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Case study nokia

  2. ABOUT THE CASE STUDY This case study deals with how the mobile company giant NOKIA captured the market and maintained its monopoly in its initial years . But later on, it failed to match up with rising competitors and ultimately resulted in the demise of the firm.
  3. HISTORY OF NOKIA • Nokia in its foundation years was not into mobile and telecommunication business. • It was established in 1865 as a paper mill by Fredrik Idestam at the Tammerkoski Rapids in south- western Finland. • In 1918, Finnish Rubber Works acquired Nokia and in 1922, Finnish Cable Works was also acquired by the newly formed conglomerate.
  4. • In 1967,Nokia corporation was officially born that mainly focused on four markets: paper, electronics, rubber, and cable. • In 1979, Nokia entered into a joint venture with leading Scandinavian color TV manufacturer Salora to create Mobira Oy, a radio telephone. A few years later, Nokia launched the world's first international cellular system.
  5. • In 1984, Nokia acquired Salora and changed the name of its telecommunications unit to Nokia-Mobira Oy. • In 1987, the company introduced its first compact phone called Mobira Cityman 900, which was also world's first hand- held mobile telephone. • In 1989, Nokia-Mobira Oy became Nokia Mobile Phones.
  6. • The last decade of 20th century and initial years of 21st century was a boom for the company within which it launched some of the most then renowned phones like Nokia 1100, Nokia N-series, E-series and many more making it the world leader.
  7. SUCCESS MANTRA • The phones provided by Nokia had a much higher re- sale value compared to other mobile phone brands. • Many of Nokia’s products were easy to use and were usually coupled with a variety of handy accessories. • Products offered by the company were available in all price ranges. • The biggest strength of the company was their brand name.
  8. RISING COMPETITORS • While Nokia enjoyed its leadership, the early years of 21st century saw the rise of several companies which came into the market with their mobile phones like Samsung, apple, HTC, etc. that later on proved to be the biggest competitors for Nokia.
  9. • In 2007,Apple launched its first phone-iPhone(1st generation) with its own operating system IOS. • In 2009, Samsung launched its first smartphone-Galaxy I-7500 running on Android platform. • Nokia expected to suppress these rising firms with its brand image and leadership in the market and continued with its existing technology and launched some new phones with slight modifications.
  10. • Its market capture went down drastically and people switched to these new phones with higher utility and user-friendliness. • Eventually, Nokia was losing its position in the market. Shown below are two graphs showing the change in market capture of Nokia in 2011 & 2013
  11. BEGINNING OF THE BIGGEST FALL • In February 2011, Nokia’s CEO, Stephen Elop and Microsoft's CEO Steve Ballmer jointly announced a major business partnership between the two companies, which would see Nokia adopt Windows Phone as its primary platform.
  12. • On 26 October 2011, Nokia unveiled its first Windows Phone 7-based devices, the high-end Lumia 800 and the mid-range Lumia 710.
  13. • In continuation to Lumia 800 & 710, Nokia along with Microsoft launched a number of windows-based phone but the fall continued. Following the second quarter of 2013, Nokia made an operating loss of €115m . • On 2 September 2013, Microsoft announced that it would acquire Nokia's mobile device business in a deal worth €3.79bn, along with another €1.65bn to license Nokia's portfolio of patents for 10 years; a deal totalling at over €5.4bn.
  14. • In February 2014, Nokia X was launched running on the Nokia X platform(Modified Android Jelly Bean 4.1.2) to compete with other android based phones in the market. But the phone was highly criticized and was soon discontinued.
  15. • Since then, Microsoft acquired Nokia came up with a number of phones but the fall continued and ultimately resulted in demise of Nokia. • Rumors are that Nokia will make a comeback in Q4 of 2016 with its android phone C1.
  16. WHERE NOKIA WENT WRONG • Nokia resisted change in its working operation. They stuck with their conventional mobile designs even when market needs were changing. • Nokia overestimated the power of its brand name. They expected to suppress new comers like Samsung and Apple with their goodwill but failed to do so. • Switching to windows didn’t pay well for Nokia. They should have worked on bringing android phones to match with their competitors.