The decision-making process is something we all have to deal with on a daily basis. From childhood to adolescence and teenhood, and finally to youth. It does not end there because it is a lifelong process that we must engage in every day. Leaders in many walks of life encounter situations that necessitate decisions, from CEOs to managers to elected officials. In this document, we will discuss corporate decision making. Making decisions is an important component of running a business. CEOs, managers, supervisors and even small business owners are required to make decisions every day, which in the long run affects their businesses, either in a positive or negative way. Sometimes a company is even required to make a decision that will, in the end, determine their future, if they will still be in business or not, if they will still be profitable or not, etc. decision made can be based on several factors including customer feedback, employee input, online surveys and also technological change. Here we will focus on a corporate decision, a decision made by a company, and in this case, Nokia.
Nokia’s decision to start producing Android devices
Towards the end of the year 2016, Nokia decided to adopt the Android software and announced that their first device to be launched in February 2017. HMD Global was the company that given the patent to develop the android phones of the fallen giant. The three pioneering phones were unveiled in January and February 2017 by HMD Global, designed to enter the mid-range market of the Android mobile phones devices. The three phones were presented and implemented the Android OS in the purest form (Warren, 2017). They have no User Interface customization, no third-party applications, and security updates. The main decision made here was that Nokia decided to venture into the Android devices business, a venture which they had declined to take part in during the time which they were supposed to.
Why the decision was made
Nokia is a company that started way back in 1871 (ITIF, 2015) as a company manufacturing rubber boots. It evolved to a technological company, and in the period around 2000 (mid and late), Nokia was the world’s major mobile phone manufacturing company. By mid-2000s, it was producing more than half the worlds consumed mobile phones. During the smartphone revolution, Nokia failed to shift to the new version of the software, “Android,” leaving the software to Google, Samsung, and the Apple’s iOS. Nokia maintained its target to hardware leaving the software business to its competitors.
They based their analogy to a “phone-first” system whose adaptation was derailed since it failed to combine all the three components; applications, operating systems, and hardware. Nokia was the first company to bring into the world the innovations in mobile development such as wireless charging, Wi-Fi and touchscreen features (ITIF, 2015). The main failure in operation was the integration of customer experiences into their designs, which led to losing customers to their competitors at a very high rate. Their main focus was on their brand and customizations.
This mode of operation also affected Nokia’s mode of doing business. Their operating system (Symbian) was the main software running on their devices, which was later outshined by Apple’s iOS and Android from Google. The two powerful operating systems attracted more customers, investors, and developers leaving Nokia on the verge of collapsing. Nokia made mistakes in their business model, they ignored the competitive challenge that the new operating systems posed, they only focused on selling devices, unlike their competitors who also targeted services such as selling books and music, and they also lacked strategic planning on where to concentrate their efforts on a market (ITIF, 2015).
These challenges resulted in desperate moves to salvage what they could from the little remaining market share. In the year 2013, Nokia sold their business side that was involved in handset manufacturing to Microsoft (Surowiecki, 2013). This was a clear demonstration of how bad Nokia was succumbing to losses made by simple mistakes such as refusing to switch to the new way of doing a thing, when they declined the chance to use the Android operating system. A few years back, from the selling date, it was the world’s major mobile phone manufacturer but here it was, selling their rights of manufacturing to another company. In the current market, Nokia has less than 3% of market share in the mobile phone industry.
Before the introduction of iOS and Android operating systems, it was a company that was well adapting to changes in technology, that it even designed and manufactured the first smartphone in the year 1996. It was due to mistakes that the company was being punished severely, by the ever unfair environment of consumers.
The Decision
“Change is inevitable,” as the saying goes. After years of Android and iOS devices dominating the market, the mobile phone industry was changed drastically. Several companies which never evolved with the change were crashed in the process and those that evolved stayed afloat. Nokia was one of the companies thrashed.
The decision to switch to the Android side of life was motivated by the fact that Android operating system was changing and still is changing the mobile phone world. It is so clear that the two giants are controlling the industry area android and iOS. Though Windows phones have been on the market, there was no way that they could compete with the two giants. Elop, the then CEO of Nokia, stated that his reason for choosing Windows was that, he wanted Nokia phones to be different from their competitors’ brands. Little did he know that he was making the biggest mistake of his life? The Windows phones resulted in being a flop, and the company lost a lot of its market shares. This later resulted in Nokia selling the division of mobile devices to Microsoft. According to the agreement, Nokia was granted permission to sell their mobile phones with their brand up to the winding up of the year 2016. HMD Global was after that licensed to produce Nokia mobile phones, a company that is still doing that up to date.
It was at this point that the venture into the Android devices was reached upon, and the production started, with the first Android device from Nokia being released on January 2017 (Warren, 2017). This is a decision that might save the company a great deal from the verge of collapsing. The Android market has a lot to offer, and this might be the solution to salvage the falling giant. It has attracted a lot of users, developers, and investors alike, with users increasing every single day. It is currently regarded as the undisputed mobile operating system with millions of users. The content is also overwhelming, with content creators increasing every day too. Nokia as a company, also still has a reputable market base in Asia, especially in India which would result in greater sales for the company.
Nokia as a company has a reputation of having tough and durable handsets in hardware design (Shaik, 2013). A reputation like this will give the company an upper hand after launching their android versions of mobile devices. Currently, the Chinese devices occupy a good market share, being from local manufacturers, they are of low quality when it comes to hardware, and Nokia can take advantage of this with their sturdy hardware designs. The market is set and readily awaiting the presence of a renowned and reputable company like Nokia because of its quality (Shaik, 2013).
The decision to start producing the android devices was the best decision to be made by Nokia as a company. From the history of its operation, the company failed when it stuck to its business model in mid-2000s and had experienced very difficult times for more than ten years. The android market having many users, investors and developers will give the company a greater market to deliver their devices to, and a better platform to compete with their counterparts. In the years to come, Nokia might be one of the best mobile devices manufacturers, because it is no doubt that they will give one of the best hardware devices in the market.
Conclusion
If the decision could have come earlier, the company would have saved itself from losing billions, and as this document is prepared, Nokia could be on its way up the ladder already. But all is not lost as their entry into the android market is still on time. Other companies need to learn from the Nokia example that technological change can easily render products or services of a company irrelevant and that change has to be embraced, and embraced fast.
References
ITIF. (2015). Apple and Nokia: The Transformation from Products to Services. Retrieved from ITIF: www2.itif.org/2015-transformation-products-services.pdf
Shaik, A. (2013, August 1). Would Switching To Android Be Better Choice For Nokia? Retrieved from Infini Geek: http://infinigeek.com/would-switching-to-android-be-better-choice-for-nokia/
Surowiecki, J. (2013, September 3). Where Nokia Went Wrong. Retrieved from The New Yorker: https://www.newyorker.com/business/currency/where-nokia-went-wrong
Warren, T. (2017, February 26). Nokia is back from the dead with a trio of pure Android phones. Retrieved from The Verge: https://www.theverge.com/2017/2/26/14741504/nokia-6-nokia-5-nokia-3-android-phones-mwc-2017
