Nokia should have known about OODA Loops

If it wasn’t already clear, Nokia is in crisis. While, sales and shipements of smartphones are growing in absolute numbers, they are losing market share fast. Nokia is paying a high price for not paying enough attention to smart phones and the US market which is know the center of the mobile industry.

Nokia’s strategy of producing simple and solid hand sets and being big in Europe and emerging markets, is based on a flawed assumption of adoption curves. It seems to reveal a very linear way of thinking: If we get to be people’s first phone, we will eventually be able to sell them smart phones. However, phone sales are very much driven by carriers and which phones they choose to subsidize and additionally consumers are not particularly brand loyal. This part of Nokia’s business is extremely high volumes and low margins and as their new CEO mentioned in the famous memo, Nokia still haven’t responded successfully to neither Apple or Android products.

Many observers have already called out microsoft as the big winner of the partnership and it remain to be seen whether Microsoft/Nokia can butt heads with Apple, Android and RIM. Nokia has made a very big bet in partnering with Microsoft and essentially letting them control what might be the core to their future competitive advantage.

However, before it ever got so bad for Nokia, they should have known about OODA Loops. I have written about OODA Loops before, and what is puzzling is how Nokia has failed to go through their OODA Loops at a pace anywhere close to their competitors. As the mobile industry increasingly centres on eco-systems of developers and apps and software, Nokia should have realised that making developers happy and giving them and opportunity to succeed should be their first priority. This is a significant shift from being a “hardware-first” company, and clearly Nokia has so far not been able to reorient their strategy according to their customers who are flocking to their competitors.

As Scandinavian and for the sake of the European tech industry I really hope Nokia pulls it off. But their struggles are  an illustrative example of how a lack of agility is deadly to companies, regardless of their size.

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Posted: februar 17th, 2011
Categories: Europe, telecom
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