Nokia’s Road blocks

IIPM BEST B-SCHOOL

There are plenty of reasons. The two most important ones are: A perception that while Nokia is all about connecting people, it is getting disconnected from upwardly mobile young consumers. Globally, Nokia seems to have paid a price for complacency when its market share dropped from 35% in 2003 to a little less than 30% by early 2005. Its initial reluctance to introduce clamshell (folding) models paved the way for LG and Samsung, who have cashed-in well on their popularity in the Asian continent. Long standing players like Motorola and new entrants like LG aggressively marketed themselves as brands that are funkier and technologically ‘with it’. “An even bigger problem confronting Nokia is the issue of after sales service”. Vijay Nair, a Senior Associate with a legal service firm has a scathing comment: “The only danger I see Nokia facing from rivals is at the level of after sales service. In Delhi, at least, the tie-up with HCL for after sales service is proving negative as the HCL employees are incompetent and discourteous to the customers”. Mr. Gogia, who has just ended his seven year association with Nokia as a Priority Dealer on a bitter note, shares the same view. His Nokia dealership is in the up market locality of South Extension, New Delhi has seen the Finnish giant in both its “gray and hay” days. According to him, Nokia has not been able to differentiate between a Priority Dealer and a roadside store that could also stock Nokia phones.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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