Abstract

Nokia was a synonym for the mobile phone industry for a long time; however,
when it came into the era of smart phones, the former leader was under an
awkward situation. Nokia sold its mobile phone business to Microsoft on
September 3, 2013. The company failed in the impact of the new technology
revolution. This paper studied Nokia’s decline mainly from the three parts. So
analyzing the reasons of its decline from three parts: Nokia executives’ grasp for
the market, the company’s business strategy and business cooperation, and finally
analyzing its inspiration for modern enterprises from the marketing perspective.
From Glory to Decline—The Development of Nokia
As a veteran mobile phone companies, Nokia has experienced multiple
transformations, However, in the era of mobile Internet, Nokia in the third
transformation has been out of orbit, and has not launched star products meeting
the requirements of mobile Internet. Facing the rapid development of Apple and
Android phones, it seemed that Nokia was a bit powerless, and has al-ready lost
the leadership style of the mobile phone industry.
Analysis of the Reasons for Nokia’s Decline
Nokia’s Executives Didn’t Grasp the Market Accurately
The first mobile phone entered people’s life as a tool of calling, and was mainly
dedicated to mobile phone calls to make up for the lack of fixed telephone. People
at that day could absolutely not imagine that they could use mobile phones to listen
to music, watch videos, surf the Internet, play games and even go shopping.
Nevertheless, with the progress and development of science and technology, smart
phones appeared in people’s life, powerful functional machine was unable to meet
the new needs of people, cell phone manufacturers began to real-ize that mobile
phone must be updated. People’s income increased significantly in twenty-first
century, buying mobile phone was no longer as carefully as in the past, mobile
phone was more considered as entertainment tools, the purchase behavior is more
emo-tional and initiative.In the face of the changes of the market and consumer
demand, Nokia still adopted the technology-oriented and product-oriented
strategies to guide the innovation of products, continued to strengthen the inherent
proper-ties of Nokia mobile phone blindly: for example, Nokia was trying to make
its cellphone hard to broken, then exploited new ways to extend its battery’s life
span, and increased the pixel of mobile phones to reach the cam-eras’
standard . The executives focus on products and technology a lot, so as to ignore
that the needs of con-sumers have changed with the market showing different
characteristics. Decision-making that wasn’t based on consumer’s demand lead
Nokia not only to separate itself from the market, ignore the real needs of
consumers, but also to do much idle work.
There Is a Deviation in the Business Tactic of the Company
The traditional 4P theory (including product, price, place, promotion) transformed
into 4C theory (including Consumer, Cost, Communication, Convenience)
gradually. It meant that companies should pay more attention to the products as
well as the consumer needs, so that the product innovation must take the real needs
of consumers into account. Like the mobile phone, what do consumers really care
about, the hardware or software?
Nokia has valued the hardware business a lot and neglected the software business
over a long period of time. The company continued to carry out technological
innovation so as to cause Nokia mobile phones to be a magic that couldn’t be
broken, but ignored the fundamental problems, the incompatibility and closure
property of the operating system. The operating system of Nokia mobile phone was
Symbian, which was very popular in the machine age and did earn a lot of market
share for Nokia. However, in the era of smart phones, Symbian’s drawbacks
gradually emerged and eventually became the biggest hinder for the development
of Nokia mobile phone. Firstly, Symbian system is not compatible, not only having
the multiple incompatible versions, but also having no ability of backward
compatibility, which lead to Saipan 7 application couldn’t run on Symbian 8,
andincreased research and development costs virtually. Secondly, Saipan’s
shortcoming such as not to support touch screen, multimedia and new operation
interface, which meant Nokia mobile phones were at a disadvantage in the smart
phone market. Finally, Saipan’s insisting on 2G development didn’t adapt
to current 3G development momentum. However, even if Symbian’s faults were
well aware, Nokia did not give it up, only because Symbian was ra-ther mature and
brought Nokia huge profits.

Nokia Was Lack of Teamwork

Nowadays, trying to control the market share of a certain industry through the
technology monopoly to obtain high profits was not possible in the context of
product and service homogenization. The biggest mistake that Nokia made
was refusing to cooperate with other mobile phone manufacturers in its business
process. In order to obtain the high monopoly profits, No-kia refused to work with
other mobile phone manufacturers .Re-fusing to cooperate did keep its own
inherent market and achieve the monopoly to a certain extent, while the Symbian
system was very difficult to develop and the application were few, which made it
hardly possible to meet the consumers’ demand; at the same time Nokia’s strong
style also forced other mobile phone manufacturers seek to cooperate with each
other. Owing to Android system was a fully open system, which can be applied to
any phone, so far many mobile phone manufacturers have joined the Android
camp, such as Samsung,HUAWEI, HTC, SONY Ericsson, Coolpad and ZTE, etc.
Many Android camp companies’ cooperation was notonly enough to compete with
Nokia, but also could enrich and improve the Android system develop more ap-
plications meeting the needs of consumers