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Nokia Case Study

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Submitted By Sophia1976
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Nokia was once the pioneer in the development of mobile phones and became in 1998 the leader in the manufacturing and sales of mobile phones (McCray et al, 2010). Nokia kept its leading position for several years and at the turn of the century Nokia’s products were revolutionary and transformed the entire industry until Nokia was overtaken by Apple with the introduction of its iPhone in 2007. The introduction of the iPhone made Apple the market leader in smart phones and Nokia’s market share started to dwindle. Nokia fell far behind in the smart phone market.
What are the main causes of Nokia’s decline, a company that had once been the pioneer in the market?
Nokia has been very successful and enjoyed the leading position in the mobile phone market for many years. The huge success was the pride of Finland. This leading position in the market led Nokia to develop a culture of complacency. Complacency in a market leader can lead the organisation into a position which is known as the Icarus Paradox. Overconfidence, complacency and carelessness are key symptoms of this paradox. Nokia’s culture of complacency, arrogance and close mindedness coupled with its market dominance led directly to its failure in the smart phone market.
An example of this complacency and closed mindedness was given by a former manager of Nokia, Dave Grannan, who explained the reaction at Nokia when Apple released the iPhone: ‘We have tried touch screens before and people did not like them’ (Burrows, 2011). This statement confirmed that Nokia had developed a touch phone but abandoned the idea as consumers did not embrace it. Since Nokia has been a market leader with its other mobile phones there was no need to further go down the touch screen path and with it Nokia missed out on further research and development. Nokia’s successes blinded Nokia and eventually lead Nokia to failure.
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