Alarm Bells Ringing: Nokia in 2010
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Case Code: BSTR386 Case Length: 20 Pages Period: 2009-2010 Pub Date: 2011 Teaching Note: Not Available |
Price: Rs.600 Organization: Nokia Corporation Industry: Mobile Phone Countries: Global Themes: Competition |
Abstract Case Intro 1 Case Intro 2 Excerpts
Market Leader in Trouble
In September 2010, Stephen Elop (Elop) joined Nokia Corporations (Nokia) as the President and CEO. Elop, former head of Microsoft's Business Division (MBD), was brought in to fix the numerous problems faced by the world's leading mobile phone company. His tasks included the onerous job of reversing not only Nokia's eroding market share in the high-end smartphone segment but also its slumping profits. "My role, as the leader of Nokia, is to lead this team through this period of change, take the organization through a period of disruption. My job is to create an environment where those opportunities are properly captured, to ultimately ensure we are meeting the needs of our customers, while delivering superior financial result," said Elop.
In September 2010, Stephen Elop (Elop) joined Nokia Corporations (Nokia) as the President and CEO. Elop, former head of Microsoft's Business Division3 (MBD), was brought in to fix the numerous problems faced by the world's leading mobile phone company. His tasks included the onerous job of reversing not only Nokia's eroding market share in the high-end smartphone segment but also its slumping profits. "My role, as the leader of Nokia, is to lead this team through this period of change, take the organization through a period of disruption. My job is to create an environment where those opportunities are properly captured, to ultimately ensure we are meeting the needs of our customers, while delivering superior financial result," said Elop.
The Finland-based Nokia had a presence in over 160 countries as of 2010. Though it was the world's largest mobile phone maker with a market share of 35% in the first quarter of 2010, Nokia had been losing market share consistently in the high-end mobile phone market.
According to analysts, problems began for the company with the increase in the global demand for smartphones, a segment in which Nokia was unable to find its footing compared to rivals like Research In Motion (RIM) and Apple. Nokia was not only slow in launching smartphones with the latest version of its Symbian operating system (OS), but also in catching up with the touch-screen technology, they said. Nokia's major problems were development of new software services, hardware design, and North American distribution. The plunging market share price and dwindling investor confidence ultimately led to Elop replacing Olli-Pekka Kallasvuo (Kallasvuo), who had been CEO since mid-2006.
Experts opined that under Kallasvuo, Nokia had struggled to keep up with rivals in the smartphone segment, the most profitable and fastest-growing segment in the global mobile phone market. Analysts felt that Elop had a tough road ahead as he had to establish the company's presence in the smartphone segment and increase its profits. Moreover, he would have to revitalize the Nokia brand and stand up against the competition....
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