Strategic Alliance

• 11th Feb, 2011

• Nokia to adopt Microsoft's Windows phone OS
• Microsoft to support Nokia financially and technically to build up Windows phone ecosystem 

REASONS

• Lack of uptake momentum of the new Windows phone ecosystem

• Alliance to fulfill each other's needs

• Rapid decline of Nokia market share

Perspective 

Inside Out perspective

• Resources over market
• Strength driven
• Resource base and activity system
• Adaptation of environment
• Attaining distinctive resources
• Building resource base

Business Lifecycle

Integration of Products and Services - Synergy

• Alliance maximize the utilization rate of complementary assets and synergy

1. Microsoft Bing Maps to adopt rich geographical database of Nokia Maps while nokia would leverage MS Bing's search engine 
2. MS to offer Nokia software development tools to develop software apps
3. Nokia to integrate its billing payment arrangement in Windows phone products
4. ​Microsoft market place to be the sole application and content 'store'

Product Management & Innovation

• Nokia restructured its group executive board, directly reporting to Stephen Elop

• Microsoft windows phone administered under a separate Entertainment & Devices Division, reporting to Steve Ballmer, CEO MS

• Both organized regular training sessions and workshops for engineers and sales employees around the globe

Result of Alliance - Nokia Lumia 800

Product Basis

• Price: Rs.29,999/-
• OS: Windows 7.5 Mango
• Processor: 1.4 GHz Scorpion processor
• Camera: 8 MP Carl Zeiss Optics, Dual LED flash
• Memory: 16 GB storage, 512 MB RAM
• Battery: 1450mAh Li-Ion
• Screen: 3.7 inches

Operational Performance

• In 2013 (2 yrs. since Lumia 800 launch), windows phone had become most rapid growing platform with european market exceeding 10% market share

• Windows phone was shipped more than iphone in 24 countries across South America, Europe, Asia and Africa

• Nokia attracted early adopters to try out the windows phone platform by bringing together innovation and unique competitive features such as camera and imaging technologies

Two Turkeys Don't make an Eagle

• Unfortunately the partnership couldn't yield much; Windows phone just had 3.7% share of smartphone market & Nokia didn't feature in top 5 global vendor list

• Vicious circle: Consumers didn't buy as it had very few apps and developers didn't target it because very few consumers owned one

Reasons

• Business Paradox
• Corporate Paradox

• Fit vs Stretch

• Microsoft Corp. reported its largest-ever quarterly net loss (2015), hurt by a $7.5 billion writedown after the purchase of Nokia’s handset unit failed to rescue the software maker’s mobile business

Repercussions

• It would cut 7,800 jobs, or nearly 7 percent of its workforce

• The net loss in the fourth quarter, which ended June 30,2015, amounted to $3.2 billion, and sales fell 5.1 percent to $22.2 billion

Recommendations

• Microsoft should allow Android apps to run on Windows phone
• Improving Microsoft standing as an innovator
• Take all possible measures to defend the enterprise. Sales of Microsoft software & services to businesses remain to be bright spot
• Reduce complexities and focus on critical areas. for example- Bing & One Drive
• Make the perspective outside-in
• Rebuild its mobile OS around Windows 10 & focus on marketing the striking features rather than comprehensive mobile platform it lacks, since Windows phone users are the only one to carry a full Windows PC in their pocket

https://www.youtube.com/watch?v=t-nW7DxZalQ