Dividends and Nokia changes its logo to signal strategy shift

When a company manages to be successful, the public has a distinct image about the company. If markets shift on the company and the company while still successful is not successful in way the public perceives it, the company must reeducate its investors and the public on what it does. One method is to change the logo. In the world of marketing the colour combination matters, the font matters, the look matters. Years ago, the author worked for a company which changed its logo, but not the rest of the company after a couple years later the biggest shareholder led a shareholder revolt to sack the President because the logo was changed but little else and the company revert back to the old logo.

In an article by Supantha Mukherjee of Reuters, the Finnish company Nokia which a number of years ago was one of the world leaders in mobile phones and the public was aware of the company changed its logo. The company’s share of the mobile phone market was about 1%, which meant under the leadership of Chief Executive Pekka Lundmark a new strategy of reset, accelerate and scale was started. The company reviewed its assets and potential growth markets under the reset stage and determined the company is now a business technology company.

Nokia still produces smartphones, but its emphasis will be selling equipment to telecom companies. Telecom companies were buying equipment from China companies including Huawei, and with many in the intelligence sector believing Chinese companies products send information to China, a space has opened up to compete against Chinese companies.

At the same time of the analysis of reset stage came a new logo to change the public’s and investors perception of the company and use different measurement data to analyze the company.

Linking to dividend paying companies, all companies go through the reset, accelerate and scale process when their high margin core business changes. If a company has high margins, there will be others who want to sell in the same space and if the company is in the low margin business, there is always another company which can lower costs to compete on cost. Hopefully for your investments, there is a very good reason why the high margins are maintained which allows the company to make profits and pay dividends. Logo changes are a sign of changes in the marketplace, if your investment companies are changing logos, do you like them and have you examined the reasons for the change?

There are more questions than answers, till the next time – to raising questions.


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