Principle of management and science

ASSIGNMENT NO: 4

Submitted By: Muhammad Aqeel

Class ID: CU-161-2016

Section: A

Instructor: Engr. Muhammad Imran Khan

Department: Electrical Engineering

Signature

_________

CECOS UNIVERSITY OF SCIENCE AND INFORMATION

TECHNOLOGY HAYATABAD, PESHAWAR
A concise timeline of Nokia’s important moments:

 In October 1998, Nokia became the best-selling mobile phone brand in

the world;

 Nokia’s operating profit went from $1 billion in 1995 to almost $4 billion

by 1999;

 The best-selling mobile phone of all time, the Nokia 1100, was created in
2003;

 In 2007, Apple introduced the iPhone;

 By the end of 2007, half of all smartphones sold in the world were
Nokias, while Apple’s iPhone had a mere 5 per cent share of the global
market;

 In 2010 Nokia launched the “iPhone killer” but failed to match the
competition;

 The quality of Nokia’s high-end phones continues to decline;

 In just six years, the market value of Nokia declined by about 90%;

 Nokia’s decline accelerates by 2011 and is acquired by Microsoft in

2013.

Where Nokia Went Wrong

Nokia’s agreement on Tuesday to sell its handset business to Microsoft for

$7.2 billion is something of a minor business coup for Nokia, since a year from
now that business might well turn out to have been worth nothing. It also
demonstrates just how far and fast Nokia has fallen in recent years. Not that
long ago, it was the world’s dominant and pace-setting mobile-phone maker.
Today, it has just three per cent of the global smartphone market, and its
market cap is a fifth of what it was in 2007—even after rising more than thirty
per cent on Tuesday.

What happened to Nokia is no secret: Apple and Android crushed it. But the
reasons for that failure are a bit more mysterious. 

One way to explain this is to point out that Nokia was an engineering company
that needed more marketing savvy. But this isn’t quite right; in the early
aughts, 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. Nokia’s development process was long dominated by hardware
engineers; software experts were marginalized. Here there control process
became weakend. (Executives at Apple, in stark contrast, saw hardware and
software as equally important parts of a whole; they encouraged employees to
work in multidisciplinary teams to design products.)

How Nokia Bounced Back

Nokia’s mobile-phone downfall – from a 40 percent market share to near
bankruptcy in just a few years – has become a familiar cautionary parable on
the perils of industry disruption. Less well-known is the equally instructive
tale of how Nokia clawed its way back from the edge of destruction. Indeed,
since touching bottom in 2012, its market capitalisation, while not at the level
of its pre-smartphone heyday, has increased more than five-fold.

Nokia’s recovery was due to a wholesale strategic shift towards

telecommunications networks, culminating in the US$16.6 billion acquisition
of Alcatel-Lucent, a deal completed in 2016. Rarely has any large company
reinvented itself so quickly and radically. But before the strategic redirection
could be accomplished, the company needed to repair deep-seated cultural
problems. Nokia’s revamped board of directors (a new chairman was
appointed in 2012) proved integral to this effort. The emotion-regulating
processes used by Nokia’s board to counter internal dysfunction are the
subject of our recent article, which won the 2018 Best Paper Award of the
Academy of Management’s Strategizing Activities and Practices Interest
Group.

TECH GAINT GOT BACK

After finding early success in producing mobile phones, Nokia underestimated

how important a strong central operating system would become within their
devices, an oversight that left them vulnerable to disruption when the iPhone
launched. After Siilasmaa became Chair in 2012, the company set new
guidelines in place for rigorous scenario-planning exercises that would help it
better peer into the future. Since 2012, Nokia has reinvented itself yet again,
becoming one of the largest technology infrastructure companies and providing
end-to-end networks across the globe.