Thursday, October 15, 2009

Nokia Tales: How Nokia overtook Ericsson

It all started when a lightning struck the Philips electronic factory in Albuquerque in the United States o America. Luckily minutes later the fire was out, but far away in Scandinavia this small event sparked a corporate crisis that shifted power between two of Europe’s largest cell phone companies- both Nokia and Ericsson had a critical dependency on computer chips from the Philips factory. But the damage caused by the fire would decrease the production capacity for weeks. While Ericsson was scrambling to find a solution the Nokia management used it's crisis management skills to scour the whole of Europe to find alternate sources of chips. And within a fe days they had setup a network that would get them through without any fall in production.
Pertti Korhonen, the chief trouble-shooter for Nokia, said afterwards. ‘A crisis is the moment when you improvise.’
By the time Ericsson woke up from the daze, Nokia had taken all that was left at factory in Albuquerque , and had done the same with most other suppliers. In the end, Ericsson lost around US$600 million of revenue and 50 per cent of market share and subsequently had to be rescued by linking with Sony to sell any handsets - thus forming Sony Ericsson.

This article has been sourced from an article titled An information security crisis is the time you improvise. There's another article which you might be interested in if you're into art, it's titled "Didactic Science through Art with Diego Rivera".

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