“We are standing on a burning platform.” noted Stephen Elop in a speech to the company staff in 2011, shortly after being appointed as a chief executive officer of Nokia (The Guardian, 2011). The company, founded in 1865, was losing its ‘platform’ in the telephone market after holding the position of a world leader for over a decade.
Nokia started off as a paper mill on the banks of the Nokiavirta river, after which it took name. The company gradually evolved into a conglomerate operating in many industries. Widening the production of paper for cables and tyres manufacture, it added an electronics department which allowed Nokia to enter the telecommunications market (Nokia, 2015). After a deregulatory move towards a single mobile system standard, Nokia decided to focus on the mobile phone market. A first phone call made on the first generation wireless system (1G) was made in 1991. The new technology first gained popularity in the sparsely populated Scandinavian countries (Boddy, 2014) and Nokia continued to overtake Motorola as the largest producer of mobile phones. The company, at its peak, “generated revenues bigger than Finland’s state budget” (Cereal, 2015) and represented a fifth of the corporate income tax collected in Finland. Over the course of years, Nokia strategically positioned itself to become the dominant player, controlling a 40 per cent share of the market.
According to Porter (1979), companies introduce strategy to deal with arising competitors trying to enter the market. Porter forms a concept of forces that shape the industry’s marketplace. A company can build defences to protect its position on the market if it navigates these causes of change.
Apple, originally a computer manufacturer, i...
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...heir net sales.
Additionally, Nokia has a history of successful acquisition of companies providing network infrastructure to companies that enhance Nokia’s technological advancements. In 2008 Nokia acquired a leader in mapping on the American market NAVTEQ. This team-up created the first-ever phone with a build in global positioning system (GPS). HERE transformed the mapping system from static to dynamic and celebrates popularity all over the world. Further acquisitions list Panasonic’s network division and the most-recent acquisition of Alcatel-Lucent, also to enhance Nokia’s network business. Nokia listed both Huawei and Alcatel-Lucent as its main competitors in the industry now integrates them to raise the already high barriers of entry.
In the mobile phone market, Nokia faced severe competition that eventually became its undoing. Continue with personalities.
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