Nokia Corporation as a previous market leader unexpectedly loses its market share in the 2010’s. To rescue the company, its CEO, Stephen Elop, took an extreme measure and published a persuasive memo to all Nokia’s employees. Much violent imagery and language such as burning platform, war, and death were used. With this memo, Elop wanted to visualize the existing Nokia’s business as an oil rig which was on fire, forcing workers to jump into the North Sea (Edwards, 2013). Using this approach, Elop may had scared his best talents and forced them to “jump from the sinking boat” while they still can, since for the A players, looking for a new job would not be too difficult. On the other hand, it may motivate some loyal employees as well, to strive and tune their mindset to the survival mode, to do whatever they can to bring the company up again.
Looking from James’ Operation Management perspective, the “Burning Platform” memorandum consists both the tangible and intangible elements. As stated by James (2011), goods, which physically can be touched, are tangible, while a service is intangible. However, in reality, both goods and services have both tangible and intangible elements which can be placed on a continuum. Similar to James’ argument, Nokia products have both tangible and intangible elements. Physically we can touch and see the Nokia’s product (tangible). However, the intangible parts are much greater. People can enjoy communication, checking emails, sending pictures/videos, use the phone as a Personal Assistance, using Apps, etc. To support both tangible and intangible elements, Nokia needs many supports from its buyer who will provide cash to run the company, and support from its employees, developers, suppliers, and service providers to provide great services. In 2010’s, Nokia started to lose these supports due to lack accountability and leadership to align and direct the company through the competitive time (internal factors) and a very strong competition from Apple, Android phones, and Chinese OEM (external factors) which had changed the market preference and situation (Edwards, 2013).
To gain the supports back, Elop formulated an Operation Strategy which followed the Hill’s framework. Hill (2005) suggests a framework which consists of five steps: define the corporate objective, determine the marketing strategies, assess how different products win order against competitors, establish an appropriate delivery mode, and provide the required infrastructure to support operations. From Elop’s “Burning Platform” memo, the Hill’s framework can be recognized as below:
1. The corporate objective is to go through a path forward, to rebuild its market leadership based on the new strategy.
2. The marketing strategy is to arrange a strategic partnership with Microsoft, to build a new global mobile ecosystem (Blodget, 2011).
3. How different products win order against competitors? Elop was hoping that with their strategic partnership with Microsoft, Nokia can win its market share back.
4. The delivery mode will be through Nokia and Microsoft existing channels.
5. To support this new initiative, a new global mobile ecosystem was established, for the benefit of customers, developers, mobile operators, suppliers, and business around the world (Blodget, 2011).
In conclusion, the “Burning Platform” memo was a very bold initiative from Elop to rescue a “burning” company. The Hill framework was laid quite clearly for this initiative. Unfortunately, as we can see now, Nokia’s strategic move has not been succeeding. Although the internal factors are strong, the external pressure from other companies and technologies/platform are too robust to be challenged.
References
Blodget, H. (2011). Open Letter from CEO Stephen Elop, Nokia and CEO Steve Ballmer, Microsoft. Business Insider. Retrieved from https://www.businessinsider.com/nokia-heres-why-we-jumped-off-the-burning-platform-into-the-frigid-north-sea-chose-windows-phone-7-2011-2
Edward, J. (2013). All Microsoft Employees Should Read Stephen Elop’s ‘Burning Platform’ Memo Right Now. Business Insider. Retrieved from http://www.businessinsider.com/stephen-elops-burning-platform-memo-2013-9
Hill, T. (2005). Operation Management (2nd ed.). Palgrave Macmillan, Basingstoke.
James, T. (2011). Operations Strategy. Bookbon.
Looking from James’ Operation Management perspective, the “Burning Platform” memorandum consists both the tangible and intangible elements. As stated by James (2011), goods, which physically can be touched, are tangible, while a service is intangible. However, in reality, both goods and services have both tangible and intangible elements which can be placed on a continuum. Similar to James’ argument, Nokia products have both tangible and intangible elements. Physically we can touch and see the Nokia’s product (tangible). However, the intangible parts are much greater. People can enjoy communication, checking emails, sending pictures/videos, use the phone as a Personal Assistance, using Apps, etc. To support both tangible and intangible elements, Nokia needs many supports from its buyer who will provide cash to run the company, and support from its employees, developers, suppliers, and service providers to provide great services. In 2010’s, Nokia started to lose these supports due to lack accountability and leadership to align and direct the company through the competitive time (internal factors) and a very strong competition from Apple, Android phones, and Chinese OEM (external factors) which had changed the market preference and situation (Edwards, 2013).
To gain the supports back, Elop formulated an Operation Strategy which followed the Hill’s framework. Hill (2005) suggests a framework which consists of five steps: define the corporate objective, determine the marketing strategies, assess how different products win order against competitors, establish an appropriate delivery mode, and provide the required infrastructure to support operations. From Elop’s “Burning Platform” memo, the Hill’s framework can be recognized as below:
1. The corporate objective is to go through a path forward, to rebuild its market leadership based on the new strategy.
2. The marketing strategy is to arrange a strategic partnership with Microsoft, to build a new global mobile ecosystem (Blodget, 2011).
3. How different products win order against competitors? Elop was hoping that with their strategic partnership with Microsoft, Nokia can win its market share back.
4. The delivery mode will be through Nokia and Microsoft existing channels.
5. To support this new initiative, a new global mobile ecosystem was established, for the benefit of customers, developers, mobile operators, suppliers, and business around the world (Blodget, 2011).
In conclusion, the “Burning Platform” memo was a very bold initiative from Elop to rescue a “burning” company. The Hill framework was laid quite clearly for this initiative. Unfortunately, as we can see now, Nokia’s strategic move has not been succeeding. Although the internal factors are strong, the external pressure from other companies and technologies/platform are too robust to be challenged.
References
Blodget, H. (2011). Open Letter from CEO Stephen Elop, Nokia and CEO Steve Ballmer, Microsoft. Business Insider. Retrieved from https://www.businessinsider.com/nokia-heres-why-we-jumped-off-the-burning-platform-into-the-frigid-north-sea-chose-windows-phone-7-2011-2
Edward, J. (2013). All Microsoft Employees Should Read Stephen Elop’s ‘Burning Platform’ Memo Right Now. Business Insider. Retrieved from http://www.businessinsider.com/stephen-elops-burning-platform-memo-2013-9
Hill, T. (2005). Operation Management (2nd ed.). Palgrave Macmillan, Basingstoke.
James, T. (2011). Operations Strategy. Bookbon.
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