Case Study – Organizational Change and Strategic Decision Failure of Nokia

Use Nokia’s Strategic Decisions That Caused Nokia’s Failure. The case traces the first signs of trouble and the company’s subsequent decline over the period 2005 to 2010. Pressure in the early 2000s from low-end competitors led to early signs of problems. Then of course the game changed in 2007 with Apple’s iPhone and a year later with phones powered by Google’s Android operating system from HTC, Samsung and others. Nokia was initially dismissive of these new offerings but its proprietary OS, Symbian, was ageing badly and its App store (Ovi) was no match for Apple’s.

As late as 2002, Nokia led the market in the United States as well. However, by 2009 its U.S. market share had slipped to 7 percent (from a high of 35 percent). It had been surpassed not only by its old rival Motorola but also by LG and Samsung, both based in Korea, and Research in Motion, the Canadian‐based producer of the Blackberry. And then, of course, there was the hottest—or perhaps more accurately the coolest— smartphone of all, the iPhone. In some ways, it might be said that Nokia’s weakness in the U.S. market was the result of conscious strategic decisions made by the company. Nokia built its phones on the European standard GSM format rather than the U.S. standard CDMA format. This decision allowed Nokia phones ease of access to world markets. By mass production of phones for a global market, Nokia lowered production costs. However, the decision limited its access to the U.S. market, where over half the phones operated with CDMA. Then too, Nokia failed to forge close ties with wireless providers, instead offering open phones that would then need to be adapted to a particular provider. Nokia’s approach worked well globally. In the United States, however, wireless providers—Verizon, Sprint Nextel, AT&T, which together controlled 96 percent of the U.S. market— wanted to offer phones themselves that could be cobranded and bundled with long‐term service contracts. Perhaps most damaging, however, was Nokia’s lack of responsiveness to the shifting tastes and expectations of the U.S. customers. Mark Louison, head of the North American unit, conceded, “In the past, we had a one‐size‐fits‐all mentality that worked well on a global basis but did not help us in this market.” Recognizing its growing weakness in the United States, Nokia placed an American on its management board in 2007, hired another American to be its chief development officer and moved its chief financial officer (CFO) to an office in the States.

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1. Describe the problem that may have precipitated the decision, as well as the apparent processes used by the leaders involved in the decision-making effort. Use terms from this course.

2. 2. Critique the processes they implemented, applying what you learned from this course.

$ 3. Recommend a different approach that could have been taken, using theories and methodologies from the case study.

4. Present a strong case for how your recommendations could have altered the decision made, leading to more effective results for the organization.

5. Please give overviews of the following

a) Company Strategic Plan & Cultural and ethical impacts

b) Leadership’s Decision-Making Process Overview

c) Assessment of the Decision Outcome

a. Effective and ineffective decision-making factors

b. Approach for successful decision-making outcome

Useful Links for References’s_Mobile_Phone_Business_Wisdom_and_Stupidity_in_Strategic_Decision-making

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