Abstract

In the late 1990s, Nokia overtook then leader Motorola to emerge as a behemoth in the global mobile phone industry. Nokia's dominance continued into the first few years of the 2000s, but it suddenly came under threat in 2003-2004, when smaller Asian vendors started making their presence felt with better products at lower prices. The company's problems also had internal causes and analysts said one of the reasons could be that it had become too complacent with its success and lost its agility in reading and responding to market signals. This case study discusses the various problems Nokia faced in 2003-2004, including the company's tardiness in introducing the clamshell phones that had become very popular and its resistance to manufacturing operator specific handsets. It also discusses the efforts Nokia made to recover its market once it realized that its performance was slipping. The case concludes with an analysis of the challenges the company faced in the future and the various options ahead of it.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Appreciate the importance of innovation in a dynamic and volatile industry
• Analyze the effect of changing market conditions on companies
• Appreciate the importance of keeping abreast with changing market conditions and adapting to them speedily
• Examine future challenges that the company faced and the various options available to it.

Keywords

Nokia, Global Mobile Phone Industry, Jorma Ollila, Motorola, Sony Ericsson, GSM, Yrjo Neuvo, Microsoft Corp, Samsung, LG, N-Gage, Vodafone, RAZR V3, Sony PSP, Nintendo