Two companies that went different ways: Leading Innovation through Insights.
Staying relevant to the changing times can be difficult. We have all experienced it as we lose touch of the zeitgeist and find ourselves awkwardly out of place. But, maybe we can take comfort in the fact that human beings aren’t the only ones who experience this.
Corporate giants often have to ask soul-searching questions like,’’How have consumer preferences changed? Is our product still relevant as it was a year or six months back?’’
Getting these answers wrong could translate to thousands of worker layoffs, loss of market share or brand value and even closure of a business.
When a Corporate Giant got it wrong, very wrong…
A cultural icon of the 90’s and now consigned to the shelves of collector’s items and the nostalgic memory of consumers, Nokia had an impressive reign at the helm of mobile phone market for 14 long years before being dislodged (with the introduction of android phones) by Samsung and Apple.
Nokia got a lot of things wrong but what really sealed the Finnish company’s decline was misreading the market and not keeping up with the changing tides of consumer preferences.
In the words of the former CEO, Stephen Elop, ‘’We had moments in the past year and a half when we could have done some things differently had we known that the industry was changing so rapidly,” Elop told Finnish national daily Aamulehti.
One example of Nokia’s misreading of the markets “was the steep price decrease of Android phones in China,” he said.
“It happened so fast that Nokia’s situation has now become difficult, but we keep honing our strategy’’.
This statement was made 6-years ago (after firing over 20,000 people) when it had a market share of 19.7% compared to its 2018 market share of 1.1%! (the future doesn’t seem too bright either)
How one small company did get it right…
DNA testing companies are mushrooming everyday charging anything from $60 to over $200 for their services. But, one company, 23andMe, a genomics, and biotechnology company started in 2006, stands out from its pack.
It started by offering DNA testing to identify ancestry for a reasonable $99 but what marks 23andMe from its peers, is its ability to constantly innovate by listening to the market. Where its peers focused on providing genetic testing services, the company went one step ahead by providing genetic health reports in 2014 and in 2018 by mining customer data for drug development.
Finding itself sitting on over 5 million customer’s genetic data,
the company signed a $300M deal with GlaxoSmithKline
allowing the drug company to comb through its customer data to develop new drugs. Insurance companies are also reportedly interested in using this approach to fix insurance premium charges and limiting insurance liability and payouts for their clients.
In a single stroke, the company opened new avenues for its growth and is today valued at over $700M!
Nokia and 23andMe encapsulate the story of this century. One company that was drowned in its legacy and one that saw the future and dared to capitalize on it.
As CEO Jeff Immelt of GE said, ’’If you went to bed last night as an industrial company, you’re going to wake up this morning as a software and analytics company’’.
Is your company the next Nokia or the golden unicorn like 23andMe?
You may soon have to ask the inevitable question ‘’What do my customers prefer now? Is my product still relevant as it was a year or six months back?’’
Can you back your answers with hard proof backed by quantifiable numbers and hard data?
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