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The loss of market share (A case study of Nokia)

   

Added on  2020-04-15

15 Pages3283 Words319 Views
Running head: REPORT ON THE LOSS OF MARKET SHAREReport on the loss of market share (A case study of Nokia)Name of the student:Name of the university:Author note

1REPORT ON THE LOSS OF MARKET SHARETable of Contents1.Introduction..............................................................................................................................22. Consumer Behavior.....................................................................................................................4Cultural factors............................................................................................................................4Social factors...............................................................................................................................5Personal factors............................................................................................................................5Psychological factors...................................................................................................................53.Government regulatory and economic policies........................................................................64.Environmental factors..............................................................................................................75.Nokia’s response......................................................................................................................86.Recommendation......................................................................................................................97.Conclusion..............................................................................................................................12Reference.......................................................................................................................................13

2REPORT ON THE LOSS OF MARKET SHARE1.IntroductionNokia is a telecommunication company which was established in the year 1865 but it wasacquired by Microsoft in the year 2014. But again the company was sold off to the supply chainof Apple, Foxconn in exchange of $350 million. In the din and bustle of buying and selling, theNokia Company had reportedly lost 766 million Euro in the year 2016. The cause of the loss hasbeen described by the company as the fall in network sales and the shooting of costs fromacquirement and incorporation of Alcatel- Lucent. In the years 1998- 2011, the company wasleading in the making of mobile phones but gradually suffered losses owing to the boomingindustry of smart phones. Apart from the introduction of smart phones, the rise of competitorssuch as Apple and Android has been accountable for the loss of Nokia ("Our history | Nokia",2017). With their severe loss in the market the company planned to cut 1700 jobs all over theworld in 2009 in order to gradually respond to the introduction of new devices and technologies.This reduction in jobs continued till 2012 as Apple and Android became a major obstacle in thepath of Nokia. The reason behind this was that Nokia was more of a hardware company than asoftware company. They were more focused on the physical components of their product ratherthan paying attention in the technological aspects. The biggest mistake on their part was tounderestimate the significance of software which includes different applications of the mobilephone. In contrary to its competitor Apple, the hardware engineers of Nokia had alwaysdominated the software engineers which resulted in the company to lag behind in technicalaspects. Not only that, the company had also failed to understand the importance of transition tosmart phones. It can be analyzed that a market survey would have helped the company to

3REPORT ON THE LOSS OF MARKET SHAREmeasure the pulse of the target group and launch their products as per the demand of the market(Ciesielska, 2017). Another major fault of the Nokia Company was that they were overconfident of their ownbrand and products. They had a misconception that even if their entry in the smart phone marketis delayed, it will not hamper their sale. They were not successful in recognizing thecontemporary brands of the same sector which were not flexible as before. Even after many daysof the launch of Apple iPhone, Nokia still did not stop insisting the people that they can win overthe competitive advantage with their unique design which failed miserably. It can be contradictedthat the adoption of Windows technology had been a mistake on the part of the Nokia companywhile it can also be said that their own operating system was also outdated and neededmodification. In the period of superior technology, Nokia failed to answer the call of innovationwhich affected their sale and reputation. The deadly combination of overconfidence andunderestimating posed a fatal outcome on the company. The most valuable brand in the worldbecame the worst sufferer because of major mistakes on their part (Laamanen, Lamberg &Vaara, 2016).

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