Quality Control in Operations and Supply Chain Management: A Case Study of Nokia

RUNNING HEAD: INTERNATIONAL BUSINESS
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NOKIA
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INTERNATIONAL BUSINESS 2
Quality Control in Operations and Supply Chain
Management
Supply chain management is the supervision of the flow of goods and services with the
management of all processes that renovates raw materials into the finishing product. Supply
chain management helps the company to launch a new product in an efficient manner. The
supply chain of product covers every process from production to product development. Supply
chain management upsurges customer values and competitive advantage.
Nokia product failure
Nokia is a multinational corporation founded in the 12 May 1865. The company
expanded and launched several products. The company engaged in the business of computer and
mobile phones. Competition of smartphone business changes the automobile industry but Nokia
failed to adapt the competitive change and there was an epic failure of product. In 2014,
Microsoft takes the mobile phone business. The strength of Nokia’s company is a GSM handset
which becomes an instant hit and when it is launched. Nokia was the global leader in the mobile
phones but due to the product, Failure Company has lost its customer base from the market.
Nokia used to holds a vast portion of the smartphone until the iPhone came out in the market in
2007.
Nokia’s supply chain management
Nokia’s supply chain management is a significant operational area. All the products and
services are sold under the brand of Nokia and comply legally with the value chain. Symbian OS
product was failed because it was not creating something unique and facing competition from the
IOS and Android. Symbian OS the new product that launches by the Nokia failed due to main
reason as they launch at the time of the declining condition of Windows and it was the great
mistake of the company. The new products of the company lead to the ultimate collapse of the
company.

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Decisions that led to the failure
The innovate brand of the company failed to adapt the changed smartphones with full
touchscreen and application-based operating system. The innovation in the smartphone industry
did not accept by the company and did not keep with customer’s expectation that results in the
reduction of the consumer base. Nokia continued its focus on the Symbian series by neglecting
the innovation in the smartphone business. The company did not focus on the Windows phone
and give a slow response and suffered the demise. One of the potential reasons for the collapse of
failure of the product is lack of innovation. The other users in the mobile industry adapt the
change such as Samsung, blackberry and apple. Umbrella branding strategy implemented by the
Nokia in the N-series but it was an epic failure and failed to create a buzz among customers
(Doz, 2011).
Microsoft acquired the Nokia; Nokia unwillingness in adaptation in the
marketing change was the reason for the company’s loss and turned down of the brands.
Innovation change in the smartphone industry is usual and if companies failed to adapt they will
definitely remove from the market by competitors. Nokia’s product failures were the main reason
that Microsoft acquired Nokia.

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Figure: Nokia sales until 2018
Source: (Bolaji, 2019)
Relevant issues related to the product recall
Product recall means appeal from the manufacturer to return the product due to the
defects and safety issues that can cause harm to the consumer or may cause risk to the seller and
buyer. Investigation of the product recalls in the Nokia states that manufactured batteries of the
Nokia, could cause explode or short-circuit. The 46 Million BL-5C batteries of Nokia returns
back from the manufacturer due to the safety issues in the product. As according, the safety or
health issues in the recall Nokia BPM+ product affected the health of a person and creating the
systolic and diastolic pressure with an arm circumference ranging from 22 to 42 cm (Sharma,
2014).
Product recall of the company depends on the quality maintained by the company in the
supply chain. In Nokia, 66% recalls is due to the design, safety and vendor quality. Nokia faced
an intimidating challenge of product recall and replaced the 46 million faulty batteries. Defective
products returned by the customers create the situation of a product recall that affects the
company’s profile and goodwill in the market. Nokia’s product recall is mainly due to the
design, safety analysis, and vendor quality. The product recall mainly depends upon the quality
managed by the company in the supply chain. Nokia brings quality change in the supply chain by
implementing the product advisory (Olenski, 2016).
Long-short term effects of a product recall that Nokia suffered and cause serious
consequence for the company. The short-term effects of a product recall in Nokia that they faced
declining cash flow and degradation in the goodwill of the company. Product recalls dissatisfied
the customers and reduce the customer base. Nokia recalls of 46 million from the market have a
negative impact on shareholder value. The recall volumes and long-term abnormal return faced
by the Nokia after the product recalls. The long-term effects of a product recall in Nokia affect
the financial performance of the Nokia. The product recall affects manufacturers and suppliers at
the end (Chamikutty, 2010)