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Nature of Nokia'S Business: Source

Nokia was the world's largest manufacturer of mobile phones in over 130 countries. It was divided into four business groups: Mobile Phones, Multimedia, Enterprise Solutions, and Networks. However, Nokia underestimated the importance of software and apps, and the transition to smartphones. It also overestimated the strength of its brand and believed it could catch up even being late to smartphones. Ultimately, Nokia's failure resulted from reluctance to transition to the new era of smartphones and underestimating their importance.

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Elaine Villalobos
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71 views2 pages

Nature of Nokia'S Business: Source

Nokia was the world's largest manufacturer of mobile phones in over 130 countries. It was divided into four business groups: Mobile Phones, Multimedia, Enterprise Solutions, and Networks. However, Nokia underestimated the importance of software and apps, and the transition to smartphones. It also overestimated the strength of its brand and believed it could catch up even being late to smartphones. Ultimately, Nokia's failure resulted from reluctance to transition to the new era of smartphones and underestimating their importance.

Uploaded by

Elaine Villalobos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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VILLALOBOS, ELAINE A.

ANOBA, GIO NICHOLAS S.

NATURE OF NOKIA’S BUSINESS

Nokia Corporation is the world's largest manufacturer of mobile phones, serving customers in 130
countries. Nokia is divided into four business groups: Mobile Phones, Multimedia, Enterprise Solutions,
and Networks. The Mobile Phones group markets wireless voice and data products in consumer and
corporate markets. The Multimedia segment sells mobile gaming devices, home satellite systems, and
cable television set-top boxes. The Enterprise Solutions group develops wireless systems for use in the
corporate sector. Wireless switching and transmission equipment is sold through the company's
Networks division. Nokia operates 15 manufacturing facilities in nine countries and maintains research
and development facilities in 12 countries.
Source: https://www.referenceforbusiness.com/history2/35/Nokia-Corporation.html

PROBLEMS

 Nokia was an engineering company that needed more marketing savvy.


In the early years, Nokia was acclaimed for its marketing, and was seen as the company
that had best figured out how to turn mobile phones into fashion accessories. It’s more
accurate to say that Nokia was, at its heart, a hardware company rather than a software
company—that is, its engineers were expert at building physical devices, but not the
programs that make those devices work. In the end, the company profoundly
underestimated the importance of software, including the apps that run on smartphones,
to the experience of using a phone.

 It also underestimated how important the transition to smartphones would


be.

This was, in retrospect, a classic case of a company being enthralled (and, in a way,
imprisoned) by its past success. Nokia was, after all, earning more than fifty per cent of all
the profits in the mobile-phone industry in 2007, and most of those profits were not
coming from smartphones. Diverting a lot of resources into a high-end, low-volume
business (which is what the touch-screen smartphone business was in 2007) would have
looked risky. In that sense, Nokia’s failure resulted at least in part from an institutional
reluctance to transition into a new era.

 Nokia overestimated the strength of its brand, and believed that even if it
was late to the smartphone game it would be able to catch up quickly.

They believed that even if it was late to the smartphone game it would be able to catch
up quickly. Long after the iPhone’s release, in fact, Nokia continued to insist that its
superior hardware designs would win over users.
Source: https://www.newyorker.com/business/currency/where-nokia-went-wrong

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