Nokia is consigned to becoming a minor player


It has become increasingly hard to see how the once-mighty Nokia can ever regain its formidable status. For a company that once dominated the handset market, its first-quarter results and the planned cuts in operating expenses seem to condemn the company to a slow decline over the next two to three years into a faint shadow of its former glory.

The company has failed on so many fronts that only its low-end products are seemingly saving it from complete annihilation.

What happened to cause such a hugely successful company to fail will, I'm sure, be analysed by many aspiring business graduates and industry experts alike. But there is no simple answer to this debacle.

Having spoken to a number of ex-Nokia execs, one common factor seemed to be corporate indigestion. The head offices of Nokia, according to these former insiders, became increasingly entangled with numerous committees and action groups that awaited direction from higher executive boards. The result from this 'deadly embrace' was appallingly slow decision-making, with compromised products and services designed more to settle internal disputes rather then consumer needs.

This atmosphere was also infused with a healthy dose of arrogance that Nokia could do no wrong. It was in charge of the handset agenda, not upstarts from the US or Asia.

This particular trait had been evident within the company for some years. Speaking off-the-record to a former operator CEO, who has since retired, he vented his anger at being treated very poorly, having been informed which Nokia handset he could buy, how many he could purchase, and when they might be delivered.

This happened at a time when Nokia handsets were in high demand, so the CEO was forced to bow before the mighty vendor and accept what he was told. But the resentment was huge, and long-lasting.

The level of success achieved by Nokia was phenomenal, but not unique in the business world. Other firms in the IT industry have achieved dominant positions where they too adopted over-confident mindsets.

Few of these survive today, and those that do are very different--and smaller--animals than they were.--Paul

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