Why NOKIA Fail In A Market
When we heard about the early mobile phones, Nokia was the first brand to enter the market and become World’s Best Selling Mobile Phone. Nokia stayed on the market for ten years, launching new models of mobile phones from time to time. It serves all sectors of society by providing mobile phones in different price ranges. Millennials can identify with me more. Nokia, which has a glorious history, is hard to see that it is no longer important in the wireless industry. But why did Nokia fail?
This is a question that needs to be studied. In this article, we will study the factors that have led to such drastic changes in the mobile phone industry. It should be noted here that this is not everything that Nokia did wrong; other companies in the industry, especially Samsung, did it right in some ways. Therefore, Nokia’s failure is a mixture of Nokia’s failure and successful strategies adopted by other brands in the industry.
Before we begin to discuss the factors that led to Nokia’s failure. It is very important to treat Nokia as a success story that how it become World’s Best Selling Mobile Phone. Therefore, let us quickly understand the company’s success and the reasons for Nokia’s success. Nokia became one of the successful mobile phone manufacturers in the early stages of its success.
In October 1998, Nokia became the world’s best-selling mobile phone brand. In 2007, it had 50% of the cellular market share. The company’s young and dynamic management was the reason why it was widely accepted in the consumer market. The reasons for the initial success include new technologies, digitization and innovation drivers. However, over time, rapid growth, loss of agility, and lack of innovation leadership led Nokia to fail at a strategic level.
In 2013, the market share of the same Nokia company fell from 50% to less than 5% of the total market. That was a time when company management, shareholders and customers were worried about Nokia’s bankruptcy. Bankruptcy is almost certain, but Microsoft’s intervention in the market puts the company in a better position. Microsoft did this to save the Windows platform on smartphones, but it actually gave the company a new life.
In addition to redesigning the company’s smartphones, business diversification had also begun. Now Nokia provides network infrastructure as an important part of the entire business. In order to highlight the factors that caused the company to get into trouble, extensive research was conducted on the Nokia case study. Business graduates and even interns give examples of what the company did wrong to teach students and trainees the right way.
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Why did Nokia fail? -What did it do wrong or what did its competitors do right?
A deeper understanding of the factors that led to the collapse of one of the greatest smartphone developers of the 1990s.
Nokia didn’t adapt to the changes:
The mobile phone industry had made rapid technological progress. Traditional mobile phones had become smartphones, but Nokia had not changed it. Although it was the initiator of early smart phones. The Symbian smartphones were launched in 2002, but the company was unable to keep up with the pace of technological change. This is why Nokia failed.
It continued to produce old versions of mobile phones, and the competition began to cast complex smartphones. These smart phones became affordable for users, and eventually the entire social worship was transferred to them. Even so, Nokia did not know what had happened and did not change its strategy. Over time, the entire target market had shifted to newer and better mobile phone versions, leaving Nokia far behind new entrants.
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High reliability to become a pioneer in the industry:
Symbian launched in 2002 was a good move. Nokia became a pioneer in this industry. However, the introduction of the iPhone in 2007 undermined the creative advantage that Nokia enjoyed. The efficient speed of the iPhone showed how the smartphone industry would work, with the industry standard changing from a slow service provider to an efficient service provider.
Fierce industry competition:
As many companies provided services to the same target market, the wireless industry was gradually saturated. Apple, Samsung, BlackBerry and Nokia were all leading suppliers targeting their target markets. In this competition, Nokia did not improve its services and lost to other players in the market.
In addition to this high-end competition, low-end competition represented by Huawei, HTC, and ZTE had also emerged in the industry. These companies had gradually gained a considerable share, especially when the market shares of these companies were added together; as a competitor of Nokia, this was a good number. However, Nokia did not solve it in time and had to lose the low-end market, which also explained the reason for Nokia’s failure in the market.
Lack of strategic plans:
Apple and Samsung both had excellent game plans that Nokia could not get. Apple and Samsung developed a flagship product. These companies released new versions of these products with additional features every year. Customers and potential customers of these brands paid close attention to the new product before it actually hit the market. This expectation of launching new products with new features increased consumer interest in the product, and this is exactly what happened. Although the smartphone market was indeed saturated, the release of new versions of mobile phones was still causing a sensation among the public. But as far as Nokia was concerned, such a scene had not been created, which led to Nokia’s bankruptcy.
Excessive growth in the 1996-2000 era:
This success can be seen as the main reason for Nokia’s failure. Between 1996 and 2000, the company’s mobile phone adoption rate in the market increased, which made it difficult for the company to maintain the integrity of its supply chain. With such a high growth rate, all the company’s resources were used to maintain the integrity of the supply chain.
Lack of innovation:
Over time, this excessive growth had led management to choose between innovation and growth funding. Because of this, the company’s innovation or R&D department had almost no resources, so the company could not cope with the launch of the latest smartphones. Generally, in the penetration stage, the characteristics of a mobile phone were roughly the same as those of a mobile phone, with the exception of mobile phones designed for business communications. This is the main reason why competition from other brands had not been resolved.
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