Question

As per a published report…” In the late 1990s and early 2000s, Nokia was the global leader in mobile phones.

With the arrival of the Internet, other mobile companies started
understanding how data, not voice, was the future of communication. Nokia
didn’t grasp the concept of software and kept focusing on hardware because the
management feared to alienate current users if they changed too much.”

List and briefly explain 2 factors that might have been overlooked by the business(es), referred to in the case

Answer 1

Change is inevitable and innovation is no different. Companies that experience innovation gran everlasting success but refusing to evolve with market can be even more devastating. Without a robust and resilient innovation strategy, no company can survive, says Phil Mc kinney, CEO of cable labs.

Coming to the case study of Nokia, the following are some of the factors which led to the downfall of company's market:

• Higher competition, lack of strategy and innovation:

Introduction of iPhone spoiled the creative advantage of Nokia. Efficient speed has changed the standards of industry from being a low service provider to the efficient service provider, where Nokia lacked the proper strategy and proper adaption to innovation at right time.

• Perception of the consumers:

changing consumer preferences with introduction of high speed smart phones with all video and other features led to adaption of new technology and internet, and consumers probably got bored with the old models of Nokia

• Lack of proper vision:

​​​​​​​​​​​​​​company capitalized on a short term growth over two decades, ignoring wide-market ahead. This gave way for new companies and competitors to enter markets, who meet people's tastes. Lack of visionary leader, who can transform problems into right future is major drawback of Nokia.

• Changing of organizational structure:

​​​​​​​Nokia has been operating on mechanical structure, where it suddenly is, tough of shifting to matrix structure. Its decision of going to be technology adaptive, is not welcomed by stakeholders, resulting in loss of top management and this is also a definite reason

•   Fear of losing potential users:

​​​​​​​Nokia didn't want to lead a drastic change in user experience, which it felt like losing its potential users. This caused Nokia to develop a mess of operating systems with a bad user experience that just was nota fit in the market.

• over estimation of brand strength:

​​​​​​​over estimated strength of its brand believed they could arrive late and succeed in smart phone industry, where as Steve Job's iPhone was revolutionary at time and mindset of people has changed and Nokia couldn't meet them earlier. The products brought later, weren't competitive enough.

• conclusion:

​​​​​​​​​​​​​​maintenance of right organizational structure, Environmental analysis & competition, future driven vision and adaption to innovation are most contributors of success.