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Nokia and The Ford Company
  • Nokia And The Ford Company  20 comments
    Feb 15, 2013 2:42 AM | about stocks: NOK, F

    Is Nokia using Henry Ford's strategy? It makes one think.

    It was Nokia's VP of Design Marko Ahtisaari description of the re-invention of the wheel attracted me with the idea. He had stated numerous times in interviews that innovation in the phone industry has just began. Reminding everyone that it took 15 years for the automobile industry to standardize on the steering wheel as the dominant interface.

    I believe there are great similarities between Ford's and Nokia's plight to victory. I am not referring to the Ford Company of today, but the year Ford incorporated the "Ford Motor Company" in 1903. Ford proclaimed, "I will build a car for the great multitude." He did so in 1908 offering the Model T for $950. In the Model T's nineteen years of production, its price dropped as low as $280. With Ford providing such discounted prices, 15.5 million Model T's were sold in the United States alone. Production of the Model T was the beginning of the Motor Age. It evolved from a luxury item for the well-to-do to essential transportation for the ordinary man.

    Henry Ford also revolutionized car manufacturing by the use of an assembly line. In 1914, a Ford Motor plant in Michigan applied a new innovative technique which enable them to turn out a new car chassis every 93 minutes. Using a constant moving assembly line led to huge gains of productivity. Now with Ford's triumphant strategy to provide affordable automobiles for the masses, all of who was part of his vision came out prosperous. Ford Motor Company was literally "Connecting People"

    Ford's Model T altered the American society. The United States suburbia was growing rapidly with the creation of national highway that ultimately lead to a high demand for cars. The U.S. population was entrance with the possibility of going anywhere anytime, similar on how NSN is creating numerous innovative infrastructure highways in the world.

    The Nokia Strategy:

    "We are increasing our focus on the products and services that our consumers value most while continuing to invest in the innovation that has always defined Nokia. We intend to pursue an even more focused effort on Lumia, continued innovation around our feature phones, while placing increased emphasis on our location-based services. However, we must re-shape our operating model and ensure that we create a structure that can support our competitive ambitions."

    Stephen Elop, CEO

    In conclusion

    Nokia finally realized winning becomes no longer a matter of getting "there way" (arrogance), or persuading someone to do what they want them to do, it becomes a way of achieving what's best for all.

    Disclosure: I am long NOK.

    Stocks: NOK, F
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Comments (20)
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  • From our recent conference paper regarding design, marketing and the emerging prosumer: "The future success of commercial endeavours will no longer be determined by finding ways to make people do what businesses want - it will depend on enabling people to do what they like."


    Whether Nokia has understood that new paradigm powering many businesses already very successfully, is not clear to me. Their 3D printing foray, although only a marketing trick, is pointing in the right direction.
    15 Feb 2013, 03:48 AM Reply Like
  • Author’s reply » The graphene material also in Nokia's pipeline which can can be applied to 3d phone chassis printing . Henry Ford had the patent on the first plastic automobile which was 30% lighter than metal built.


    I'm not really sure Nokia device knows different avenues to increase business productivity, but I believe NSN will be a big player in that category. NOKIA hardware seems to be targeting individual customer preference globally at the moment through telecos partnerships. Although with MSFT OS ecosystem, a lot can happen in the future. WP8 experienced 100% growth from 2011-12 a small gain of 1.8 to 3%. Compared to others (% wise) its a big jump. :)
    15 Feb 2013, 04:33 AM Reply Like
  • Author’s reply » System? Are you referring to build-a-bear approach, I don't know anyone else ready for that type of consumer satisfaction, especially the younger generation. The fast food generation, with instant gratification mentality, or just plain lazy kids. Not to many people in the U.S. are introverted thinkers, most fall into the herd mentality.


