Crack in Nokia Business: Innovation Failure of a Giant.

Crack in Nokia Business: Innovation Failure of a Giant.

An old Nokia Mobile Phone image by shutterstock.

Sell is like oxygen to a business and Nokia had ensured that sell abundantly for a certain period in the market.

Usually, a business perishes even from its peak because of reduced sell as its markets keep shrinking day after day.

But why?

In the long passage of business history, we saw giant brands collapsing in no time. Researchers and experts have almost equally held one thing responsible for this- innovation failure.

In this article, we will scurry by the harsh road where Nokia, once the giant of the cellphone making industry, had to learn this vital truth the hard way. 

1.  Above the Cloud

Successful businesses stay afloat at their peak for a certain period. To many, those business brands feel like the eternal. Consumers sit, stand, walk, and talk about those brands. In a word, these brands turn ubiquitous. 

The same was the case for Nokia.

Nokia, once the world’s trendsetting mobile phone maker, used to capture the major share in the mobile phone market for two decades. 

Such was Nokia's influence on its loyal customers that it became unofficially a people’s brand by 1998 securing its undisputed position as the world leader in the mobile phone manufacturing market. 

By 2000-01, Nokia accumulated about fivefold annual turnover in its business from €6.5 billion to €31 billion. Mobile phone subscriptions for Nokia surpassed 2 billion worldwide by 2005. This justified their marketing slogan, "Connecting People".The Guardian, "Nokia: the rise and fall of a mobile phone giant" by Angela Monaghan, September 2013

2.  The Sloping Edge

Top managers and executives at certain points of time of their long-established enterprises see things blurry. They fail to notice the leaning point of their business.

Nokia failed scrupulously to realize the concurrent technology demand when it was at its peak.

Declining of Nokia mobile phone sells. Source: http://disruptiveinnovation.se/?tag=collapse

Customers’ taste in mobile phone took a three-sixty degree turn by receiving the renovated Motorola Razr in the market in 2004. Besides, its market share declined in the year 2005 despite leading the market with a 35% market share.

3.   The Dead End

As every other venture in the market, a declining business is compelled to stop at some point. It starts slipping down the slope.

The telecom markets had evolved by 2004-05 except Nokia. They refused to change and undermined innovation.

A Nokia Lumia mobile phone image by shutterstock.

Finally, Microsoft took over Nokia back in 2007 for nearly $7.2 billion since it had completely lost its market to Apple, Google, and Microsoft in the telecommunication business. Many business experts called this event an 'investment on a sinking ship'.

Nokia might have joined hand to stay afloat but seemingly lost its head before doing so.

Bottom Line

You can’t survive with your business on the same technology forever. The modern era requires the tech-adaptation even from non-tech enterprises nowadays. You like it or not, adhering to a progressive technology is now a procedural demand in every industry. 

What you achieved with simple programming just five years ago may not be viable now. You must equip the sophisticated tech research and development with a vivid stat on customer demand. 

Constant innovation-success is the secret to your business success. Make it possible by knowing your existing as well as the potential market. Because your one deal can either take your business through the roof or crash-land it in nowhere.