Nokia was originally
a wood-pulp mill, who through mergers and acquisitions entered the
telecommunications industry. Nokia’s first venture into the telecommunications
market was with radio telephones for the army and emergency responders. Through
the 1980’s Nokia acquired several more electronic companies, most notably Solara,
Scandinavia’s largest color TV manufacture and Luxor the Swedish computer firm.
This was a crucial step as combined into 1 division they produced the Mobira Talkman
in 1982 which was its first car phone to the Mobira Cityman in 1987 which was
its first mobile device.
In the late 1980’s the Soviet Union collapsed,
causing a recession in Europe, thus reducing profits for Nokia (Figure 1).
In an attempt to bring up sales, Nokia signed
contracts with Tandy Corporation and Matra of France to produce mobile phones
for USA and France. This did little to help increase the profits. It wasn’t
until Jorma Ollila took over that Nokia began to see recovery. He streamlined
the corporation by exiting other markets in 1992 allowing them to allocate
further resources into the electronics division. This enabled Nokia to become
world’s largest mobile phone manufacturer in 1998 surpassing Motorola of the
US. Nokia considered the 1990’s its golden years with it products gaining huge
Nokia’s sales declined
as they entered the mid 2000’s (Figure 1), this can be credited to their lack
of planning and ignorance of the changing markets. Although Nokia made some
research into better software for their phones, such as by adopting “Symbian”
operating systems, they mostly focused on hardware. This would be their
downfall. When Apple released its Iphone, they gained massive popularity
(figure 2), their operating system was very smooth compared to anything else on
the market. Nokia since then have failed to keep up with other operating
systems such as Android and IOS. In a desperate attempt to sustain themselves
Nokia adopted windows operating system in 2011. This effort was too little too
late as Andriod and IOS were too far ahead to catch up with (Figure 2).
Microsoft eventually bought out Nokia’s mobile
division, preventing them from releasing any products until the end of 2016. At
the end of 2016 Microsoft sold off its mobile division to HMD (a company made of
ex Nokia employees), HMD now have the permission to market and develop phones
under the Nokia brand and the manufacturing and R&D will be done by Foxconn.
This report will analysis the
factors that will effect Nokia using tools such as SWOT and PESTLE, these tools
will be evaluated on their usefulness too. The report will go discuss the
process of entrepreneurship for Nokia.