Defensive Strategy

Nokia’s Branding Lesson

5 Sep 2013  

This week Nokia collapsed into the arms of Microsoft, selling its critical handset division to the software giant.

Nokia’s decline was stunning. The stock traded at over $40 per share in 2007. It now trades at about $5. It once had a market share of over 30%. It now has less than 4%.

This is partly a story about technology and defensive strategy; Nokia failed to respond effectively to changing technology and competitive attacks.

It is also a story about branding.




Nokia tried to play in all segments of the market. The company sold cheap, basic cellular phones and advanced high-end smart phones under the same brand. This approach worked well for a while. Eventually, however, the Nokia name lost meaning. What does the Nokia brand stand for? What does the brand mean? It isn’t clear.

In a competitive market brands have to stand for something. Being a nice brand that people like isn’t enough.

Many technology companies fall into the same trap; they use the same brand to serve everyone. This is one reason these firms tend to come and go. Technology changes over time. Brands endure. Firms that rely on technology alone often struggle to hold customers over time.

You need to build a brand that people care about. These are the brands that are unique and have meaning.

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This week I am over in Europe teaching a corporate seminar. I get back just in time to take part in a panel discussion on teaching best practices at Kellogg before heading to New York for another program.

The next session of Kellogg on Branding starts on September 29. This is a great program if you are new to brand management or if you want to refresh your skills. We have some terrific faculty in this session including Carter Cast, Greg Carpenter, Lisa Fortini-Campbell and Don Schultz. You can sign up here:

3 Responses

  1. Jyothis says:

    I feel , its after-effect of their resistance to react to new technology trends . They believed that , they are in a comfort zone of low-cost mobile business space , But rapid change in high end mobile space eventual propagated to all levels . Even though they tried a last chance come back with microsoft based phones , but magic did not happened .

  2. Nokia is to phones as Acura is to cars.
    What does the brand stand for?

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