Key Problems and Change Program at Nokia

This report discusses the key problems faced by Nokia, including ailing performance in the high-end phone portfolio, implosion in the US market, demotivated workforce, falling market share, and high employee turnover. The report also analyzes these problems using SWOT analysis and leadership concepts. A change program is designed to solve these problems, including motivating employees, building a culture of innovation, headhunting the best tech team, and rebuilding Nokia's image through a comprehensive marketing campaign.

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Table of Content
Brief Introduction............................................................................................................................................ 2
Key Problems or Challenges faced by Nokia......................................................................................... 3
Analysis of the Key problems...................................................................................................................... 4
SWOT.................................................................................................................................................................... 4
Strengths......................................................................................................................................................... 4
Weakness........................................................................................................................................................ 4
Opportunities................................................................................................................................................ 5
Threats............................................................................................................................................................. 5
Leadership.......................................................................................................................................................... 5
Intervention or Change Program at Nokia............................................................................................. 6
References........................................................................................................................................................... 8

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Brief Introduction
Nokia-Connecting People is a Finnish multinational telecommunication, information
technology and consumer electronics company which was founded in the year 1865 in
Espo. The company which employees over 100,000 people spread across 100 countries
earned revenues around €23 Billion in the year 2017. The company was one of the first
movers in the mobile handset manufacturing, and has created some landmark mobile
phones for its users. The company however went down the hill post 2003-2004 due to
evolution of a new software platform (Android) and rise of IPhones. Ever since, Nokia
has been struggling hard to keep up the expectation of its consumers and earn sizable
revenue in the evolving industry (Aspara et. al., 2013).
The report here will identify and discuss the problem faced by the Finnish giant and the
same would be understood using the concepts of leadership and strategic management.
Further in the report, a change program will be designed to solve or improve the
problems faced by Nokia. Thus, this report will help the reader in understanding the
real life situation of one of the world’s largest consumer electronics company.

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Key Problems or Challenges faced by Nokia
Nokia was sitting at the pinnacle of success, until Android was official launched and
integrated with smartphones and IPhone was launched. Ever since, Nokia can be seen
stuck between focussing on its software capabilities and maintaining a positive working
environment in the organization. The trouble for Nokia further intensified in the year
2016 when the deal between Nokia and Microsoft was called off. Some of the key
problems facing Nokia are:
 Nokia has been facing a lot of trouble due to its ailing performance in the high
end phone portfolio. The company which was operating on the Symbian platform
earlier upgraded to Microsoft and recently it came up with new android based
phones. However, the company has yet to travel a lot of miles before it could
match up to the existing smart phone technology (McGrath, 2013).
 Implosion in the US market is a major concern area for Nokia as US market back
in 1990 was the most profitable market for Nokia. But, at present the US market
is exploded with IPhones, Samsung and other Chinese mobile phones, this leaves
Nokia a very little space to make an impact in the market (Ciesielska, 2017).
 The leadership of Nokia was quite old, until 2014, when Rajiv Suri came on
Board. However, the situation in the organization has still not improved and the
new CEO will still take quite some time in clear the earlier mess of Nokia.
 The workforce in the organization is highly demotivated as they do not have any
assurance about their jobs (Nummela, Saarenketo & Loane, 2016).
 Falling market share in another problem at Nokia.
 Nokia is also under the scanner for high employee turnover. Most of its senior
engineers have joined the competitor’s firm (Burgelman, 2018).
 The company failed to meet the failing losses in smartphones by service push
through its Ovi Web Site, but the app store was not successful and was unable to
attract a large number of users (Van Rooij, 2015).
These are some of the problems faced by Nokia; the problems are related to operational,
strategical, financial, managerial, human resources and leadership.

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Analysis of the Key problems
This section will focus on analysis of the problems mentioned above and will analyse
them using some of the concepts and models in management.
SWOT
SWOT analysis in a model used for micro-environmental scan and it helps the
organization to identify the strength and weakness which are internal to the
organization, and helps to ascertain the opportunities and threats which are external to
the firm. The SWOT analysis will help Nokia in creating strategies to minimize the
weakness and combat the threats.
Strengths
 Good brand name and brand recognition worldwide.
 Global presence
 Enriched and long experience in the industry.
 Higher re-sale value of Nokia’s products (Boda & Zsolnai, 2016).
 Nokia’s phones can easily be coupled with accessories.
 Products fall across all price range.
 Products are perceived with high durability, strength and larger battery life.
Weakness
 Poor after sales services
 Inability to beat the threat of android software.
 Failed Lumia products.
 High turnover and falling motivation in the organization
 Shortage of funds
 Falling revenue and dripping profits
 Took a long time in foraying into the Smartphone market, pushing the company
to weaker financial position (LeFloch & Scaringella, 2017).

