Nokia - Fostering Innovation

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Case Details:

Case Code : HROB023
Case Length : 14 Pages
Period : 1997 - 2002
Pub Date : 2003
Teaching Note : Available
Organization : Nokia
Industry : Mobile Telecommunication
Countries : Finland

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"Our approach is to create classic, timeless designs that combine ergonomics with aesthetics. Shapes, colors and contours that can deliver harmony, balance and beauty."

-Jorma Ollila, Chairman and CEO, Nokia Corporation.

"When an artist is really excited and does a sculpture day and night, then he is energized by it, because its in his hands and he owns it. This is how you get art. Our artists aren't just closing their eyes and waiting until the innovation comes. We are innovating all the time."

-Yrjo Neuvo, Head of R&D at Nokia.

Yet Another Innovation at Nokia...

Hollywood stars, pop singers, business tycoons and the super rich now have a new luxury toy, courtesy Nokia Corporation (Nokia). In January 2002, Vertu, a subsidiary of Nokia, entered the premium end of mobile phone market with a jewel encrusted, platinum finished instrument that had a sapphire crystal screen and ruby bearings.

Nokia, which had so far concentrated primarily on the mass market, entered the luxury phone segment, with the aim of converting the mobile phone into a status symbol and a mode of self-expression. By 2002, Nokia had emerged as the strongest brand in the mobile handset industry and was able to hold its own against companies like Motorola, Sony-Ericsson, Samsung, Siemens, etc.

It had a market share of about 36%, which was much larger than that of its competitors (Refer Exhibit I.) The company offered a comprehensive portfolio of products covering all segments of consumers. In 2002, Nokia introduced about 33 new devices around the world (Refer Exhibit II for some of the devices.)

These included a number of new handsets as well as a messaging device and a gaming model. According to analysts, Nokia served as the industry model for aggressively and effectively segmenting the mobile phone market and developing a number of products for segments.

Nokia was able to achieve market leadership because of its constant efforts towards developing a corporate culture, which fostered innovation. Nokia gave a lot of importance to innovation and creativity and made a conscious effort to create and maintain a culture which focused on diversity and the benefits that accrued from it.

All the policies of the company aimed at creating, what the company called, "an inclusive environment," i.e. a culture which seeks to uphold and benefit from diversity. The R&D system was also an open one where any idea, no matter how absurd it sounded initially, was given due consideration. A number of such absurd sounding ideas later emerged as star products or features in the Nokia line-up. Nokia's culture was responsible for the number of 'firsts' it had to its credit (Refer Exhibit III.)

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