Wednesday, April 16, 2014

How much time does it take for a pioneer in the industry to vanish off the industry ?


The article “Innovators Dilemma” tells us about how even the best companies in an industry can succumb to pressure before finally giving in. I wanted to go in more detail about Nokia, which to all of us a couple of years back was the first thing that struck when we used to think Mobile phones. But when the smartphone market started catching up, Nokia’s market share was diminishing in a big way. Now what can be the reason for this?

We can relate this to our article which goes in depth to find out the root cause on how an organization can fail in a fast growing industry. There are two types of technologies namely sustainable and disruptive. Sustaining technologies improve the performance of established products whereas disruptive technologies bring a very different value proposition to the market. For any organization to survive, especially, in a fast moving industry such as the telecom industry where there are rapid advancements of technology every day the company needs to adopt to change and plan in an appropriate manner. For instance, when Apple first came up with the iPhone back in 2007 which had the touch technology, Nokia still went bragging about their E-Series, by when the definition of smart phones had changed drastically. This was least expected from a pioneer in the telecom industry.

Impact of Apple and Samsung:

iPhone however did not have a significant impact on Nokia’s growth but it still gave a heads-up. Samsung, which experimented with off the shelf technologies or disruptive technologies as the innovators dilemma says, and managed to capture the smartphone market in a much faster way. Nokia failed to anticipate, understand or organize itself to deal with the changing times.
Google’s Android and its open source platform played a very important role in this. Android was an upcoming operating system and was targeted for the mobile platform, Samsung adopted it and it became popular immediately among all the smartphone users and they started purchasing Samsung handsets. Nokia while still using the Symbian OS was slowly losing its market share before they completely lost the battle.

In my opinion, Nokia should focus more the emerging markets and do a proper customer research before they roll out a product. Without a doubt, Nokia must be more proactive towards adopting new and emerging technology. Since today's mobile users are flooded with Samsung and Apple, Nokia must formulate a strategy which can put them back in the map.

The bottom line

In a fast moving industry, it is very important for companies to plan well in advance and be proactive to do market research and understand their customer needs. Many companies fail to realize this and use the same formula that they have been using. No matter how successful a strategy is or would have been, In the end it all boils down to the customer needs at that particular moment in time. Nokia has served as a classic example for this failure. But are there many companies out there which are on the verge of going through the same phase as Nokia? How can companies combat this in a more efficient manner? And the most important one being will Nokia come back and gain its original market share with the Microsoft Acquisition?


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