially for earlier stage businesses.  The new marketing strategy is solving the customer's problem. New entrepreneurs should market their product that can ease or solve the burden of the customers. It makes content of product to become more appealing and interesting. Moreover, new entrepreneurs should try to build or maintain a product brand by always innovating the product lines, better to have revolutionary innovation if possible like Android and iPad like they successfully to be the winner into great innovation on software and system in the smartphones since they think out of box on product innovation.  New entrepreneurs should use search engine marketing and search engine optimization in their business. This will increase the brand visibility in search engine and users will get to know their business promotions through online. It is very important to use online advertisements methods because almost all of us are surfing on the Internet every day. On the other hand, newspaper advertising and magazine will be lack of efficient in the new era of Industrial Revolution 4.0. 

Online advertising campaign is one of the new marketing strategies that should be implemented by the new entrepreneurs. Most of the people are using e-commerce in daily purchase either in business-to-business (B2B)

or business-to-consumer (B2C) instead of shopping physically. Online advertising campaign such as online sales, online promotions and infographics gets more attentions from the consumers. This could drive the sales and build the brand awareness....