(m u l on opening tune ca Nokia)

Have you ever heard this sound before? Is it familiar? We bet Yes. This
sounds reminds me of my very first impression of a mobile phone over 10
years ago when my mother bought her first phone. Hers was a Nokia.
And so was my fathers, my sisters, mine, my cousins, maybe yours, maybe
the worlds.
But now, if you happen to ask anyone: Are you holding a Nokia in your
pocket? the answer would probably be No (or even What is a Nokia?) Why
did the biggest mobile phones maker in the world lose its affection, and
finally came to the shadow of Microsoft in 2014? With this presentation, we
hope to help you understand about the case of the Faded Signal of Nokia in
the perspectives of strategic management. Now lets begin.
Nokia, initially established as a paper mill in 1865, was operated in many
other markets such as electronic, rubber, and cable before it was known as a
phone manufacturer as today. The company dramatically developed as
mobile phone usage skyrocketed, and it was the most popular choice in the
years of 2000s, especially with the establishment of N series in 2005. On the
peak of its popularity, Nokia dismissed the threat of iPhones with its touch
screen and services. Mistakes followed by mistakes, Nokia lost its market
share and it was too late for Nokias executives to realize. Though the
company did put great effort to revitalize its business, the situations got
hardly any brighter.
Q1: So what exactly are those strategic mistakes that Nokia made in
the US market?
First of all, Nokias biggest mistake was that it did not realize the changes in
American consumer taste and the emerging trend of smartphones. Nokia
thought that it knew what the customers wanted better than the customers
themselves. Ignoring the iPhone hype, Nokia neglected the growing
fondness for apps and touch screens, believing that its one-size-fits-all
products were superior.
Nokias second mistake is its ignorant attitude to competitors. Despite the
entrance of many new manufacturers into the market, Nokia did nothing
about it: no change, no innovation, no new products. In 2008, when new
manufacturers like Samsung or HTC already found roots to extend their
market share with touchscreen mobiles, Nokia felt that touch wouldnt have
a scope in the near future and did not follow the common route
Last but not least, it was the difference in technologies used by cellphones
that made the fruitful business turn sour. While roughly half of American

cellphone users used the CDMA format, the models of Nokia was still based
on a European communications standard called GSM. Nokia has adapted too
slowly to this US technology.
The three mistakes that we have just identified above all point to one thing:
inaccurate external analysis 1 in 6 crucial steps of the strategic
management process (thm hnh 6 steps vo y th chc l ok ). Nokias
underestimation of external threats has falsely led the company to formulate
and implement inappropriate strategies. During this formulating company
did not effectively employ all 3 organizational strategies, which are
corporate, competitive and functional strategy. They stubbornly followed a
stability corporate strategy and did not carry out any prominent competitive
strategy. This had countered Nokias first-mover advantage and other
valuable opportunities, so failure was inevitable.

Q2: Up to this point, we believe that many of you can help thinking:
Why do smart companies like Nokia make such dumb mistakes?
To begin with, one reasonable explanation for these mistakes is that giant
companies tend to be the victim of their own success, because they are very
likely to overlook potential threats and only react when it is already too late.
Nokia was no exception. Indeed, in 2002, Nokia led the American market with
35% of mobile phone market share. With such a high growth rate and high
market share, Nokias leading mobile phone business can be identified as
Stars using the BCG Matrix. The most important strategic implication of
this tool is that the Star requires heavy funding to exploit the market
growth and maintain high market share. As for Nokia, due to lack of
innovation, the advantages brought by the Star quickly deteriorated after
the introduction of the iPhone in 2007. Nokia had chosen to ignore this by
saying that they were unimpressed by its engineering and still refused to
change 3 years later, which obviously was not so smart.
In addition, mistakes also resulted from their inability to adapt to changes.
Innovation is the center of American business, thus firms who stand still will
quickly lose their competitive edge. In this case, Nokia did not anticipate
changes in American consumer tastes and hence no alteration was made. In
industries where technology and consumer taste changes day by day,
stopping to innovate and adapt can be seen as a suicidal action.

Q3: So, as you have seen, these strategic mistakes had pushed
Nokia to the verge of bankruptcy, which is why they must carry out
necessary changes if they want to survive. This brings us to our 3rd

question: What strategies is Nokia using to revitalize its North

America business?
First of all, Nokia implemented a customer-oriented strategy, which involved
securing partnership with American giants such as AT&T, Qualcomm and
Microsoft to adapt their model; and setting up liaison offices expanding to
different markets where top business operators have units such as Atlanta,
Settle, New Jersey, and Dallas. Also, it had tried to revamp the operations in
the American market to coincide with the major operators in each of these
cities. To diversify their products to match that of the current demand, Nokia
has also partnered up with Microsoft for a windows design mobile software
applications for phones that already have the original Nokia European
communication software. These steps will help Nokia maintain a footing in
the industry, but it is not enough to make it a big competitor for giants Apple
and Samsung.
On one hand, this could be viewed as a growth strategy. Take this statement
from the case, Everything you see us doing is to build the broad set of
capabilities to take us broader and deeper into the U.S. market. On the
other hand, in light of their resent failures, what they are doing could be
viewed as a turnaround strategy to create a balance for Nokia to stay tuned
in the market.

Q4-1 In spite of these efforts, many critics still remained skeptical.

Not only had Nokia made a fatal mistake from the beginning, but its
reviving performance was also not impressive. So how could Nokia
have done better at using strategic management?
In order to understand how Nokia could have improved it strategic management,
lets first do a SWOT analysis on this Corporate: (which is step 2 and 3 in the
strategic management process)
An Internal analysis gives us an insight into the companys strengths
and weaknesses.
- While Nokias strengths are:
+ Advanced technology over competitors in the mobile industry
+ Market leadership in the mobile industry
+ Strong brand name and company image in the global market and
+ Product innovation,
- Its Weaknesses are
+ Arrogance attitude and the one-size-fits-all mentality, and
+ Inadequate focus on customers and their interests in customization
Now lets turn to an External analysis.
- Nokia did have many great opportunities in the US market, including an
initially strong leading position in the market. It also had chances to

cooperate with other industries and company in the U.S so as to get deeper
into the U.S market, which allows better analysis and better groundwork for
long-term success.
- However, Nokia could have thrived and prospered if they had suppressed
their ignorant and arrogant attitude and instead taken the threats from the
external environment into account. These threats are:
+ New strong competitors and loss of market share
+ Dramatic change in consumer tastes towards the cool touch
phones
Had Nokia been able to carry out more precise analyses, they could have done a
much better job at formulating suitable strategies (step 4). All 3 types of
organizational strategies should have been effectively combined. The right
corporate strategy should be growth instead of stability, and more attention should
be paid into building competitive strategy and honing competitive advantages.
Furthermore, Nokia should also find methods to implement the customers focus
strategy, to research and build customized plan for individual users and to make
adaption to the changing world, behave a little nicer I mean.
Q4-2 So, to wrap everything up, what does this case story tell us about
strategic management?
The lessons learnt from the case are crystal clear: Firstly, strategic management has
proven its importance in any business development plan. If a company wants to
success and remain on top, it should best to revise and follow the 6 step in strategic
management regularly. Secondly, it is crucial to pay attention to both internal and
external environment, also to some of your strongest competitors. Or else you will
never know when these competitors make moves and grow stronger. Once your
company fails this, regardless of the size and fame, the way from being on top to
bottom is sure be shorter.
So that is pretty much everything we want to share about this case. We hope that
after this video, you gained some more knowledge about strategic management,
like what it is and how important it is in the success or failure of a company, and
how we apply it in reality. Thank you for listening~