Nokia 

is the first brand that was in the market when we heard of the early mobile
phones. For a decade, Nokia remained in the market and introduced new models of
the phone every now and then. It catered all segments of society by providing the
phone with different price ranges. Millennial would be able to relate with me
better. With a glorifying history of the company, it gets hard to realize that Nokia
is no more relevant in the mobile phone industry. But why Nokia failed?
This is a question that needs exploration, and we are going to explore the factors
responsible for this drastic change in the mobile phone industry in this article. One
thing to note here is that it is not about everything that Nokia did wrong; there
were certain things that other companies in the industry, especially Samsung did
right. Thus, the failure of Nokia is a mixture of the mistakes made by Nokia and
the successful strategies that the other brands in the industry used.

SUCCESS OF NOKIA:
Before we start the discussion on the factors that have resulted in the failure of
Nokia. It is vital to discuss Nokia as a success story. So, let’s give a quick look at
the success of the company and what made Nokia successful.

Nokia emerged as one of the successful manufacturers of mobile phone in the early
days of its success. In October 1998, Nokia was the best-selling mobile phone
brand in the world. By 2007, it had 50% of the share from the mobile phone
market. The young and energetic leadership of the company was the reason for its
wide acceptance in the consumer market. Initially, the new technology, urge to
digitalize and innovation were also amongst some of the reasons for success.
However, over time, the excessive growth rate, loss of agility, and the lack of
innovative leadership resulted in the failure of Nokia as the company on the
strategic level.

FAILURE OF NOKIA (NOKIA FAILED):

In the year 2013, the same Nokia Company that was enjoying a 50% share in the
market dropped to less than 5% share of the total market. This was the time when
the management, shareholders, and the customers of the company feared Nokia’s
bankruptcy. The bankruptcy was nearly certain, but the intervention of Microsoft
in the market helped the company in getting back to a better position. This was
done by Microsoft in order to save the Windows platform on the smartphone, but
in reality, it gave a new life to the company.

Apart from revamping the smartphones of the company, it also started

diversification of the business. Now, Nokia supplies network infrastructure as a
significant part of the overall business. In order to highlight the factors that
resulted in the plight of the company have been widely studied in Nokia’s case
study. Business graduates and even the practical trainees give examples of the
things that the company did wrong to teach the students and trainees of how to do
the right things.

WHY DID NOKIA FAIL? – WHAT DID IT DO WRONG OR ITS

COMPETITORS DID RIGHT?
Let’s get a deeper overview of the factors that have a role in the collapse of one of
the largest smartphone developers of 1990s.

1. NOKIA DID NOT ADAPT TO CHANGE:

The technological advancement in the mobile phone industry was rapid. The
traditional phones changed to smartphones, but Nokia did not change accordingly.
Although, it was the initiator of the early smartphones. Symbian smartphones were
introduced in the year 2002, but the company could not manage with the pace of
the changing technology. That is why Nokia failed.

It kept on producing the old version of the phone, whereas the competitors started
to pour in the highly advanced smartphones. These smartphones got affordable for
the users, and ultimately, the entire cult of society shifted to them. Even then,
Nokia did not realize what was going on and did not transform its strategies. Thus,
over time, with the shifting of all its target market to a newer and better version of
the phone took place, leaving Nokia far behind the new entrants of the market.
2. EXCESSIVE RELIANCE ON BEING A FIRST MOVER IN THE
INDUSTRY:
The introduction of Symbian in 2002 was a good move. Nokia became the first
mover in the industry. However, the introduction of iPhone in 2007 actually
spoiled the creative advantage that Nokia was enjoying. The efficient speed of the
iPhone showed how the smartphone industry is going to work, and the standards of
the industry changed from being a slow service provider to the efficient service
provider.

3. HIGH COMPETITION IN THE INDUSTRY:

Gradually, the mobile phone industry became saturated with a lot of companies
serving the same target market. Apple, Samsung, Blackberry, and Nokia all were
the leading players striving for the target market. In this race of competition, Nokia
did not improve its service and lost to the other players available in the market.

Apart from this high-end competition, in the industry, the low-end competition in
the form of Huawei, HTC, and ZTE also emerged. Gradually, these companies
gained significant share, especially when the market share of these company was
summed up; it was a big number as a competitor for Nokia. But Nokia did not look
into it timely and had to lose the lower end market as well, showing why did Nokia
fail in market.

4. PERCEPTION IN THE CONSUMERS:

The name Nokia had a great brand reputation when it comes to mobile phones. As
discussed in the start, most of us knew Nokia as one of the greatest mobile
manufacturing company. We still do recognize Nokia, but we are unable to change
our perception about it and the products it manufactured. All of us have set Nokia
as a great brand that was available at a particular time or age. People would
remember the landmark snake game, they would wonder if they could really play
with it, but they won’t spend any money on buying the phone, especially for that
game. Even if they do get access to Snake, they will get bored of it in no time. This
is because of technological change and the perception of the entire market about
the brand. Nokia did not consider this factor and had to face failure.

5. LACK OF REPOSITIONING:
Considering the previous image of Nokia, it was essential that a timely decision
about repositioning was to be taken. For those of you know who aren’t aware of
repositioning, we are discussing it here for you. Repositioning is a term related to
marketing in which the existing image of the brand or a company is changed to the
newer image by highlighting the new features or the newness that the company is
bringing in for the customers. Nokia did not focus its smartphone market much.
Most of the people would still not be aware of Symbian. Similarly, the first
manufacturer of smartphones for more of the audience would be Apple. This is
where Nokia went wrong and shows why did Nokia fail.

6. LACK OF A STRATEGIC PLAN:

Both Apple and Samsung got the hold of the excellent game plan, which Nokia
could not manage to get. Apple and Samsung have created a flagship product.
These companies release a new version of these products every year with
additional features. The customers of these brands and the potential customers
keep an eye on the new release along before it is actually in the market. This
anticipation about the new product being launched with new features can enhance
the interest of the consumers in the product, and this is what is happening. Even
when the market of smartphones has actually become saturated, the release of a
new version of the phone still gets public excitement. But in the case of Nokia,
such a scenario wasn’t created, and this actually led Nokia to collapse.