Do you know Nokia mobile phone? Have you ever used Nokia mobile phone?
I used to use Nokia mobile phone, which was the most popular mobile phone brand at that time, when I was a high school student in 1994. But I change to use a smartphone now. When I read " Nokia to cut another 3,500 jobs and close a factory" on BBC online news, this news make me shock and recognized me how big of effects of business failure or mistake is.
According to " Nokia to cut another 3,500 jobs and close a factory" on BBC news website, Nokia , which is giant mobile phone company, planed to close a plant in Romania and cut 3,500 jobs in its location division by the end of 2011. The sales of the company fell and margins were squeezed in the second quarter, the firm made a net loss of 368m euros or $521m in three monthes to the end of June, 2011. And Nokia has lost competitors such as Apple's iPhone and phones using Google's Android operating system. Thus, new stategies of the firm are 1bn-euro cost-cutting program and new feature development of mobile phone by focusing on smartphones.
Nowadays, business world changes rapidly so if a company don't adapt something to meet changed customer needs , the firm will not be successful. Nokia Corporation is a Finish multinational communucations corporation and it used to be the leader of mobile phone market with a well-known slogan , Connecting People. In July 2010, Nokia reported a drop in profits by 40%, which turned into an operation loss of EUR 487 million in second quarter of 2011. In the global smartphone competition, Nokia held the third place in 2Q 2011, following Apple and Samsung. I think, one of key success factors of moblie phone business is a development of new innovation which response customer needs quickly. That is one of Nokia's mistakes
Business failures do not only affect directly to firm's net profit, but they also affect to the company stakeholder such as shareholders, employees, customers, members of company's supply chain which are supplier, distributors or members of marketing channels, and so on.
For example, when a company suffer from losses of revenues, the company will cut losses by laying off their emplyees, decreased production capacity, decreased unnecessary expenses and so on. Moreover, unseccessful business plans are causes of increased unemployment rate and decreased economy growth.
What do you think about business failures?
References
Nokia to cut another 3,500 jobs and close a factory. (2011, September 29.) BBC News. Retrieved September 29, 2011 from http://http://www.bbc.co.uk/news/business-15104959
Nokia. (2011, september 29). In Wikipedia, The Free Encyclopedia. Retrived 21.00 September 29, 2011, from http://en.wikipedia.org/wiki/Nokia
In my opinion, I'm not surprise with this news. In past, I though Nokia was a good brand and very popular in society because it was not expensive and easy to use. I've ever used Nokia phone, but now I change to ues a smartphone same you. I think Nokia's competitors have increasingly develop and Nokia has space to develop that make competitors have advantage over, so Nokia has to lose margins in the market.
ReplyDeleteWhen I was in elementary school. I've used the Nokia phone as well. I think this mobile phone is a very good brand because of its durability and longevity. Therefore, after I heard this news, I feel a little shocked. However, I would like Nokia phones are still selling in the market, although sales volume may not be as Smart Phone.
ReplyDeleteAlthough Nokia has just cooperated with Microsoft in last year in order to compete with other smartphones companies such as Apple(iPhone), Samsung, who is very successful from adapting android platform to their mobile phone, is too late? Nokia had insisted on their platform for many years until there were a lot of loss to company. I think this failure of Nokia will become the important lesson to many technology companies.
ReplyDeleteThis is a normal part of business, and the company is responsible. They made some bad decisions.
ReplyDeleteThe worst thing would be for the government to interfere to "help" them - that directly encourages inefficiency, non-competitiveness and bad business practices that lower productivity and value - disaster for a national economy, and only or short term benefit to the badly run company.
Golf,
ReplyDeleteI agree with you that even though Nokia announced a partnership with Microsoft which will mean most future Nokia smartphones will be powered by the Windows Phone 7 operating system, it's too late and difficult to compete Nokia's rivals who have strong core competencies.
Pui,
ReplyDeleteI agree to your opinion that companies have to search for customers' furure demands in advance. Actually, the businesses related to IT are now leading their customers to a exciting world. Nokia's case could be a lesson to many businesses decision makers as Golf said.
Meanwhile, not to seriously get shock on a nation because of falling down of its major company, the government should make domestic competitive conditions between same product's companies.
I agree with Sunny: the IT industry is leading us to a much more exciting world. And we're only at the beginning.
ReplyDeleteImagine what might be possible in just ten more years!
Co
ReplyDeleteCould you explain to me" Google Android operating system?"
ReplyDelete