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Opportunities
 Increasing smartphone penetration across the globe.
 Opportunity to expand into other global markets.
 Rapid proliferation of technologies
 Growing euphoria around the Bothe concept of Nokia (Majonoja, Linko &
Leppanen, 2017).
 Increasing integration of AI and Machine learning in phones for better utility.
 Phones have transformed from a communication device to an essential device.
Threats
 Rising competition from Samsung and Apple.
 Growth in Chinese manufacturers producing low range smartphones.
 Rapidly obsolete technology.
 Increasing price wars (Ajwani et. al., 2018).
 Growth in open ended software platform.
Thus, the SWOT analysis further delves into the problem of Nokia and clearly states that
the company has to focus on its technology and have to come up with creative and
innovative products for its customers.
Leadership
Leadership is both a practical area and skill encompassing the ability of an individual to
influence, motivate, and lead the organization and its individuals to achieve the goals of
the organization. The old leadership of Nokia, under Kallasvuo has been seriously
criticised not only by the veterans at Nokia, but also by industry experts. It was the
inability of the CEO and the management team to foresee the future of smartphones,
which lead the company to a downward trajectory. The CEO completely failed to
understand the pulse of the customers and stopped innovation and creativity in the
organization. The CEO also failed to stop Nokia from stumbling into the path of
darkness; he even failed to ensure a positive working environment in the company. It
was the failed leadership which was the reason for all the troubles at Nokia (Vuori &
Huy, 2016).

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The present CEO Rajiv Suri has a lot of rich experience and can be seen as a leader of
change at Nokia. The prime responsibility of Suri has to build a culture of innovation
and creativity in the organization He has to make changes in the organization which
would take it to the path of growth and sustainability. In order to do so, Rajiv Suri has to
adopt transformational leadership style, where he has to lead the change in the
organization. He also has to empower the employees on the path of change in the
organization. He also has to put efforts in translating the vision of Nokia into the culture
of the organization. An effective leadership will help Nokia in doing away the troubles it
has been facing for quite some time; it will also put the company on the trajectory of
upward moment to regain the lost market share (Wang et. al., 2014).
Intervention or Change Program at Nokia
The intervention or change program will help Nokia to alleviate its present day troubles
and help the company to focus on the goal of sustainability. Some of the key activities
which would ensure the same are:
 The first change the management has to bring in the organization is to motivate
the employees to stay focussed on the goals of the organization. This can be done
by using various theories of motivation such as Maslow, McGregor Theory,
McClelland theory of motivation, Hygiene factor theory and more so to motivate
the employees. Motivation would bring the employees closer to the organization
and help them in performing with enhanced productivity (Jia & Yin, 2015).
 The leadership in the organization has to be dynamic and flexible according to
the changing trends in the business environment. Rajiv Suri, the Present CEO of
Nokia has to allow for practices which would nurture the culture of innovation
and creativity in the organization. The leadership of Suri has to be
transformation so that he can effectively lead the change whilst handling the
resistance of the employees towards the change.
 It has been mentioned that the major plight of Nokia is its inability to step up its
technology to match the existing competition. This has been due to high attrition
of the senior most tech team and lax in marketing research. Thus, if the company
has to get up on its feet, it has to focus on these two aspects. Nokia is required to
get into a head hunting mode and get the best tech team on the planet on board

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with them. The company also has to build its marketing data and based on it,
come up with the future of smartphones and work on the mission.
 At marketing front, Nokia has to rebuild its image and earn back its tagline –
Connecting people. Nokia spends very little amount towards its digital spend,
whereas most of the people involved in game changing in the millennial
generation. The company has to focus on creating a campaign and get back to its
esteemed customer with much better offering and a value proposition. The
company has to design the campaign in such a comprehensive manner that it
takes care of its entire customer segment. Only then, Nokia would be in a
position to strengthen its image in the market and get back the lost market share
(Seo, Lin & Kim, 2016).

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