The Nokia Story: From Dominance to Disruption

From the late 1980s to the mid-2000s, Nokia was a high-performing innovation machine, the leading manufacturer of mobile phones, and a pioneer of handset technology and functionality. In 2008, it was the world’s largest manufacturer of mobile phones with a 40% market share. Thereafter it suffered a sharp decline that saw its capitalization collapse from US$156 billion in October 2007 to US$7.5 billion in June 2012. Few people - least of all the insiders at Nokia - saw that coming. The case details the confluence of factors that led to this outcome, and underscores how even the most successful company can falter when they fail to recognize and act on changes in the operating landscape and consumer needs.

Nokia offers an illustration of Joshua Gans definition of disruption – what happens to a firm when the choices that once drove its success now become those that destroy its future. It chronicles the Nokia journey from late 1980 to mid-2012 to show that successful firms that are disrupted are not complacent or poorly managed. Instead, they choose to continue on the path that brought them to success - and it is because of this that they get disrupted.
The article is used as pre-reading for teaching modules based on The Phoenix Encounter Method.