How imaginary crocodiles could have saved Nokia
Why dominance means nothing if you stop delivering.
Zeitgeist reported recently on the number of high street names issuing profits warnings after an icy December kept shoppers away from their tills.
The encroachment from online retailers onto traditional bricks and mortar stores is only going to increase as once dominant names slowly diminish into also rans, punished by their failure to adapt to progress.
While such a destiny is unfortunate for a lumbering organisation with a physical and costly infrastructure to maintain, for what should be a cutting edge technology company it is unforgivable.
A mere ten years ago, Finnish communications company Nokia dominated the mobile phone market. This rather quaint BBC story from from a decade ago reports that ‘Nokia has strengthened its grip on the world’s mobile phone handset market’ and that ‘for the first time, Nokia has a market share more than double that of its nearest competitor’.
The report concludes with a prediction from Forrester who anticipated that ‘five dominant players would control Europe’s networks by 2015’.
While that prediction may come true, it is questionable whether any of the dominant manufacturers from yesteryear will be among them.
This week’s ‘leaked’ memo from Nokia’s CEO Stephen Elop claimed that the company was ‘standing on a burning platform’ and surrounded by a ‘blazing fire’.
This is not a pleasant place to be. As mobile phones became smartphones an ever increasing importance was placed upon a phones operating system, both in terms of functionality and usability.
Just as the old high street stores threw up websites that weren’t quite as good as the dedicated online retailers Nokia produced Symbian, an operating system that failed to impress anywhere near as much as the ones you’d find on an Apple, Blackberry or Android phone.
Elop’s acknowledgement of the problem has opened the door for a radical change in strategy to try and rescue the problem.
Rumours abound of a partnership with an existing platform.
“It could either be a very bad marriage or a marriage of two players that have not been very effective alone.” commented Magnus Rehle of Greenwich Consulting.
The two likely candidates are Android, which would essentially relegate Nokia to a manufacturer in competition with other Android handset makers, or Microsoft who have also struggled to ship as many copies of their Window Phone 7 operating system as had been hoped.
The former would be a rather bitter pill for a once dominant giant.
The latter, and arguably preferable option, would bring together two massive organisations who have struggled to assert their dominance in the category.
An announcement is imminent, though as Hakim Kriout of Grigsby & Associates points out ‘Very few companies regain their leadership once they’ve lost it.’
Whichever route Nokia go down the lesson is there for brands in every category.
It is infinitely preferable to stay top of the pile than to have to climb back up after a fall.
Regardless of your current dominance, if you fail to keep up with what people want and expect from you, someone else will deliver it and take your crown before you’ve admitted there is a problem. Brands must avoid the complacency that dominance can bring.
If brands assumed that they were surrounded by crocodiles and stayed alert to change and ready to react, they’d be much more likely to avoid getting trapped by ‘blazing fires’.