Why Did NOKIA Fail? Role Of MICROSOFT || Complete Analysis.

WHY DID NOKIA FAIL???

Hey! How have you been? Now I will request you to think a little bit... I want to ask you which cell phone brand did you have in the years from 2000 to 2005? Many of you must have the answer, 'NOKIA'. In fact in those years maybe a one or two from hundred would have a phone of any other brand than Nokia. But if I ask again that which Phone brand do you have now... Surprisingly, now the answer varies... The answers may be Samsung, Apple, Xiaomi, etc... What caused this variation?? What made the situation now that a one or two-person from hundred is holding a Nokia phone... Let's find out...

A BRIEF LOOK INTO NOKIA...

Nokia was founded on 12th of May in the year of 1865 in Finland headquartered at Espoo, Finland... In 2018, Nokia has approximately 1,03,000 employees across 100 countries. It has business in more than 130 countries and reported annual revenue of around €23 billion. Nokia is a public limited company listed on the Helsinki Stock Exchange and New York Stock Exchange. The founders of Nokia are Fredrik Idestam, Leo Mechelin, Eduard Polón. Rajeev Suri is the President and the CEO of the company. It is shocking that it was founded as a pulp mill and was associated with rubber and cables... Since 1990, it has focused on large scale telecommunication infrastructures, technology development and licensing. It was once the largest MNC of feature phones.

GROWTH OF NOKIA

Nokia firstly acquired a company named 'Mobira'... With the help of this company, Nokia produced its first telecom handset phones... In 1982 Nokia launched the first car phone named Nokia Mobira Senator which was of 10 kilos! In 1984 Nokia launched the first transportable phone named Nokia Mobira Talkman which was of 5 kilos! In 1987 Nokia launched Nokia Mobira CityMan which was of 800 grams and could be transported easily by hand... In 1991 Harri Holkeri, PM of Finland made the first GSM call by a Nokia Phone. In 1992 Nokia launched 1011 handset and gradually captured the world market. In 1994 Nokia launched the 2100 series handset which was the first feature phone... After the launching of this phone, the sales of Nokia skyrocketed. They expected to sell 4,00,000 phones but they sold 2 crores phones. After that Nokia crossed Motorola and became the world's largest mobile handset company... Whenever the top-selling 50 handset phone's ranking was published, the top 20 phones were always occupied by Nokia. In 2003 to 2005 Nokia 1100 and Nokia 1110 was launched... And its sales were phenomenal. It captured 70% of the market share in India...

DOWNFALL  OF NOKIA.

  Nokia was becoming bulky which made it difficult to lean... After this period a burst of mobile companies occurred. Many mobile companies including Samsung, Zen, Gionee, Vivo, Oppo, Xiaomi, Intex, Carbon, Lava made their occurrences... Also in America and Europe, Google and Apple were born... The sales of Nokia declined in Europe and America but was still larger in Asian countries... After some time Samsung launched 50 flip phones models and Motorola launched 40 flip phones models in India and China... A customer always tries to find something new... The sales of the flip phones increased. Nokia's sales began to decline in Europe and America because of Google and Apple and it also declined in India and China because of Motorola and Samsung. And Nokia, as it had become bulky, could neither make a quick change.. China also started mass production of mobiles... Due to this Nokia suffered a huge decline in his sales... Always Remember, ' every competitive advantage has a limited time'. Nokia's legacy of feature phones was destroyed by small emerging companies. China became a major hub of mobile production... Chinese mobile companies started capturing the Asian market... Nokia didn't understand that with the birth of Google and Apple, the market had shifted from hardware to software... But Nokia stuck to its old technology and hardware... In 2010 Apple and Google began to make their ecosystem... Apple had acquired 3 lakh Apps and Google had acquired 1.25 lakh Apps till 2010... But Nokia didn't try to make its ecosystem... They stuck to their Symbian OS... Symbian was based on old technology. As a result, Nokia had less than 20000 apps until 2010... In September 2010 Nokia changed their CEO from Olli Pekka Kallasvuo to Stephen Elop... Stephen Elop said that the time had come to change... Stephen Elop's suggestion was superb but they again made a mistake... A shop doesn't run in a desert, it runs in a crowded market... Nokia thought if they took Android then they will also join the herd... They decided not to take Android but they took Microsoft as their Operating system... But Microsoft is not compatible with mobile apps... Microsoft is outstanding for laptops and PCs but not for Mobile phones... On the other hand, Google and Apple expanded its ecosystem... More apps were made on Apple or Google... Apple and Google made their ecosystem in a saturated market... Now a question may arise in your mind that What is ecosystem?? Ecosystem means they made a community within their company. For example in Mobile companies, the owner, developer and manufacturer, all three of them together entered into Google... So Google made a community among itself... Google expanded its ecosystem... With the help of these three, Google made its hardware, software, developer, e-commerce, application, advertising, search, location-based search, unified communications, social application... This as a whole is called an ecosystem... Like this only Apple also made I cloud, Apple music, Airdrop, Handoff, Find Friends, Universal Clipboard, Auto Unlock...  After that Apple launched its products which became famous. They are iPhone, iPad, MacBook, Apple Watch, Apple TV, Mac os X, Safari, Mac PC, iWear, iPlay... These all are interconnected and interdependent... Google made an open ecosystem and Apple made a closed ecosystem... But Nokia made neither of them... They launched Nokia Lumia which lasted for a short time but again failed...

