Reference no: EM133615007

Problem

The Changing Business Environment Plans

Nokia is a multinational communications and information company, founded in Finland in 1865. For 57 years, Nokia was primarily engaged in forestry-related products, including electricity generation. In 1922, it formed a partnership with the Finnish Cable Works and Finnish Rubber Works, and in 1967 the three companies merged to form the new Nokia Corporation-a conglomerate active in the rubber, forestry, cable, electricity and electronics industries. During the 1970s, Nokia became increasingly involved in the electronics industry and in the 1990s focused its operations on the communications business.

In the first decade of the 21st century, Nokia was a dominant force in the newly emerging mobile phone market and became a major contributor to the growth of the Finnish economy. By 2007, Nokia had become a world leader in the mobile phone industry, peaking with its 3310 model. Over the next seven years, however, sales fell away alarmingly despite a program of continuous innovation that extended battery life; in 2014 Microsoft acquired the company's mobile phone business. The effect in Finland was devastating. Thousands of employees lost their jobs, and unemployment escalated to over 14%. However, though devastated, the company lived on to fight another day.
What went wrong?

Nokia was not a technological laggard: it invested heavily in RD, developed a smartphone in 1996, and had built a prototype touch screen Internet-enabled phone by the end of the decade. The company was essentially a hardware operation that underestimated the importance of specially designed software that would run on smartphones. In contrast, Apple saw hardware and software as equally important. The senior management at Nokia failed to realize that smartphones would become dominant. At the time, Nokia was an established global brand that was achieving healthy profits from its mobile phone business. A late decision to develop its own smartphone operating system resulted in teething problems, so in 2011 Nokia embraced the Windows phone. However, the company's smartphones failed to live up to consumer expectations and the Nokia brand lost its appeal.

Answer the following questions:

A. What were the causes of change in the mobile phone industry?

B. Why did Nokia's senior management fail to spot to them?

C. How did the Nokia brand lose its consumer appeal?

D. Briefly research the demise of Blackberry. What parallels are there with the Nokia case?