The failure of Nokia is often attributed to the disruption cased to its feature phone industry by the likes of Apple, Samsung and Google. Yet that is too simplistic an explanation, as signs of Nokia’s decline were evident in the company’s working structure much before the launch of the first iPhone. By the late 1990s and early 2000s, Nokia was definitely the market leader, growing exponentially each year. However, this led to a highly fractured corporate strategy with emphasis placed on immediate gains. So, in the early 2000s, buoyed by its recent success, Nokia set up the NVO (Nokia Ventures Organisation) to explore business innovations. Ironically, it was Nokia which first developed a smartphone called Communicator back in 1996 and even a camera phone in 2001. Yet, these technologies were rejected by the top hierarchy as these innovations identified by the NVO were far too ahead of their time. They even came across something resembling the modern Internet-of-Things. Its Symbian Operating System (OS) was initially like the maker itself, a market leader but was soon found out to be unwieldy when compared to Apple’s IOS or Android. Nokia failed to seize the app market as perfected by Apple. They couldn’t shift gears towards a market where software was more the game-breaker than hardware. All this led to the sale of Nokia’s phone business to Microsoft in 2013.

Source:https://knowledge.insead.edu/strategy/the-strategic-decisions-that-caused-nokias-failure-7766

Uploaded Date:06 February 2018