    Maybe one of the main reason U.S. Consumers are taking so long to catch the Nokia fever again due to they're affinity with Apple and Samsung. I'm the only one in my circle who owns a 920. :(
    15 Feb 2013, 04:45 AM Reply Like
  • I know graphene through material research. This is way off into the future, just as performance 3D printing with quality finishes is. It will not be a catalyst for Nokia's performance for years to come.


    Like last year, the number one conundrum to solve is the Windows association. If Nokia and Microsoft, or whoever consults them, manages to dissociate consumers from negative Windows related associations that are still prevalent, whether we like it or not, different topic, then device uptake will grow much faster. The core Nokia brand has lost much traction, but is still intact as far as its values are concerned. Consumers have difficulty to associate that northern otherness with mainstream Windows/work connotations.
    15 Feb 2013, 05:47 AM Reply Like
  • I'm not necessarily referring to mass-customisation or production on demand; overall, consumers are lazy and rather attach to the idea to become prosumers, rather than actually becoming some.


    I do not know much about the U.S. apart from certain consumer strata on the west and east coast that are, as other trends show, very willing to take to their own devices and build things, hack things or modify what's fed to them to their own liking. In Europe, also due to long term economic issues for the majority, the DIY ethos has grown steadily over the last decade, and many are willing to spend more and more time to create things or at least become involved. Primarily participating online, but also offline. In general, big brands, big structures, big pictures are very much under consumer scrutiny and a new desire for re-localisation of production and consumption is measurable.


    Letting people do what they like should not be understood as an imperative to facilitate personal production, but to allow - to concede brand value - to take on a product or service and make it one's own through material or immaterial actions.
    15 Feb 2013, 05:53 AM Reply Like
  • Author’s reply » I don't understand why MSFT leaves such a sour taste in the U.S.. MSFT is a big part of the American computing systems and resources if they like it or not. The only valid reason why people despise MSFT because of the gigantic presence they have here, which automatically labels them as sell out's. I will never understand that motive of thinking. People here are not easily satisfied even it brings conveniences to their lives and always looking for new and innovative product not in the norm. Which leads to your comment "manages to dissociate consumers from negative Windows related associations that are still prevalent" it makes total sense. Nokia with its new fresh look and specs still gets frown upon here due to their association with MSFT. A catalyst is needed to remind these folks how Nokia was in the past. The problem with that marketing strategy, as being humans, we easily forget.


    We are talking about mobile phones, still in the lines momentary joy other than functionality for the herd, as being replaceable. I do believe in the story, the global story.
    15 Feb 2013, 06:28 AM Reply Like
  • In some cases, it worked. Look at the entire Swiss watch industry that was practically dead in the late 80s. Hi, mid and low price tier were nearly completely destroyed. They resurged on clever innovation for all (Swatch) and heritage for an elite (Omega). A typical dichotomy approach, you can read about it in Hayek's writings. Today, it is again a flourishing industry with a global presence and perfect mindshare. And that, even if people look up time on their mobile devices more than ever.


    Although I don't read Gartner or GfK data on the U.S. I would say, again, that Microsoft from their humble beginnings onwards, was a linear success story and hence became boring, like a football team that always wins. With brilliant players bought from unfathomably big coffers. Microsoft became ubiquitous, it became a synonym for "work". And, for most white collar workers, work is not fulfilling. Work is a necessity, 9-5, day in, day out, year after year, greeted every morning by that logo. Microsoft eventually became like that uncle that nobody likes to have around at family events. Apple instead associated itself with the creative class, failed, resurged, failed again in the Sculley years, resurged again under Jobs' captainship. Apple had drama, an ousted CEO, brought back, falling fatally ill, looking like an emaciated monk with the strongest of all visions. He iconified the brand. Apple, just because of their corporate history, became like a surfer that tried the most spectacular waves, failed, won, failed again - but never gave up trying. People take heart to sublime storytelling. Apple, from the iPod onwards, disassociated itself from work. Consequently, they dropped "computer" from their incorporated name. In short, Microsoft has no drama, Microsoft just works. And that is not enough by today's standards, no matter how clever and well designed their current offerings are.
    15 Feb 2013, 06:55 AM Reply Like
  • Author’s reply » Fantastic explanation! Although as boring as they are, sandy bottom beaches do get rouges waves at times :)
    15 Feb 2013, 07:25 AM Reply Like
  • The two articles I linked yesterday confronted the Nokia/Microsoft issue very well. Nokia needs desperately to win back mindshare. Their designs are perfect beyond doubt. Technology dito. Price-point diversification dito. International presence dito.


