Nokia is planning to lay off almost 30,000 employees in the next year. They are closing plants, consolidating their services, and their stocks have plummeted some 15% in the past three days. Things do not look good for Nokia, but it is unlikely that the fault falls to the current CEO. A series of unfortunate events have caused the slow demise of companies like Nokia and RIM. The only good that comes out of this situation is that other companies can learn something from their mistakes. So where was the biggest mistake? Where could they have improved before it was too late to do so?
They Ignored the U.S. Market
When Nokia was still going strong in other countries, the company didn’t want to make custom phone designed for its American base. This meant that a lot of local carriers didn’t really want to do business with them because they wouldn’t adapt to what their customers wanted like other phone companies. Companies like Motorola bent over backwards to deliver, and today they thrive because of it.
Instead of stepping up to the plate, Nokia became a company that had a lot of loyal fans. They even went as far as to set up their own Nokia shops to sell handsets directly to consumers, and many people weren’t willing to pay the unsubsidized prices on their phones.
Nokia left a market that could have made them billions to other companies. They refused to adapt. When you provide excellent customer service, respond to feedback, and realize that you’re 100% replaceable at any time, then you’re on the right track to successfully growing your fan base.
They Failed to See the Danger of Apple
When the iPhone hit the market, it completely changed everything. The iPhone did all kinds of things that no one had even attempted to do with a phone, and because of that, expectations of smartphones (and phones in general) changed rapidly. Now, the market demanded a phone that could text, talk, browse the internet, hang out on Facebook and still fit into your pocket all at the same time.
The introduction of the iPhone blindsided many phone companies, but it took Nokia the longest to react. It was still the leader in smartphones – until Apple dropped the price of the iPhone to $200. Instead of seeing their loss of power, Nokia continued on.
Instead of ignoring your competitors, look to see what they’re doing that’s successful. You can even be friends with another company if it helps you gain insight on what they do that you don’t, and how you can improve your own company.
