Nokia was not failed. Nokia was murdered.
let’s see, entire case study about why Nokia failed?
As we know that Nokia is a branded reputed company.
Nokia gave services in a lot of fields like- communication, information technology, consumer electronics and it was the world’s biggest mobile company.
But here question is why nokia got failed after covering a whole market.
Journey of Nokia
|Founded||12 May 1865,155 years ago in Finland|
|1982||They introduce their first car phone in 1982. (it’s about 10 kg)|
|1984||in 1984 they launched the t transportable phone. it’s about 5 kg)|
|1992||Nokia launched the ‘1011’ handset|
|1994||launched the 2100 series first feature phone.|
|2003||launched model 1100|
|2005||launched model 1110|
Starting of Nokia:
Nokia does not set up manufacture plant of its own, there was a one telephonic company named Mobira
They brought Mobira and then started making telecom handset.
Then Nokia introduces there first phone name ‘Nokia Mobira city man’ which is light in weight (800 gm) and it’s totally wireless.
Its sale increased day by day these phones was liked by many people and everyone wanted to buy that phone.
Now, after some time Nokia had a good reputation and branding in market.
Finland’s prime minister Harri Holkeri is the first one who called the first GSM call by Nokia’s phone.
Everything is going well and in 1992, Nokia launched the ‘1011’ handset
Nokia 1011 also get succed and it’s speedily spreading into Europe and U.S markets. because no other company in competition of nokia
And in 1994 they launched the 2100 series first feature phone. it gives iconic growth to Nokia.
Now this time they can’t even forecast their sells.
Their main target was selling 40,00,000 units but it’s sold 2 crore phones.
This was the Great succeed for any company!
They are growing more than their expectations and that is called the skills of Knowing the market, needs, and Adoption curve. these are the skills you needed if you want growth over your expectation.
So, according to the current scenario in 1992, Nokia predicted that by 1999 there would be 40 million handset market size in the world.
But unfortunately, Nokia was wrong !
They predicted 40 million, but the market size was increased by 250 million.
Basically, the best thing was the Nokia beat Motorola and become number 0
Nokia captured a 25% market share in 1997-1998.
first, they started their business in America and Europe and after that, they start a business in Russia, India, China, and other developing countries.
And, from 2003 to 2005 they launched there two new models from 1100 and 1110 and it’s capture 70% market through it.
Now, Nokia’s manpower increase day by day it’s manufacturing increase it’s plant global presence increased day by day, and overall Nokia started more growth.
In parallel, Other new companies started launched their phones in the market like Oppo, Vivo, Samsung, zen, mi, lava, Intex, and many more.
Learning From Nokia!
the thing is for the long game you have to be flexible in nature, and it’s called a lean manufacturing system.
This system included define, measure, analyze, improve, and control. Flexible nature is really very important.
Now, the bad thing happened for Nokia in the American and European markets Apple and Google arrived and in the Asian market, Motorola and Samsung launched their new models with the new features phone.
Now china started producing the same features phone at a lower cost.
‘every competitive advantage has a limited lifespan. around 2008 -09 china become hub of the mobiles.
In 2010 the world interesting in software more than hardware.
Nokia provides good hardware, or you can say strong phones, but the new other companies working on new features, new apps, and all.
Now I gonna tell you the main part that,
How was Nokia murdered by intelligence?
Android build a strong community, that is why all Samsung, L.G, lava, Motorola, and the company started shifting towards android except Nokia.
Now here the learning thing is
‘Interdependence’s community it’s called ecosystem ‘, and this is the game-changer.
So, because of the android Samsung, L.G, HTC, increasing their market day by day,
On the other side, Nokia is not ready to make any change.
The reason why you need business flexibility!
Nokia started to lay off employees to reduce overlaps. & Nokia does not want to go with android they want to be different from others,
And that’s why Nokia goes with Microsoft, not with the android,
That was the biggest mistake Nokia did on that time.
Because windows not compatible with mobile apps windows is totally different, and the main thing is windows has no ecosystem.
Now in present Nokia have no place in the market and Android makes there ecosystem like hardware, softer, developer, application, e-commerce, advertising, search, social application,location-based services, unified communications.
But, Nokia come back.
Now I will tell you How it would come back?
and also you are going to learn,
Four important lessons from Nokia Failure!
which will surely help you in your business growth and you can apply in your own business.
I learned four-measure things from Nokia’s whole journey.
1.Stephen Elop’s native will
The first lesson is, Stephen Elop He was the leader with favorable skills but unfavorable will.
Stephen Elop’s was the second CEO in Nokia and he was the leader with high competence and low character.
He would destroy Nokia by making it a Microsoft shop.
Actually, his main aim behind buying Nokia was the way to solve the Microsoft CEO succession Question for Mr.Ballmer’s job.
Now, what is your learning? Comment below your opinion
But I will tell you my learning,
The learning is you always hire a competent person but if his character is not appropriate don’t hire him.
See, I know skills are important but if the will is not there then be safe that man is not good for your business.
and always remember one thing
An uneducated thief can be less harmful but educated is highly harmful than that!
The second lesson I learned is wrong acquisition.
Biggest mistake of Microsoft did is they spend around $7.2 billion,
just because they want a one hardware company.
But the question is,
If they spend a lot of money on Nokia, then why they are not using their name?
Actually, the thing is Microsoft wants there own hardware and own software the same as the apple.
And they made two mistakes one is incompatible, and the other is an expensive acquisition.
So, the learning for you is don’t make the same mistake as Microsoft do.
The third lesson is,
it’s okay to be the last mover but at least be a fast mover.
Why i am telling this?
Understand, Microsoft comes at that time when apple and android already create their ecosystem.
First, mistake late mover, but Microsoft is slow as well.
Let’s take the example of JIO company
it is the last mover, but it is a fast mover.
it takes fast action against the idea, Airtel, Vodafone.
The next example is Patanjali is the last mover in FMCG, but it takes fast moves against Himalaya, Dabar, Baidynath.
But, Microsoft is a late mover as well as a slow mover.
The thing behind is it’s not able to give something unique to the consumer.
So always be a first mover and if not then it’s okay but doesn’t be a slow mover.
This is a very common mistake made by many of Startups and business, Business is a deal between two people providing value in exchange of money.
Their mistake is that feedback converted into feedforward.
There is one company called HMD which is started by all those old good and Sharpe-minded employees of Nokia company.
And they purchased Nokia back by Microsoft and start making phones again but this time they converted all the Nokia mistakes in Nokia’s strength.
They go with the android and start making all categories of phone
so basically HMD doing all the sales, marketing branding. and the phones are designed by Foxconn.
Now, Nokia works well just because of their old brand equity old recall value, band trust and the main thing have they converted all the feedback into feedforward.
So learning point here is, your every customer gives you a signal, or you can say feedback do convert into feed-forward do work on it.
If you want to start a business from scratch you can read my another blog :
In this Blog I give full case study how Nokia die.
Currently China manufacture Nokia device.