Failure Of Nokia

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As it was stated in the introduction, with the smartphone revolution, Nokia failed to understand the future direction of mobile devices. This underestimation of the rising innovation, in terms of global market shares, led to a drastic decline – from 2007 to 2013, the company lost 45.2% of its market shares (Statista, 2014). It is worth mentioning, that in 2004, at Nokia’s Espoo headquarters, researchers have presented a mobile phone prototype, which was able to connect to the internet and it was controlled by a touch-screen (O'Brien, 2010). However, Nokia’s senior management had rejected the idea, stating that it would be an expensive failure to develop it. That allowed American and Asian companies to become leading companies, as they adopted a more innovative idea of the smartphone. Despite the fact that the company started to lose its market shares to competitors, Nokia tried to take the role as strategic innovator by…show more content…
For instance, Nokia Networks recently revealed the programmable 5G architecture infrastructure which is able to adjust automatically radio access and core network resources by meeting the needs of different services (Nokia, 2015). Being innovative in the telecommunication industry means for Nokia competing in a fast developing and booming networking sector, which generates most of the company’s revenue. Chaudhuri (2015) believes, that in Nokia’s case, presence in telecommunication industry is more profitable than mobile handsets manufacturing. This strategy shift may allow the company to win the game by redefining market orientation. To support this example, the author uses the Ericsson case, which illustrates the company's decision to sell its handset business to Sony, after it lost its ability to compete with other manufacturers. Ericsson's focus on mobile networks allowed the company to be

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