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Summary of Strom, R., et. al. (2014) "The extraordinary rise and rather undistinguished decline of NOKIA"

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History of NOKIA: From the King of the world to the ****** of Microsoft.
1865-1920: founded by private investors, in 30 years it had a lumber mill, a pulp factory, a paper factory, an electrical power generator and many other things 1920-1960: Global focus. NOKIA went public. 1970-1980:Started to acquire like crazy New director Kari Kairamo: His idea was "rapid expansion" NOKIA became the largest electrical wholesaler and the third largest TV provider in Europe But NOKIA was not strong enough to dominate its competitors 1980-Today: Mobile information By 1986 it had a lot of debt and needed to be restructured. Simo Vuorilehto was appointed CEO First step: concentrate exclusively on the strategic business and get rid of everything else. The shares started to fall! 1992: Jonna Ollila replaced Vuorilehto. Ollila was the head of the mobiles phone division, so he moved that business forward. This move Made NOKIA the first company to recognize that all phones were a big deal. Three attributes championed by the CEO - Product innovation - rapid responsiveness - flexibility Strategy in 2000 - Concentrate on fewer business. Expand worldwide - Develop local manager's capacities (like the Romans) - Establish brand image - Focus exclusively on wireless - Leverage money and managers to gain foothold in China. 1997: NOKIA realized that the future was in the Internet, so they concentrated in two areas: 3G - Intended to be a harmonized worldwide frequency spectrum - It would have been a success if Mot for the unbearable delays in rolling out 3G networks WAP (Wireless application protocol) - Open standard to allow phones use the Internet, - It had so much potential that NOKIA went from $160 billion to $250 billion in market share value in less than a year 2000's: Things were so good that they started to dream about having an unimaginable 40% global market share. The investors were al cheers and smiles But then, things started to go south - With the business being so big, power struggles began to develop internally - The competitors started to squeeze from all sides And in 2005, Ollila stepped down

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Summary of Strom, R., et. al. (2014) "The extraordinary rise and rather undistinguished decline of NOKIA" 2005: 0Ili-Pekka kakasvuo took over BY 2006, things looked a little better and promising But then, in 2007 CATASTROPHE! Steve Jobs presented the iphone. - However, NOKIA was unmoved. The attitude was: "been there, done that" - Even Microsoft was unperturbed, Just giving a condescended over-the- shoulder look to the iphone - Only by 2011, when Apple had already ran away with the majority of the profits, did Nokia realize that they were competitors. And then, they started to research on how to respond to this , and the response wouldn't be ready until 2014 (the most optimistic expected) BY 2010, with very displeased shareholders, the CEO proposed a strategy of "Accelerated innovation". It didn't work. - They created the N8, but it was a failure - Pekka stepped down or was "fired" even before launching the N8 (but do not lose any sleep on that: his millions are safe and sound) In 2011 Stephen Elop took over and decided to sell the software business in which they had invested billions of euros to Microsoft for a fragment of that cost (Goes without saying)

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Analysis: what happened?

The most popular argument is that NOKIA failed to recognize Apple as a competitor. But it is not entirely true Nokia never had no much market in phones or smartphones In 2008, NOKIA achieved the 40% market dream, but the value of the share was down to the floor anyway. The real -but was well before the iphone Nokia was losing share already Instead of developing the new products they knew were going to be He future, they decided to focus jn China and India, because they wanted more market and more short-term profit. Well, NOKIA had 40% of the Market all right, and Apple had only 10%, but Apple had 80% of the profits!

Here are the questions we should ask after thinking about this
When did NOKIA decline begin? What were the problems it faced? How effective was it in recognizing and reacting to those problems? Had it made provisions for changes to the marketplace? Could it have known?

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