Crisis Management

Nokia Oyj was the biggest vendor for mobile phones from the late 1990's, but the corporation from Finland has suffered declining market share as a result of the growing us of smart phones from other vendors. According to Businessweek, They have announced 20,000 job cuts, selling their headquarter building, patents and research facilities in Helsinki to raise money, and their shareprice has plunged about 90 percent since iPhone's debut in 2007.
According to Nokia CEO Stephen Elop, " Nokia will spend to break through." They have been restructuring to be profitable again. It is clear to see they are losing sales, and need to produce competitive mobile devices to revive in the market. Since the managerial team of Nokia was not problem seekers when they were dominant in the market, they have missed opportunities to maintain or progress their position in the market. They ignored the rule that speed matters. When they realized the crisis, it was a little too late. Backing off or waiting did not seem helping the crisis. Recently, Nokia finally has launched a new model called "Lumia", as Nokia has had a strategic partnership with Microsoft using Windows phone operating system. Nokia's reconstructing for new products seem to be still slow compared to their competitors.
The CEO states that "Our clear strategy, if you go all the way to the highest level of our strategy, you talk about three pillars. The first is the smartphone strategy: winning with Microsoft around Windows Phone. The second is our mobile phone strategy: connecting the next billion people to the Internet.
And then a third pillar of our strategy is something we call future disruptions, the things we're doing in the labs which define the next steps in terms of devices and experiences that will differentiate. Supporting all of this, the location-based services...The final piece of the strategy, which is really important, and this is something we're doing a lot of work on, is changing the way we operate as a company."
The price for not being a problem seeker seems huge. Nokia has become one of the windows phones which seem to be very similar to one another. It seems that the managerial team of Nokia is trying to walk on a safe road aided by Microsoft. None of the new strategies seem to be challenging or dangerous. It is ironic that Nokia is spending millions of dollars for reconstructing, but it is questionable whether they are putting them in the right places. Nokia maybe dealing with the symtoms not with the problems,also choosing the wrong problems.
Nokia should have been proactive in anticipating threats and opprtunities earlier. If they had gathered information and prepared differentiation and improvement, this crisis could have been prevented. Their relativelt new management does not seem revolutionary neither. It seems to be they are losing their uniqueness by selling their petents and switching their own operating systems to windows. The solution may be the last option they wanted to choose since it is inevitable to survive in the face changing the smart phone market.







Sources :


http://www.businessweek.com/news/2012-09-26/nokia-dividend-elimination-looms-as-cash-dwindles

http://www.washingtonpost.com/business/nokia-mulls-selling-global-hq-building-in-finland-but-no-plans-to-move/2012/10/03/74558040-0d52-11e2-ba6c-07bd866eb71a_story.html

 http://www.cnet.com/8301-17918_1-57524708-85/nokia-ceo-stephen-elop-well-spend-to-break-through-q-a/#ixzz28aGM67Ba

http://online.wsj.com/article/SB10001424052702303822204577465771376539532.html