    But what do consumers see on Nokia's screens? Microsoft's WP8. Here also, the design is good. It is different. Visually uncluttered. Bold and glanceable. Quite the contrast to Android's visual mess that was inspired by Apple's iconography from a decade ago. Lackberry has made it even worse; you need to spend time actually reading what's on screen. But Microsoft has neither finished nor polished WP8, documented well in the linked articles. And this issue is ultimately not under Nokia's control, no matter how many angry e-mails and phone calls might be exchanged. Microsoft seems to be stuck in their "customers will inevitably have to come to us" mentality. Even if consumers are no prosumers yet, they are right in demanding a polished, functional and fluid experience. Today, more than ever before, the customer is always right. If she feels she is not being addressed as an individual - she shops elsewhere :)
    15 Feb 2013, 06:20 AM Reply Like
  • @system,
    I worked 70 hours per week putting myself through 7 years of college. I worked at a large grocery store. The number one rule we were taught was "the customer is always right". Why?


    - First and foremost was to make the customer feel they were the boss AND in control (actually they are, as its their money which paid my wages)
    - Make the customer have a GOOD experience. Humans will remember bad ones and relate those experiences to others. Can crush your business, especially in the social media


    I can remember listening to a customer rant about a certain product and how bad it tasted and then asked why we charged so much for it.


    Yes I could have pointed out the following:
    - There are other similar products on the shelf to choose from.
    - If it tasted bad, why even consider buying it?
    - There are other stores that may sell it cheaper.
    - The price is set by the manufacture.
    - We dont make the product, we just sell it


    I didn't, because it would lead to confrontation and a bad user experience.


    What did I do?


    I smiled and said "I know, isn't it crazy? But some people like that stuff."


    No matter what the customer said, I agreed with them. Never, never disagree with a customer.
    15 Feb 2013, 12:59 PM Reply Like
  • From my perspective in branding, design, etc. it is frightening to witness that consumers that bought Nokia's new devices seem more apt at clearly explaining the many useful features, whereas providers' shop personnel seems disinterested and downright incapable; not even responsive to regular people that just walked in to buy their first smartphone. The ones I was in to see for myself usually have their staff seemingly born with a word count of one: Samsung.


    In September 2012, I was already hinting at Nokia's sub-par marketing and education execution. The usual answer given was along the lines that consumers will find out by themselves. The almost proto-communist ethos of "they will have to come to us" seems still prevalent within the organisation.


    A business that thinks it is "bestowing" devices on a willing flock of awestruck consumers is autistic. A cardinal marketing fail.


    If you're interested, flick through Marty Neumeier's "Zag: The Number One Strategy of High-performance Brands.", there are some grains of gold in it still after so many years.
    15 Feb 2013, 01:45 PM Reply Like
  • "Using a constant moving assembly line led to huge gains of productivity."


