The Rise and Fall of Nokia: An Important Lesson

Abstract

Nokia’s failure to follow the market trend towards the end of the 2000s was the final nail in the coffin for this company. They were unable to maintain their lead until they were left out of the competition in the smartphone industry. This paper examines the contributing factors to Nokia’s rise and fall and attempts to assess the internal and external threats that constrained Nokia’s progress in the industry using the Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis and Porter’s Five Force Model External Analysis from 2005 until 2014. There has already been vast research carried out regarding Nokia, resulting in a voluminous body of literature about this topic. To make this study different from the existing study, an analysis based on the two different models as guidelines, supp orted by previous literature. In SWOT Analysis, the outcome shows there was a greater preference for Weaknesses and Threats faced by Nokia compared to Strengths and Opportunities. Porter’s Five Force Model External Analysis indicates that Nokia faced no is sues except for the threat of entry. The rest of the components, namely, the bargaining power of buyers, the threat of substitute products, the bargaining power of suppliers, and industry competitors’ rivalry among existing firms, did not show any severe t hreat to Nokia. Limitations and future research recommendations are also discussed in the paper.