Monthly Archives: October 2009

Nokia Designs that Save, Cost More

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In the New York Times article, “Nokia Tries to Undo Blunders in U.S.,” journalist, Kevin J. O’brien interviews executives at Nokia, a Finnish company and the world’s largest cell phone maker, about its decline in the United States.

Nokia’s comments are best summarized by this quote: “Among its biggest blunders, analysts and former Nokia executives say, the company failed to design many of its phones to the tastes of American consumers, instead mass producing devices for the global market to save on production costs.” That move cost Nokia almost a 30% share of the American market. On Thursday, Nokia posted a 1.36 billion loss and a global sales decline of 20%.

Evident in this story: the value of good design, and the cost of short-term thinking.

Example, Nokia was slow to develop a smart phone that could compete with the iPhone, a consistently growing sector of the cell phone market. And refused to tailor merchandise to local tastes and demands, at a penalty. The cell phone industry is extremely competitive and good design is an important element to any business success story.

Now, “Mark Louison, president of Nokia’s North American unit, says the company is laying the groundwork for long-term success.” Long-term, is a word not often uttered in corporate America. That said, having a vision of the long-term, the future that is, will be critical to any company looking to thrive.

If  only more executives  would take the time to understand the long-term picture and build for local markets, we would all benefit from an environmentally and economically sustainable world. NATALIA