Remember when Nokia was the dominant mobile phone manufacturer ?

TakeAway: Once upon a time Nokia was the dominant mobile phone manufacturer.  However, it lost sight of one of the critical components of a successful marketing strategy: people.

Rather than objectively applying an understanding of customer needs into its products and marketing programs, Nokia was content to assume that what customers wanted in the past would remain the same.

So while others like Apple and RIMM developed smart phones with innovations that excited customers, Nokia did nothing and has paid dearly for it. 

It’s trying to get back on track, but it might be too late.

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Excerpted from Bloomberg Businessweek, “How Nokia Fell From Grace,” by Matthew Linn, August 15, 2010

What was the most successful European company of the 1990s? Easy: Nokia. The Finnish mobile-phone manufacturer captured the emerging market for mobile phones and built the industry’s most powerful brand. Its handsets virtually defined the industry from the time it launched its first GSM phone … in 1992. From 1996 to 2001 its revenues increased almost fivefold, and by 1998 it was the world’s biggest mobile manufacturer. In 2005 it sold its billionth handset …

Now, what’s the most disappointing company of the 2000s? Easy again: Nokia. The company has been in steep decline—a point underscored by its Sept. 10 announcement that it was hiring its first non-Finn as chief executive officer. …

Since Apple introduced its iPhone in January 2007, Nokia shares have fallen 49 percent. In a ranking of global brands by Millward Brown Optimor this year, Nokia was No. 43, having dropped 30 places in 12 months. …

Recognizing the scale of its challenges, Nokia hired Stephen Elop, the Canadian head of Microsoft’s business unit, to turn the company around. Everyone will wish him well. … if the guy knows so much about phones, he’s kept it a secret. Microsoft has never made any progress in that industry.

The cruel truth is that for all its residual market share, Nokia looks like a has-been. The company misread the way the mobile-phone industry was merging with computing and social networking. And it’s probably too late to turn that around.

There are uncomfortable lessons here. First, success is not a sinecure. Nokia got to the top of its industry quickly. Once there, it became complacent. … Nokia worried about hanging onto market share rather than creating innovative products that excite customers. Second, Nokia was unwilling to challenge itself. The company clung to the idea that handsets were mainly about calling people. It failed to notice that they were just as much about checking your e-mail, finding a good restaurant, and updating your Twitter page. …

Edit by DMG

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Full Article
http://www.businessweek.com/magazine/content/10_39/b4196007421255.htm

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