ROLE OF STEPHEN ELOP...

Stephen Elop was the CEO of Nokia at that time.  He was a leader with favourable skills but unfavourable will... He was highly competent but with a low character... Before joining Nokia he was the internal business head of Microsoft... He was often criticised as the main reason for the failure of Nokia... Elop was a Trojan horse... He knew that Nokia should go into Android... Nokia also had another operating system known as Meego which was very powerful... It was just outstanding... Elop also knew this but he removed Meego as their operating system.. Elop wanted to be the next CEO of Microsoft after Steve Ballmer... He wanted to merge Nokia into Microsoft and eventually become the next CEO of Microsoft... Nokia was a global giant... If Nokia had entered into Android then we would forget the name of other mobile companies... There was a time in which the definition of mobile was Nokia... If Nokia had entered into Android then no company would have been able to beat it. But Elop always tried to merge the company into Microsoft... Even Forbes said that "He was the wrong person for the job." And his plan became successful... Microsoft bought Nokia for $7 Billion but the wholesome market value of Nokia at that time was $50 Billion!!!

Elop not only merged Nokia into Microsoft but also merged it in a cheap cost... After Nokia merged into Microsoft, they produced feature phones of Rs3499 in India but other companies like Huawei and Xiaomi launched smartphones of Rs4200 and Rs4999 so the feature phone again failed... 

ENTRY OF SATYA NADELLA; MICROSOFT

It's ok to be the last mover but at least be a fast mover. This method is followed by a large number of companies in India... Jio was the last mover but with its fast-growing technique, it overthrew Airtel, Vodafone, Idea. Patanjali was a last mover but they overthrew Baidyanath, Himalaya. But in contrast, Microsoft was indeed one of the last movers but unfortunately, it was very slow. Nokia itself died but the reputation of Microsoft also fell... It was a major mistake of Microsoft to buy Nokia... But Elop's plan failed... Satya Nadella became the CEO of Microsoft... He removed Ballmer's plans and sold Nokia into the hands of HMD GLOBAL... Satya Nadella himself said, "I voted No for Nokia. I didn't understand why the world needed the third ecosystem of phones unless we change the rules... But it was too late to regain the ground. We had lost... We were chasing our competitors and their tail lights". He sold Nokia and started focussing on their core business... And now Microsoft is again one of the reputed companies in the world.

BOUNCE BACK OF NOKIA

Some of the best employees of Nokia again formed a company named HMD GLOBAL... With the help of Satya Nadella, they bought back Nokia and bought its selling rights... Firstly Nokia was arrogant... As in 2000 to 2005 Nokia's phones were sold automatically. It gave a very less margin to distributors and retailers... But with the coming of HMD GLOBAL, it gave a good margin to distributors and retailers... Nokia acquired Android, so it rectified its mistakes. HMD GLOBAL has made the company of a trio... It's sales, marketing and branding are done by HMD GLOBAL, the brand name is Nokia and the manufacturing of Nokia phones are done by  Foxconn. They are now trying to make their own ecosystem and to learn from their previous mistakes... They are now in a fly light mode... They don't want to take any risk... They are now entering into a Maximum Opportunity Market which means they are now producing phones which could fit into the budget of a common man i.e. ₹9000-₹15000... With the coming of HMD GLOBAL in Nokia, its progress is just amazing... It sold  21 million phones in Q3 of 2017 as per IDC report. In the last 6 months, it made 400 distributor and 80000 retailers... It launched  6 smartphones and 5 feature phones... For so much outstanding growth it would take approximately 5 years for a normal company... But Nokia did it in just 1 year... It also made After-Sale Service centre in 300 cities... Ajay Mehta, VP of Nokia India said," Nokia's legacy, reliability, loyalty, trustworthiness, quality is back to the market". 

Conclusion.

I hope you enjoyed this case study... This case study gives us a lot of lessons in our life... As you can see after Nokia reached its peak height it made a series of mistakes... But after HMD GLOBAL took its authority it made remarkable progress... It understood and recognised it's mistaken, but not only in recognised the mistakes but also learnt from it. It rectified it and again it is progressing...

We also should learn from our mistakes and learn how we can not repeat that mistake...

In the end, I would just like to say, "Enjoy Reading".

                                                                  

-Dibyaansh Pradhan