How Nokia Became a Business Giant and then Came to Its End

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NOKIA was established in 1865 in Finland and were in the business fields of communication, IT, Consumer electronics. NOKIA made a start in the telephone industry by acquiring the mobile manufacturing company MOBIRA. In 1982 first portable car phone named NOKIA MOBIRA Senator was launched by NOKIA which weighed 10kg. Then by doing continuous R&D, they launched a new set in 1984 named NOKIA MOBIRA Talkman which weighted only 5kg and NOKIA branded it as first transportable phone Then again improvements were made and finally in 1987 NOKIA MOBIRA Cityman came which only weighted 800gm. this phone gave NOKIA great popularity. Here we can see the importance of the continuous R&D to provide the customer with more better products. In 1991 NOKIA came with GSM phones, Prime Minister of Finland Harri Holkeri was the first person on the earth to make the first GSM call from NOKIA. Further, in 1992, NOKIA came with more smaller and compatible handsets like NOKIA-1011. This was the point where Nokia became a huge giant and has the great hold on the US and Europe market. In 1994 Nokia came up with NOKIA feature phone series like NOKIA-2100. These feature phones gave Nokia an iconic growth and popularity all over the world. The sold 20,000,000 phones which were even more than the company expected.

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In 1992 NOKIA predicted that the mobile phone industry will be of 40 million users but it resulted to be 250 million. At this point, NOKIA captured 25% of the total market share leaving Motorola far behind. By 2008, 468.8 million handsets were sold. Nokia had a great high-level management team which was continuously making improvements by keeping in mind the Market, Need and the Adoption Curve. Now, Nokia was a big giant and making sudden changes in their products was not possible for them because they didn’t have a lean and flexible manufacturing system which also somewhere a reason for NOKIA downfall. Nokia was doing best in their field but was underestimating the new entrants and the new emerging disruptive technologies like Apple and Google Android. Now, in American and European market apple and android phones started giving hard competition to the NOKIA and the emerging Asian markets new Chinese entrants were giving hard competition to NOKIA by introducing phones with extra features like Flap phones which was a change and something new for consumers.

Still, Nokia was making phones on the existing Operating system which was Symbian and forgot that every competitive advantage has a limited lifespan.

By 2007-2008 apple and google android have the low market share but by 2009-2010n they became a huge market holder leaving the NOKIA Behind. It is not right to say that NOKIA was not changing, NOKIA started to change but it was too late for them as they have lost the major market share. Still, Nokia tried to bounce back and made a collaboration with windows, which again resulted to be a huge mistake for them as they had no ecosystem.

Now if we see the reason behind the downfall of such a big giant we can see the following factors:

They ignored the new entrants and emerging disruptive technology.

Their Manufacturing system was not lean which was a hindrance for them to make a sudden change.

Missed to understand the shift of consumer interest from hardware to software.

NOKIA was failed to make an ecosystem which android has made.

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