Change management Nokia

Change:
An Empirical
Study On Nokia
Presented by:
Debleena Dutt
Ravula Gayathri
Ankita Bhattacharya
Rahul Sekhar
OLS. Group V. Sem IV

“To improve is to change; to be perfect is to change often.”
Winston Churchill (1874-1965)

Why Nokia’s Organizational Changes Is Necessary ?
Q3 2011 Market Share

23.9

22

2012 Market Share

2013 Market Share

24.6
18.7

19.1
13.9
8.3
3.2

S am s ung

Nok i a

A ppl e

Source: Gartner
(2014)

7.5

Major Organizational Changes In Nokia

199
0

Core Strategy

200
6

Mapping
Capabilities

200
7

Joint Venture

201
1

Joined Microsoft

201
3

Moved to
Microsoft

Analysis Of The Present Crisis

Nokia is facing some serious difficulties and must go through some massive organizational changes to respond to the perils.

Market Share

Nokia once was a tech giant , but now? That story is only history.

In the third quarter of 2007, Nokia's market share was 48.7 percent. By the third quarter of 2013 the company's market share had slipped to just 3.5 percent.
Source: Statista, The Statistics Portal.

CURRENTLY USING

FIRST PHONE

29
%

71
%

70
%

Nokia

Others

Nokia

Symphony 32%
Samsung 13%
Sony 10% iPhone and others
16%

Nokia has lost a huge portion of its loyal users

Source: Gartner

Operating Platform Preference
People like user friendly , bug free, touch based operating systems

7%

13%
79.3 %

iOS iOS is popular for its great touch sensitive interface and smoothness of application running

Android
Android is regarded as most user friendly, universal and easy to use with nice use of colored themes Windows Mobile
OS

Windows mobile OS is not much appreciated by users and they use it just because they come with
Nokia

Competitor (Samsung) Got It Right

•

Placed its bet on Android OS for Smartphone

•

First to launch what many called an iPhone look alike

•

Variety of Smartphone's for different segment

•
•
•
•

•
•
•
•

•
•
•
•

Experience
Largest network of selling & distribution
Strong customer relation
Wide range of products for all class

New growth markets
Concentrate on Smartphone's
Well designed and styled set
Mini notebooks

Low voice quality
Less stylish in low priced products
Heavy sets
Unlike Samsung, Nokia N-series is complex, tough and not user friendly

Strength

Weakness

Opportunit y Threat

• China mobiles – It has made exact copy of Nokia
• Competitors like Samsung & Apple
• Sales may decline due to global economic downturn
• Poor standard downgraded Nokia

Microsoft’s Acquisition of Nokia
And the reactions…

3%

It will be a success 41%
55%

It will be a failure Uncertain

The majority believes that tagging with Microsoft is a wrong decision

Survey was conducted by Gartner

KEY CHANGE TRIGGERS
A glimpse of the factors that are indicators for bringing change

Monopoly
Rise of touchbased modern smartphones Nokia failed to respond to growing touch based smartphones while HTC, iPhone took the full advantage The Finnish phone maker launched phones with innovative features and different form factors to quickly respond to the market’s needs, which led it to become the largest handset manufacturer in the world

Market disruption brought by Apple’s iPhone In January 2007, Apple launched the iPhone, a revolutionary smartphone that packs with a large capacitive touch screen that supports multi-touch gestures.

Bureaucracy
An ex-manager in Nokia estimated that Nokia used to have over 300 Vice Presidents and Senior Vice Presidents around the globe

Sources Of Resistance To Change

Inside the organization: Employees’ resistance Resistance to Change

Outside the organization :
Markets’
resistance

Employee’s Resistance
Fear of employee Disagreement with management
Wave of resignation Cultural difference • Losing job
• Changes in job role

• Holding their lack of excellence as the cause of failure
• Getting into partnership with Microsoft

• Key personnel
• Skilled employees
• Lay-off by Microsoft

• Uncertainty avoidance
• Masculine vs. Feminine

Market’s Resistance
Customer’s
resistance
Network
operator and
Intel’s resistance
Software
developer’s and shareholder’s resistance

• Acquisition of Nokia and Microsoft
• Embracing Windows as operating platform

• Fear of losing business
• Choosing MS as strategic partner

• Principles of open source vs. proprietary platform
• Decrease in the value of market share

Kübler Ross’s Five Stages of Grief
Stage

Interpretation

Denial

Denial is a defensive response. It is the conscious or unconscious refusal to accept facts, information or reality relating to the situation.

Anger

When people deal with emotional upset they can get angry with themselves or with other people.

Bargaining

People facing change often seek to negotiate a compromise. Depression

During periods of change people may feel there is little purpose in their work.

Acceptance

Eventually people pass through the period of depression and begin to accept the their loss or change in circumstance. The Stakeholders’ Reactions On Nokia’s Strategy Change
Can Be Reflected On The Kübler-ross Grief Model:

Emotional Response

February-March 2011

Anger
Bargaining
February 11 ,2011 announcement Lumia phones lunched in Q4 2011

Shock

Profitable Q4 2012

Acceptance
Test
Denial

Depression

Time

Recommendations
 Quality offline maps
 Remove bureaucracy
 Superior hardware design

 Intuitive user interface decision
 Gain trust of employees
