QUESTION ONE Read the case below and answer the questions A brief history of Nokia Background of Nokia The company that eventually became Nokia was established by mining engineer Fredrik Idestam as a paper mill in Finland during $1865.$ The name Nokia was born due to the location of the second mill, which was set up on the banks of the Nokianvirta river during $1871.$Soon the company diversified into electricity generation and later three companies Finnish Rubber Works, Finnish Cable Works and Nokia merged. Thus Nokia Corporation was born in $1967.$ Diversification and Expansion of Nokia Nokia Corporation back then focused on paper, electronics, rubber, and cable. It produced toilet papers, rubber footwear, TVs$,$ communication cables, etc. The company even constructed its own power plants. Appointment of CEO, Kari Kairamo, in $1975$ played a significant role in the expansion of the company. Soon the company expanded in Sweden, Norway, and Denmark, and then moving gradually into the rest of Europe. The company improved its product line, established a reputation for quality, and adjusted its production capacity. In $1979$ Nokia took its first step into the telephone by creating Mobira Oy in a JV with Finnish TV maker Salora, and they created the Nordic Mobile Telephone $($NMT$)$ service. This was the world$$s first international cellular network and in the $80$s Nokia launched its first car phone called the Mobira Senator. Nokia DX$200,$ the company first digital telephone switch was introduced in $1982.$ Nokia also started producing personal computers in the $1980$s but it didn$$t go well. In late $1984$ Nokia acquired Salora, the largest color television manufacturer in Scandinavia, and Luxor, the Swedish state$-$owned electronics and computer firm. Salora and Luxor combined into a single division and concentrated on stylish consumer electronic products. It also succeeded in satellite and digital television technology. Meanwhile, Nokia manufactured items for Hitachi in France, Ericsson in Sweden, Northern Telecom in Canada, and Granada and IBM in Britain. In spite of these efforts, Nokia$$s profits continued to decline in $1989$ and $1990,$ culminating in a loss of $$102$ million in $1991.$ Focus on the telecommunications market In $1990$s$,$ Nokia$$s top leadership decided to focus solely on the telecommunications market, and as a result, the company$$s data, power, television, tire, and cable units were sold off in the first few years of the decade. This starts the glory days for the company. Early Success of Nokia In $1992,$ the company$$s first hand$-$held GSM phone Nokia $1011$ was launched and reportedly it had a talk time of $90$ minutes and could store $99$ contact numbers. In $1994,$ Nokia launched $2100$ with the now iconic Nokia ringtone. This was such a big hit that it went on to sell more than $20$ million handsets worldwide, much higher than what the company had predicted. Nokia Communicator was launched in $1997$ which offered features like email, fax, calendar, and a massive display. The same year, Nokia also launched the $6110$ and the $5110$ two more devices, which were way ahead of their time and competition. These devices offered a much sleeker way of text messaging, a beautiful menu system customization options like multiple color snap$-$on covers. These devices were followed by the $7110,$ which offered basic web functions, the $7650,$ with a built$-$in camera and the $6650,$ the company$$s first $3$G enabled smartphone. By late $1990$s Nokia was able to establish itself as a global leader. Whereas on the other hand its rivals Siemens, Apple and Sony were still unable to predict customer requirement and were far behind Nokia. Nokia smoothly moved through these years with a turnover that increased $500$ percent from $ $8\mathrm{.}9$ billion to $$42\mathrm{.}8$ billion. Early hiccups of Nokia Nokia received many hiccups after $2000.$ The first hiccup came in $2001,$ when Nokia profit dropped after being top mobile phone maker in the world. Around the year $2000,$ Nokia occupied $30\%$ market share of phone double then of its competitor Motorola. At that time, Nokia was a big giant in the mobile manufacture market, so it was obvious that Nokia was arrogant about its product. Nokia ignored retailer and distributor because it thought that Nokia did not require them to sell their phones and this has also impacted Nokia Failure. Nokia also ignored the consumer feedback and customer taste and preference was also changing. But Nokia being Nokia thought that their hardware was best and no one would be able to compete with them. Nokia Failure On June $29,2007,$ Steve Jobs announced that Apple will be launching its own series of smartphones called iphone $1$ which changed the mobile ecosystem forever. While Nokia was busy in making features phone Apple had announced smartphones. Google also developed Android in $2008$ and other competitors such as Samsung, Gionee, Huawei, and HTE joined android and started making smartphones. Nokia was too big to adapt to sudden change. So it placed its faith on its hardware to make an impact on the market which starts Nokia failure. But customers shifted fast from Nokia to other smartphones. After being on top mobile seller in $2008,$ Nokia faced huge decline in $2009$ itself. But Nokia stuck to its operating system Symbian despite the growing popularity of android and ios. Symbian could not compete with ios and android in operating system. In $2010$ Nokia hired Stephen Elop as the CEO of the company to change its fortunes. Stephen was working in Microsoft and Nokia had to pay compensation to the previous employer to bring him on board. He was a CEO with high competence but low character. In his speech after joining Nokia he said Nokia was like a burning platform. Either they had to jump in the water or put off the fire to save them. He decided to opt for blue ocean strategy. Nokia decided to join hands with Microsoft for operating system and produce hardware by itself. The window was not compatible for mobile devices. Despite knowing the need of the hour was android for Nokia, Stephen decided to go the Microsoft. He had good relations with then Microsoft CEO Steve Ballmer and he was hoping to replace Steve as CEO of Microsoft. So the tie up between Microsoft and Nokia was necessary for Stephen Elop but not for Nokia. Elop was Trojan horse for Nokia. Nokia failure was attributed to the wrong decision made by the company. People think Nokia failed because it did not change which is not true at all. Nokia changed but every change was opposite of what android and ios were doing. Once a company of $$250$ billion at its peak, it was sold to Microsoft for $$7\mathrm{.}2$ billion in $2014$ marking the end of an era of mobile phone giant. Required A$)$Summarize the above case in two paragraphs $(5$ Marks$)$ B$)$As a strategist, discuss the major lessons learnt from this case. $(10$ Marks$)$