The Internal Reasons for Nokia’s Failure Essay Example

in the digital era, strong brand power, and stationery marketing mode. Nevertheless, under the inevitable trend of mobile internet, it fades away in people’s vision, and fails again and again in launching star products which can meet the need of mobile internet service. Meanwhile, other competitors, such as Apple and HTC, clear and definite the strategic focus as design and innovation, and has successfully launched many star products and services.

The factors such as voice quality, the durability of battery, and resistance to knock which were put into emphasis by Nokia in the past seem no longer appeal to customers. Just as Steven Elop, CEO of Nokia, said in the internal memos, “the success of Apple illustrates that so long as the design is perfect; customer is willing to pay more for mobiles which can provide outstanding end-user experiences, and the developer will also designs new applicants with pleasure. They (Apple, HTC, and Android System) change the competition structure, and succeed to occupy the high-end market. Nowadays, traditional advantages such as scale, brand, distribution channel etc, are on longer the decisive strength of competition. The product’s design and development which fulfill customers’ need can gain the larger share of the market ultimately. In the current, Nokia still is the biggest mobile phone company in the world, and own a huge innovation team. But the innovation system like this which only focuses on meeting needs, not on crating needs will lead Nokia Dynasty to the end.

The urgent need of Nokia is not the “meet” or “discover”, but a revolutionary create which can help to realize customer value proposition. And this is the key

of business model innovation. Failure of Nokia The Condition of Nokia In accordance with the report published by Strategy Analytics, the market research firm, and IDC, in the past year, Apple and Samsung ended Nokia’s leading position in the sales volume of smart phones which last 15 years. In this year, Nokia drop two, the position now row third.

Since the first launch of Communicator Smart Phone in 1996, Nokia has been the leader of the market. However, in the last year, with the pace of sales keeping fall and the pressure from strong competitors, Nokia lost out in two positions inexorably. From April to June in last year, Apple sold a total of 20,300,000 Iphone. And according to the prediction of analyst, because of the strong demand for Google Android platform smart phones in the market, Samsung’s smart phones sold in the second quarter in last year counted up to 19,000,000, far surpassed the sales of 16,700,000 of Nokia.

Meanwhile, Nokia not only face the competition from Apple and Google in the high-end market in Europe, but also being challenged by low-end manufactures in the emerging market of Asia. In New Delhi, in Shanghai, or in Johannes burg, cheap cell phones from China and India are threatening the predominant position of Nokia in the emerging market. What making this Finnish Giant’s condition worse is that Asian manufactures are all turning to the free Android platform, which is very popular in operators and consumers.

The competition in the cheap mobile phone market will become more and more serious, the advantages of Nokia in the field is wildly known brand and extensive distribution

channel. But manufactures, such as ZTE and Huawei, which focused on network devices businesses in the past, also actively develop mobile terminal business. Though the sales volume of the smart phone of Nokia still rank first in the world, Apple, Samsung, HTC and RIM are keeping eroding its’ market share. The Definition of Enterprise Inertia

The enterprise will has its own experiences of success, forming a kind of particular value orientation, mode of development, process of business, method of management etc, after successfully capturing majority of market share and becoming the leading one of its industry. And all of this will be maintained and developed by enterprise’s leaders in every generation. Meanwhile, bigger the scale of enterprise is, stronger the power of inertia is. Coming into a conclusion, the above mentioned is enterprise inertia, which make enterprises naturally depend on past successful path.

In the time of gigantic changes, enterprise inertia has become kind of secret killer. Globally fiercer competition, higher consumption, upgrading industries, market segmentation, diversification of consumption, generate frequent alternation of aims of competition which is developing into diversification with clearer uncertainty of variation tendency. All around the world, it is harder to manage a longevial company, on matter in western or eastern countries. During the past several years, neither one of the US Fortune top 500 companies can keep the No. position over 3 years. Similarly, greater change happened in china inland enterprise top 1000 ranking list. Enterprises and even one industry’s lifecycle are shortening which demonstrate less impossibility of built to last. Facing the shift of environment, enterprise inertia has peremptorily become secret killer of enterprises which stick to

old rules and practice, moving toward to decline, and is represented by Nokia and Kodak. Nokia’s Enterprise Inertia In 1992, Nokia launched the first GSM phone—1011.

During the rudimentary period of mobile phone development, Nokia’s products pervaded seven continents because of increasing market opportunities and low consumer maturity. In the meanwhile, Nokia also formed its competitive edge in the market included good quality of product and communication, well-developed distribution channel system, various product line which cover all price stages and perfect after-sale system. However, the tables may have turned. The dynamic change of environment will erode enterprises’ primary core competence.

While the mobile phone market step into the smart phone era, mobile phone software operating system is being attached more importance. In 2007, the development of Iphone has leaded a new trend of mobile industry. But Nokia puzzled by its immediate excellent sales performance without noticing a crisis brought about by Apple. Nokia’s enterprise inertia makes it lag in response to new situation. Being Proud of its product quality, insisting the hardware is the top priority together form its’ product design-oriented corporate culture and organization structure.

Though realizing the importance of software, it in really hard for Nokia rapidly adapts to turn of the market. Enterprise inertia results in present situation that Nokia stand still and refuse to make progress in the field of smart phone. In reality, the idea of smart phone is proposed by Nokia earlier 3 years than Apple. Similarly, Nokia also developed touch technology earlier 3 years than Apple, while its Ovi launched 1year earlier than AppStore. However, Nokia lost market opportunities due to its blind arrogance.