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What Actions (or Lack of Actions) Contributed to Nokia’s Fast Decline?

Autor:   •  March 3, 2019  •  Case Study  •  632 Words (3 Pages)  •  19 Views

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What actions (or lack of actions) contributed to Nokia’s fast decline?

Nokia was the leading innovator in the telecom industry. They handled the market demands well across the world in the 1990s and early 2000s with their effective supply chain. Their built a strong vertically integrated company with in-house manufacturing, design R&D and distribution. With the introduction of the GSM infrastructure in Europe in the late 1980s, which Nokia helped influence, they developed all their technology to support GSM. North America, in the early 1990s, started adopting a different network infrastructure, CDMA, which didn’t work on Nokia handsets.

Although Nokia was good at developing products for the European and Eastern markets, they were not quick to adopt to the market needs of the west. Their decision to not support the CDMA network resulted in a delayed entry into the largest market, North America. When they finally entered the market, they were only exposed to around half the market as they only provided GSM based phones and North America was split nearly evenly with their adoption of CDMA and GSM phones. Due to lack of experience in the CDMA market, when they finally started supporting the network to try to capture the other half of the market, the market was hard to enter as they didn’t have enough brand recognition due to their late entry.

In the mid-90s, Nokia was the leader in instilling the idea that phones can also be fashion accessories. They created elegant, sleek handsets with a minimalistic design. In 2004, however, the industry was shifting to flip phones. Motorola and Samsung were leading the flip-phone industry with over 106 phones, while Nokia only had 2 phones. Motorola RAZR was released as a mass market phone the same year with a key selling point of sleekness. Nokia was unable to react to this. They continued to design well designed phones, but they did not understand the evolving needs


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