Nokia Case Study
Assignment 1 – Nokia Case Study
Introduction:
As a former global leader in the cell phone industry, Nokia have a history of great ability to adapt new markets with a solid strategy. Formed in 1865, Nokia started out as a lumber mill and moved on to the production of electricity and rubber. In 1992, Nokia decided to focus solely on the cell phones industry and rapidly obtained great market share, and later became pioneers of the wireless revolution which derived the smartphones. Despite this impressive past and former position in the cell phone industry, it is obvious from the case study that Nokia have several problems causing the crucial recession of its market share the past years.
One of the problems is the slow decision making which halts the possibility of innovative activities. Despite a staggering cost of 40 billion dollars on Research and Development, none of Nokia’s cell phones reached the market due to the bad decision making and internal rivalries. In the cell phone industry, it is crucial that you act fast or else you will be outrun by the competitors, which is exactly what happened with Nokia.
Rothaermel, Hess (2010, p. 13) states that consistent innovation is the factor that drives the worlds successfully companies and explains that innovation is a crucial competitive advantage for companies in a harsh economic time as it allows them to change the market in their favour and hopefully become market leader. Without any changes in the decision making process and in the innovative culture, Nokia will keep declining, as their competitors such as Apple and HTC Corporation will keep being in front and control the market.
This paper will argue that, in order to achieve a bigger market share and a better competitive advantage, Nokia needs to speed up their decision making and change their innovative culture and the linkage between these activities. Relevant theory will be discussed as well as recommendations for future activities will be provided, in
Introduction:
As a former global leader in the cell phone industry, Nokia have a history of great ability to adapt new markets with a solid strategy. Formed in 1865, Nokia started out as a lumber mill and moved on to the production of electricity and rubber. In 1992, Nokia decided to focus solely on the cell phones industry and rapidly obtained great market share, and later became pioneers of the wireless revolution which derived the smartphones. Despite this impressive past and former position in the cell phone industry, it is obvious from the case study that Nokia have several problems causing the crucial recession of its market share the past years.
One of the problems is the slow decision making which halts the possibility of innovative activities. Despite a staggering cost of 40 billion dollars on Research and Development, none of Nokia’s cell phones reached the market due to the bad decision making and internal rivalries. In the cell phone industry, it is crucial that you act fast or else you will be outrun by the competitors, which is exactly what happened with Nokia.
Rothaermel, Hess (2010, p. 13) states that consistent innovation is the factor that drives the worlds successfully companies and explains that innovation is a crucial competitive advantage for companies in a harsh economic time as it allows them to change the market in their favour and hopefully become market leader. Without any changes in the decision making process and in the innovative culture, Nokia will keep declining, as their competitors such as Apple and HTC Corporation will keep being in front and control the market.
This paper will argue that, in order to achieve a bigger market share and a better competitive advantage, Nokia needs to speed up their decision making and change their innovative culture and the linkage between these activities. Relevant theory will be discussed as well as recommendations for future activities will be provided, in
References: Rothaermel, F.T & Hess, M (2010), ’Innovation Strategies Combined’, MIT Sloan Management Review, Vol. 51, No. 3, pp. 13-15, viewed 20 April 2013, ProQuest Research Library, Eisenhardt, K.M (1989), ‘Making fast strategic decisions in high-velocity environments’, Academy of Management Journal, Vol. 32 No. 3, pp. 543-76 Judge, W.Q & Miller, A (1991), ‘Antecedents and outcomes of decision speed in different environmental contexts’, Academy of Management Journal, Vol. 34 No. 2, pp. 449-63 Baum, J.R & Wally, S (2003), ‘Strategic decision speed and firm performance’, Strategic Management Journal, Vol. 24 No. 11, pp. 1107-29 Zehir, C & Mehtap, Ö (2008), ‘A field research on the relationship between strategic decision-making speed and innovation performance in the case of Turkish large-scale firms’, Management Decision, Vol. 46, No. 5, pp. 709-724, viewed 20 April 2013, ProQuest Research Library, DOI http://dx.doi.org/10.1108/00251740810873473 Han, J.K, Kim, N & Srivastava, R.K (1998), ‘Market orientation and organizational performance: Is innovation a missing link?’, Journal of Marketing, Vol. 62, No. 4, pp. 30-45, viewed 20 April 2013, ProQuest Research Library, Andersen, T.J (2001), ‘Information technology, strategic decision-making approaches and organizational performance in different industrial settings’, Journal of Strategic Information Systems, Vol. 10, pp. 101-19 Blundell, R, Griffith, R & Van Reenen, J. (1999), ‘Market share, market value and innovation in a panel of British manufacturing firms’, The Review of Economic Studies, Vol. 66, No. 228, pp. 529-554, viewed 21 April 2013, ProQuest Research Library, Eisenhardt, K. M (1999) ‘Strategy as strategic decision making‘, Sloan Management Review, Vol. 40, No. 3, pp. 65-72, viewed 21 April 2013, ProQuest Research Library,