Failure of Nokia why Nokia Failed and what are the reasons for that.

1. D A Y A NA N DA S A G A R C O L L E G E O F E N G I N E E R I N G
( A N A U T O N O M O U S I N S T I T U T E U N D E R V I S V E S V A R A Y A T E C H N O L O G I C A L
U N I V E R S I T Y , B E L G A U M )
FAILURE OF NOKIA
P R E S E N T E D B Y :
M A D H A N
J I T H E N D R A N
S U P R E E T H G

3. ABOUT NOKIA
 In 1871 Fedrik Idestam opened his second mill on nokianvirta river
which gave the name Nokia Ab.
 In 1898, Eduard Polon founds the Finnish ruber works, which later
becomes Nokia’s rubber business.
 In 1912, Arvid wickstrom sets up the Finish cable works.
 In 1963, starts developing radio telephones for the army emergency
services.
 By 1987, Nokia is the third largest TV manufacturer in Europe.

4. THE MOBILE ERA
 In 1981, the Nordic Mobile Telephone service, the world’s first
international cellular network and the first to allow international
roaming was launched.
 In 1984, Nokia launches the Mobira Talkman portable car phone.
 In 1987, GSM(Global System for Mobile Communication) is
adopted as the European Standard for digital mobile Technology.

5. NOKIA IN NEW AGE
 In 1992, Nokia launches its first digital handheld GSM phone, the
Nokia 1011.
 In 1994, Nokia launches the 2100 series, the first phone to feature
the Nokia Tune ringtone.
 The Nokia 2100 series goes on to sell 20million phones woldwide,
Nokia’s target was 400,000.
 Between 1996 and 2001, Nokia’s turnover increases almost fivefold
from EUR 6.5 billion to EUR 31 billion.
 By 1998, Nokia is the world leader in mobile phones.

6. CONTINUE…
 In 1999, Nokia launches the Nokia 7110, a phone capable of
rudimentary web-based function, including email.
 In November 2001, it launches its first phone with a built-in camera,
Nokia 7650.
 In September 2002 its first video capture phone, Nokia 3650.
 In 2002, it launches Nokia 6650 with the 3g Technology.
 In 2005, Nokia sold its Billionth phone Nokia 1100 in Nigeria.

7. THE TUMBLE DOWN!

8. COMPETITION…
 While it was not totally unexpected, what caught Nokia off-guard is
the rate at which competitors were innovating new technology.
 Since the launch of the iPhone and Android phones, Nokia failed to
keep up with the industry.
 While others kept proceeding ahead aggressively by ‘hook or
crook’.
 Nokia primarily failed to innovate attractive technology and
features.

9. CONTINUE…
 For example, though Nokia had touchscreen phones, if did not
attract customers as much as compared to Apple iPhones.
 The software being developed were using old development models.
 Nokia was cling on to Symbian OS for too long, the user Experience
and user Interface were being neglected.

10. TIME FOR CHANGE ?
 Olli-Pekka Kallasvuo, President and CEO, saw the company’s rise
to become the worlds preeminent mobile brand.
 With the company facing fierce competition, Nokia started reporting
financial losses and started loosing grip on the market.
 Kalasvuo was seen off by the management and he was succeeded by
Stephen Elop on September 21, 2010.

11. HUMAN RESOURCES?
 As per the Stephen Elop’s initial memo, which leaked to the press,
the company was on ‘burning platform’.
 This was regarded as very discouraging and one of the most
damaging memo in corporate governance.
 Market share fell drastically from 45% to 34% in 2011.
 Nokia posted a loss of 368 million Euros for Q1 2011.
 Although Elop tried his best, the company saw its worst days.

12. REDRAFTING STRATEGIES
 In 2011, Nokia joined forces with Microsoft to strengthen its
position in the smartphone market.
 Under the leadership of Stephen Elop, Nokia decided to stick to only
Windows OS.
 Nokia launched Windows phones series dubbed as the Nokia Lumia.
 In 2013, Nokia has a full portfolio of great Windows8 smartphones
Lumia 520, Lumia 920, Lumia 1020 which enables photography
never seen before in a smartphone.

13. CONTINUE…
 In September 2013, Nokia announces that it has entered in to an
agreement with Microsoft.
 Microsoft would purchase substantially all the devices and services,
the Nokia business which makes mobile phones and smartphones.
 Stephen Elop facilitated this deal and his role in it has been
questionable.

14. WHAT DID STEPHEN ELOP DO WRONG
Inspecting with the organization and human performance lens…
 During the 3 years Elop was Nokia CEO, Nokia revenues fell 40%,
Nokia profits fell 95%, Nokia market share collapsed in
smartphones from 34% to 3.4%.
 Nokia’s credit rating went from AAA to junk, Nokia’s share price
dropped 60% in value.
 The FINANCIAL TIMES calculated that Nokia shareholders ended
up paying Elop a bonus of 1million Euros for every 1.5Billion in
market capital that Elop was able to destroy while Nokia CEO.

15. CONTINUE…
 Stephen Elop was working with Microsoft’s Business Division
before moving to Nokia.
 He was the first non-Finnish CEO of Nokia and it is argues that
Stephen was sent with the sole purpose of devaluating Nokia as to
make it easier and cheaper for Microsoft to buy it.
 As Nokia dipped to the bottom, Microsoft announced that it had
bought Nokia for $7.2 Billion.
 Microsoft being a software giant always had ambitions to acquire a
hardware sector firm.

16. WRONG DECISIONS
 While the entire smartphones OS industry was evolving,
manufacturers moves on and adopted various OS like Android , iOS,
Meego, Nokia decided to stick to Windows OS only.
 As Android and iOS became more popular, Nokia and its Windows
phones failed to attract any attention.
 Though the new technologies developed by Nokia were ground
breaking. They were not promising enough.

17. CONCLUSION
 From Technology perspective, Nokia did not deliver as per
expectations.
 From strategy perspective, though Nokia did eventually come up
with lucrative products, it lost in the race against time due to poor
strategies.
 From the organizational and people perspective, the new CEO’s
attitude and competency proved to be fatal for the company.
Jithendrakumargowda.n@gmail.com