assignment 2
arqbogs
NokiaTechnologyCompany.docxRunning head: NOKIA TECHNOLOGY COMPANY 1
NOKIA TECHNOLOGY COMPANY 3
Nokia Technology Company
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Nokia Technology Company
Nokia Technology Company is one of the oldest and most renowned mobile manufacturers in the world. Although the company's performance has slightly been impacted by global trends and increasing competition from companies such as Samsung and Apple, it still maintains its position as one of the world's most iconic mobile phone companies. Nokia Corporation was established in 1865 in Espoo, Finland ("Nokia," n.d.). The company managed to achieve considerable growth and expansion over the years due to implementing the right strategies. As of 2018, the Nokia corporation was employing approximately 103 000 people sourced from about 100 countries (Kapko, 2021). The company had operations in 130 countries around the world. Nokia also reported annual sales of around 23 billion pounds.
Nokia technology started as a pulp mill before moving into the rubber and cable industries. It was not until the 1990s when the company ventured into large-scale telecommunication infrastructure (Wang, Hedman, & Tuunainen, 2016). The company focused on technology development and licensing, contributing immensely to the mobile telephony sector. Over the years, the company has managed to release different Nokia phone brands, most of which were revolutionary. In 2014, Nokia sold its mobile phone business to Microsoft, creating Microsoft mobile (Wang et al., 2016). The sale of its mobile business enabled the company to focus more on its telecommunications infrastructure business and improve the internet of things technologies (IoT). The company further diversified into other areas such as virtual reality and digital health (Wang et al., 2016). Despite exploring new horizons in technology, the company was still struggling to make profits. Its dwindling profits forced the company to lay-off hundreds of employees and closed various operations in different countries. In 2016, Nokia announced the Nokia brand's return after reviewing the opportunities existing in the mobile phone industry (Simon, 2016). A licensing arrangement with HMD Global facilitated the return of the Nokia mobile phone.
Some of Nokia's major competitors are Apple, Samsung, Huawei, Blackberry, Sony mobile, and Palm. Nokia has to constantly come up with effective competitive strategies to ensure that it stays in the market and maintain sits competitive advantage.
Challenges Affecting Nokia
A decline in business in 2020 forced Nokia to lay off more than 6,000 employees which is approximately 6.4% of its workforce. In 2019, the company had laid off another 5,000 employees representing approximately 4.6% of its workforce (Kapko, 2021). The company ended 2020 with 92,039 employees after cutting off approximately 6,283 jobs in the same year. There are indications that the company will lay off more workers in the coming years as part of its three year turnaround plan which was started by CEO Pekka Lundmark (Kapko, 2021). The CEO also increased pressure on various business units in the company to grow in their respective segments or face cuts. The job cuts are consequences of the poor performance posted by the company in recent years. Much of the company's decline has been attributed to poor leadership that lacked the courage to make important decisions (Kapko, 2021). The previous leadership at the company forced various business segments to come up with technologies under pressure to perform. As a result, the company could not come up with competitive innovations to compete with other companies like Samsung and apple. In a bid to cut operational costs, the company embarked on a program to reduce its workforce. In 2020, the company also reduced the size of its executive from 17 to 11 people (Kapko, 2021). The company further relocated 14,000 employees from corporate functions to its four business groups.
Kapko (2021) states that poor leadership strategies and a lack of innovation are among the reasons that caused Nokia to lose its competitive advantage and control of the mobile phone market. The company needs to attract young and innovative leaders with a proven track record if it has to bounce back and reclaim its market share.
The analysis of Nokia's history and recent performance reveals that it is an important player in the technology industry. The company needs to come up with strategies that can enable it be a leader in mobile innovation and other technologies. The company could also borrow a leaf from what other companies like Samsung and Apple are doing.
References
Kapko, M. (2021 March 6). Nokia slashed more than 6,000 jobs in 2020. SDX Central. Retrieved from https://www.sdxcentral.com/articles/news/nokia-slashed-more-than-6000-jobs-in-2020/2021/03/
Wang, J., Hedman, J., & Tuunainen, V. K. (2016). Path creation, path dependence and breaking away from the path: Re-examining the case of nokia. Journal of Theoretical and Applied Electronic Commerce Research, 11(2), 16-27. doi:http://dx.doi.org/10.4067/S0718-18762016000200003
Simon, J. P. (2016). How to catch a unicorn? an exploration of the universe of tech companies with high market capitalization. Communications & Strategies, (104), 99-116,127.
Nokia (n.d.). About us. Retrieved from https://www.nokia.com/about-us/