    Clearly Nokia is NOT copying Ford ;-)
    15 Feb 2013, 05:21 PM Reply Like
  • Author’s reply » If you say so Luke ;)


    Nokia is in a middle of a transition, killing off Symbian for the Asha line and manufacturing all types of Lumias. The new assmebly line is on its way, ETA 1 month and i'm sure assembly restructuring as well ;)


    Ford motors almost went bankrupt when they decided to produce only one color (black) while other manufacturers were doing multiple colors. History is cool :)
    17 Feb 2013, 11:17 PM Reply Like
  • My comment was a joke reflecting our dismay at the poor performance of the Nokia assembly line ;)
    18 Feb 2013, 02:18 PM Reply Like
  • The only assembly line I am interested in seeing come online is that ultra sensitive screen.
    18 Feb 2013, 03:20 AM Reply Like
  • Turtle, I don`t know how come I did not discover this instablog before but, in any event, here are my thoughts on Microsoft and Nokia uptake. I don`t think it is only because people dislike MSFT: it is because of timing mostly IMO.


    Smartphones exploded in 2007 once the touchscreen was shown to the world by Apple. Android followed closely behind but where was MSFT? MIA with Win Mobile and no ecosystem. It took them 4 years to launch their first Windows Phone after iPhone. In tech that is an eternity, and a large first mover advantage.


    Same goes with other screens. When W8 came out iPad was already in its 3rd gen and Android has many models as well. Huge first mover advantage again.


    To address the MSFT dislike issue, I think it does not come down to the fact it equals work. It is because MSFT is so dominant in the PC world, the virus & other hackers target them, and when so much software is available, a good portion of it is of less quality. Put those 2 things together and that equals frustration for your avg user.


    That is why Apple picked up on that and said: Apple, it just works. Oh yeah and we're cooler. I guess that's what happens when you control the design of the hardware and the software and don`t have to rely on a bunch of OEMs that compete by making the ugliest and cheapest products. It helps you get to the masses but people still want a good experience at every price point, crazy isn't it?


    It`s going to be a long, hard slog for both WP8 and W8. If they can produce enough hardware & software and spend enough on marketing, they will carve themselves a nice portion of the market.


    I still think Nokia is not producing enough variety, let alone quantity. I want a 5 inch phone damnit, and a 7 inch tablet with Windows RT, not pro.


    RT is the future as the number of apps increase, because of no fans and longer battery life. What`s the point of Surface Pro? If I want a laptop I use a laptop. If I want a tablet I don`t want to burn my legs, hear the fan and have to put it on the charger every 2-3 hours.
    23 Mar 2013, 03:23 PM Reply Like
  • Nokia is not permitted to create those type of devices, as Elop, I mean MSFT won't allow it, until Nokia has divested itself into oblivion. Into a carcass of what it was. Then MSFT will simple buy Nokia via a bailout from bankruptcy court.
    24 Mar 2013, 10:49 PM Reply Like
  • doggiecool: I think I will now start ignoring your comments as many others must want to because you no longer make any sense or bring any info to the table. All we get from you lately is spewing rage. Spend your energy on calling Nokia directly, get some answers and bring us some facts not fantasy or conspiracy theories.
    25 Mar 2013, 12:58 PM Reply Like
  • @BTR,
    here's a fact for you.
    Nokia's new mid-level cost affordable phone - the Lumia720 is now coming to the UK!!!!! But sadly its going to be another FN exclusive. To be sold only through O2.


    Once again, Nokia keeps restricting the sales potential of their products.


    The exclusivity strategy has failed Nokia BIG time with AT&T's Lumia 900. It has failed Nokia BIG time with AT&T's Lumia 920.


    Nokia's marketing is PATHETIC.


    When will Nokia get back to what it used to do? Sell its phones based on quality and innovation, instead of marketing tricks and propaganda?
    25 Mar 2013, 02:57 PM Reply Like
  • Author’s reply » @BTR2RSK
    Everywhere you look Nokia's Fundamentals are strong and one should disregard the price swing at all cost. We are talking about 1.50 to 10 cents price swings. Being disgruntled over such swings only shows that a person is trading and not investing. I am adding as much shares as I can every month while it is still discounted below $5. I have disclosed many times buying at this price is a steal. It is also a swing trading haven due to price volatility.
    25 Mar 2013, 03:21 PM Reply Like
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