For a long time, the name Nokia more than any other name has been synonymous with the cell phone industry. This does not come as a surprise as the company is the largest seller of handsets, finishing the race ahead of other mobile phone manufacturers such as Motorola, Alcatel and Samsung. The company has a heritage to envy and is by far a global brand with its products and services available in most, if not all corners of the world. It started its operations about one hundred and forty five years ago, although, it had not ventured into the cell phone manufacturing industry, at the time. Its breakthrough in the industry would come in the 1990s, when it announced its arrival in style and gradually became a force to reckon with in the competitive communications industry. By the turn of the century, the Nokia Company had taken over and was sitting at the helm of the production and sale of mobile phones, in the process, raking in billions. However, as time progressed, the success that was once associated with the company faded. In the past few years, the company has been grappling with the effort to remain relevant, let alone maintain its previous success. This essay analyzes the company, highlighting the problem facing the company and the strategies and measures put in place by its leadership to realize success once again.
“Change is uncomfortable but is the only constant thing in life”. This saying adequately and candidly highlights the bedeviling situation that the Nokia Company is a victim. For the Finland based company, the revolution in the communications industry has been the hallmark of its dwindling influence on a market it once ruled with little competition. Over the last few years, introduction of android, smart phones and the iPhone has been a revelation in the mobile phone industry and consumers have taken to this revolution like a duck to water. This started woes befalling Nokia stems from. For a long time now, Nokia has been in the frontline in manufacturing hardware (handsets and related parts). This has broought the great success of the company in the infant stages of the century. So when and how did Nokia’s troubles begin? Times changed, and a new generation of consumers more concerned with software (applications in the handsets) than hardware was unveiled. The consumers no longer prioritized the phone. Rather, they were more concerned and interested in what the phone could do, how fast it could perform and what it had to offer in terms of applications. Nokia did not live up to, let alone keep up with this expectation. That is when issues emerged in the company, which was once a formidable force, but gradually driven into the territories of extinction if nothing is done to turn the situation around sooner rather than later. Nokia’s lead in the mobile industry has been overturned, and the company is now a pale shadow of itself making success in the near future an elusive venture.
The woes bedeviling the Nokia Company are more or less self-inflicted. It is a fact that other former strong contenders for the mobile phone supremacy are well on their way of catching up if they have not done so already. Samsung and LG have been a revelation in the android and smart phone industry, putting up a good fight and thereby getting a reward with dominance and a voice in the largely competitive communications industry. While the leadership of the Nokia Company buried their heads in the sand, oblivious of the drastic changes that were taking place in the mobile phone industry: both among consumers and the producers, their competitors researched intensely, trying to find a way of appealing to their consumers with a new range of products and services. The sensitivity to the market demands would prove to be the difference between who stays on top and who suffers as the likes of Samsung emerged the victors and Nokia faced competition. Therefore, the problems affecting Nokia do not necessarily affect the cell phone industry in general. It is more of an internal affair and excludes the rest of the players in the industry.
To counter the revolution that was threatening to choke the company to extinction, a new chief executive officer took place, Stephen Elop. For the first time in its history, the Finland based company hired a chief executive officer who is not Finnish to spearhead and mastermind a blueprint in the road towards achieving success once again. As is expected, the new CEO adopted a different style of leadership. He began by seeking the opinion of the staff members on the elements that needed change, the good elements, and what had made the company lag behind. The response he got was impressive. Most employees felt that the indifference in decision-making and poor management and leadership were to blame for the company’s lackluster performance over the years. Stephen Elop embarked on a grand plan to restore the company back to glory. He made a speech in February 2011. In his speech, he acknowledged lack of foresight had cost them. His acknowledgement marked the beginning of drastic changes that were to follow. The company adopted a decentralized decision-making process, cutting links with the earlier mode in which decisions affecting the company at national and regional level were came from the headquarters. In the new system, the teams at the national and regional levels were responsible for making the decisions affecting their nations and areas of operation.
Apart from the overhaul in its leadership and organizational structure, a more significant change was to come in the form of a partnership with Microsoft. Having missed the revolution that had taken the mobile phone industry by storm, the new management was looking to make amends and re-establish the company at the summit and as a force to reckon with. The changes in the market demands to the more appealing and diverse smart phones almost instantaneously had taken the industry by a scruff of the neck and came as a surprise to Nokia. Buoyed by the realization that the company had been product-oriented more than customer- oriented had, the company undertook to make a turn-around. The partnership with Microsoft came about with the shedding of the Symbian system, a system that had over the years instrumentally thrust Nokia to the top. Demands had changed, and the old methods needed change. The new partnership would see off the beginning of a new era. The Nokia Company unveiled the new look phones that came with in- built applications, something that had been largely missing in previous productions and which had led to the decline in the success of the company. With these changes, the management hopes to witness a surge in the demand for their products and thereby offset a recovery, which is quite necessary.
The strategies put in place by the new leadership have a strong basis as the decision came after extensive research and consultation. Their relevance and importance in bringing the company back to winning ways is uncertain until results, and not just any results, but positive results for that matter, come. Nevertheless, they are well intentioned. The change in leadership, was immensely necessary, as the leadership present at the time the company’s fortunes and dominance was on a downward spiral could not be trusted with helping the company pick itself up. The decentralization of decision-making is another positive step too as the regional and national teams have a say in the decisions affecting their nations and regions without interference from and by the headquarters. This gives them a feeling of being in control and bestows responsibility upon them. This contributes significantly to their morale, which would lead to satisfactory if not above par performance. The inclusion of mobile applications in their products is a step in the right direction as they seek to build a more customer-oriented image of the company. With this in mind, the company should now proceed and invest in the future, through research and innovation. The communications industry is a constantly changing industry and the company has to keep up with this challenge by developing tomorrow’s equivalent of iPhone or smart phone.
In conclusion, the company needs to do everything within its power that is legally and morally acceptable to uphold its tradition of success and innovation if it has to remain relevant. It also needs to keep up with the competition to avoid override from competitor.