The technological advancement have witnessed major modulation in the past decade especially in terms of merger and acquisition, in which the companies got together so as to expand and robust their market domain. Many of such action were able to thrive and sustain in the market, but contrary to this belief even many of the major business giants faced extreme stumbling blocks leading to their domain downfall.
Nokia dominated the mobile phone domain during 1990’s and early 2000’s
Nokia was the most worldwide reputable mobile phones which was reliable enough with all those various competence of the technological advancements, not only this it was also then equipped with internet enabled program, it indeed ruled the area of multimedia features amidst the competition for mobile phone market.
Nokia soon found that there was a decline in their market share rapidly because of the growing competitive market of the other mobile phones such as Samsung and Apple. Great attrition in the market was felt to Nokia because of it due to the association of status quotient which was added along with the iPhone.
The changing environment of advancements came up with the era of touch screen phones launched by Samsung and Apple. Nokia failed to react immediately for the change in the technological environment and this lead to a precipitation in the share price of the Nokia phones in the market.
Nokia could not sustain the competitive threshold longer and Microsoft looked upon to enter the mobile phone division
Perhaps,initially only on 11 February 2011 Nokia announced to bring strategic partnership with Microsoft. The partnership made a lot of things ascertain because it was a collaboration which was looked upon to work as a proficient partnership aimed with the software of Microsoft and Hardware of Nokia.Though Microsoft was looking up on to enter the division of phone so as to compete with Apple and Samsung, so when Nokia services and devices unit were being acquired by Microsoft to take the control of Nokia mobile phones in smart devices was projected as an inbuilt opportunity seeked by Microsoft.
In 2012 Nokia released its new smartphone, the Lumia, which ran on Window’s newly released Operating system- Windows 8. Initially, the release of the Lumia led to increasing, share capitalisation but eventually this situation could not last longer because of the competitive threshold which was getting even stronger.
Microsoft acquired Nokia
And then the most revolutionary decision was taken by the Microsoft to acquire the Nokia division. On September 3, 2013 Microsoft announced that it would acquire the then most dominating mobile phone division Nokia for about 7.2 billion. Windows services Acquisition of Nokia by Microsoft on September 2013 included the acquisition of most of the companies of Nokia at infinite including the manufacturing capacity in Asia.
The alliance formed was then designed along the license agreement with which approximately 32000 employees became a part of this collaboration.The potential partnership of the two was thought to bring the best of Microsoft Software Engineering pragmatic with the best of Nokia product engineering.With the formation of this new alliance the Microsoft design Global sales and marketing Subsidiary in the mobile phone domain was now known by the name of Microsoft mobile.
February 2014 marked the beginning of the newly formed Microsoft Mobile (a subsidiary of Microsoft). Later, in October 2014, Microsoft Mobile announced that Microsoft Lumia would replace the iconic Nokia on the smartphones.
The acquisition doomed with devastating consequences of the aimed strategic alliance
In spite of all the best efforts which Microsoft mobile could put into this venture The most terrible thing which happened was a job cut which took place in the year 2014 July of about 12,500 and about 7,800 employees in July 25 2015 respectively, so this the down cutting of employees and jobs lead to a devastating effect on the company which could be inferred that only a small number of former Nokia employees were remaining with Microsoft now.Probable reason which could be cited for the failure of the collaboration was initially that this acquisition of Microsoft Nokia phone was organised by the then CEO Steve Ballmer who left the company in the same year itself and was taken back with a new CEO Satya nadella who believed that this association was nothing but a strategic shift away from devices
Denouement of the counterproductive coalition
It was in 2015 the company was forced to write down the acquisition for about 350 million as per its concurrent worth. Finally On 18 May 2016 Microsoft informed the public of its intention to write off most of the 7.2 Billion Nokia deal and agreement to sell the mobile devices unit to HMD global and foxconn Technology for just 350 million dollars and it also declared that it would no longer produce new phones.
What had seen to be a promising venture in the past with the first windows phone in 2010 was now taken aback.as it never captured consumers with this new platform.
As such no definite reason can be accounted for this devastating downfall but a series of layoffs over the past years has indeed triggered the end of Microsoft’s mobile subsidiary leading to the prominent example of an overt failure of acquisition.