Nokia has gone through a lot of transformational change over the past two decades. The company has successfully shifted from a mobile phone Company to a leading telecom infrastructure provider. Today, we’ll discuss the Nokia change management case study; the company’s historical background, key internal and external factors causing change, Nokia’s plan for CM, and successful driving forces.
There were various factors that pushed the company towards transition and transformation, and some of them are as follows;
- Changing customer preferences and needs
- Technological development
- Shifting marketing conditions and circumstances
Nokia’s strategic approach towards change management was the most successful transformational factor out of all those factors.
Historical Background of Nokia
Nokia was a Finland-based company and it used to offer a wide range of products and services like cables, rubber, paper, and various others. The company shifted its focus to telecom equipment and products in the 1980s, but the brand was a very small player in the telecom industry.
The company’s top management made a strategic decision to completely shift its focus on the mobile phone market in the late 1990s. It allowed Nokia to gain mass popularity across the world because the company realized the growth potential in the mobile phone market. However, Nokia invested a lot of resources in research and development in order to launch user friend and innovative mobile devices.
Nokia’s shift to the mobile phone market turned out to be successful and it paid off very well in the early 2000s. It allowed the company to become the world’s leading mobile phone manufacturing company with the highest market share. However, the reason Nokia achieved success and won the market share was by offering a wide range of mobile phones to different types of customers at different prices. Some of its USPs are as follows;
- Internet connectivity
- Mobile phone built-in camera
- Tech efficiency
Nokia couldn’t maintain its market dominance for a very long time. It is because the company found it difficult to pace up with the rapid innovation in technology and the introduction of new competitors like Samsung and Apple in the mobile phone market. Resultantly, the market share of Nokia started decreasing by the 2010s and the company sold its mobile phone business to Microsoft by 2014.
Nokia reshifted its focus back to the telecom infrastructure equipment and services, and it became a great success story for the company. The brand purchased the French telecom equipment infrastructure company Alcatel-Lucent in 2015.
Key Factors Caused Change
There are variously internal and external factors that pushed the company to shift from mobile phones to telecom equipment infrastructure service providing company by implementing the change management approach. The main internal and external factors in the Nokia change management case study are as follows;
I-Strong Background in Telecom
Nokia has got a strong historical background in manufacturing telecom equipment and offering telecom infrastructure services. Expanding your business on an already-established foundation is much easier rather than starting a new one.
The top leadership and management of Nokia understood the changing market trends and conditions and came up with the strategic decision of shifting its focus toward a telecom equipment infrastructure service-providing company.
III-Partnership & Acquisition
In order to gain a competitive edge and expand its tech capabilities, Nokia made a strategic partnership with Xiaomi and purchase French telecom company Alcatel Lucent. Once the company has the equipment and expertise, the transformational phase becomes much easier.
IV-Research & Development
Nokia allocated a lot of resources for research and development; it allowed the company to launch new products and services in the telecom equipment infrastructure service providing company.
Back in 2015, Nokia rightly recognized the potential growth in the telecom industry and the demand for 5G network services. It allowed the company to successfully tap into the new growing area, diversify its resources, and expand its market share.
The growth of smartphones declined the growth and sale of Nokia’s button-pad phones. The smartphone manufacturing industry is growing at an exponential rate, and they all need speedy internet and telecom network. That’s where the role of Nokia comes into play.
Tech advancement in the smartphone industry has made it nearly impossible for Nokia to maintain its pace with them. Instead of dumping its resources in an already established industry, it focused on the growing field that has a potential for success.
Samsung and Apple have been dominating the smartphone industry for the past decade, and they caused the fall of Nokia’s mobile phones. Ultimately, the company loses its market share, growth, and profitability.
Plan for Nokia Change Management Case Study
In order to deal with employees’ resistance, Nokia followed the flexible change management approach. Some of the key planning steps in the Nokia change management case study are as follows;
- Learning & Education: Nokia communicates the change management program with its employees
- Contribution: the company asks for their participation and contribution to the change program and how it is beneficial for them
- Supporting: Nokia offers them support and guidance in order to facilitate their participation
- Discussing: the company negotiates with its employees about the change program
- Manipulation: in order to manipulate the minds of employees towards the change program, offer them rewards
- Coercion: in the unavailability of other options, Nokia had no other choice but to transform into the telecommunication infrastructure
Successful Change Management of Nokia – Drivers
Some of the main drivers for the successful change management of Nokia that have allowed the company to shift from mobile phone manufacturer to telecommunication infrastructure provider; are as follows;
For a successful transition into a telecommunication infrastructure service-providing company, Nokia invested a significant amount of resources. Investment in R&D allowed the company;
- Gain a competitive edge with new tech features
- Offer innovative products and services
- Establish a powerful portfolio of intellectual property
Adaptability & Agility
In order to remain competitive in the changing environment, agility and adaptability allowed businesses and organizations to achieve growth and success. Nokia quickly realized the growth potential in the telecom industry and successfully tap into it.
Nokia has established a clear strategic direction at different levels of the organization. It is to make sure that all the stakeholders are on board with the company’s goals and objectives. The focus of the company’s leadership and employees is on the following;
- Developing new products for the telecom infrastructure
- Restricting the distraction that is hindering
- Sufficient allocation of resources
In order to transform culture, Nokia promoted innovation and creativity in its workplace and encourage employees to practice it. The emphasis of the company is on collaboration, teamwork, and coordination with one another toward the resolution of complicated problems. For cultural transformation, Nokia took the following steps;
- Conducted training and learning sessions
- Developing innovation, creativity, and flexibility among employees
- Adapting the latest market trends and conditions
For Nokia’s successful transformation, the company’s leadership played a significant role. It allowed the company to successfully transition from mobile phone to telecom infrastructure manufacturing company. Some of the steps Rajeev Suri (CEO) tool are as follows;
- Gave clear direction and guidance
- Led the company in the difficult and challenging time
After the successful transformation, the focus of Nokia is to achieve continuous improvement and operational efficiency and effectiveness. Cost reduction allowed Nokia to improve its profitability and gain a competitive edge in the market. In order to achieve operational excellence, the focus of the company is on the following;
- Optimization of production and manufacturing processes
- Decreasing waste
- Improving product quality
- Offering quality products at a lower cost
Conclusion: Nokia Change Management Case Study
After an in-depth study of Nokia change management case study; we have realized that Nokia has successfully transformed from one to another business. If you are learning about Nokia’s successful transformation and planning, then you should keep in mind the abovementioned factors.
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