Analiza Companiei Nokia

Abstract

This paper illustrates how Nokia, the well-known Finish multinational, rides on three

major competitive forces, namely the predominance of knowledge-based activities, an

increasing propensity for velocity and the creation of unique value for specific final

customers. This is investigated with respect to the mobile phones which represents a

particularly successful product familly for the company. Strategic actions undertaken by

Nokia will shape, at least to certain extent, the future of wireless devices.

Introduction

Catalyzed by the improvements made to the national and global information

infrastructures (NII/GII), the current economic effervescence leads the way to major

structural changes within our society. Many have described this revolution as the rise of the

information society (OECD, 1997), the knowledge-based economy (Neef, 1998) or the global

networked economy (Mansell, 1993). Since transactions, information exchange and business

activities are increasingly relying on electronic means, the terms digital economy (US

Government, 1999; Tapscott, 1998) or virtual economy (Lefebvre and Lefebvre, 1998) have

been recently put forward. The business press usually refers to the "new economy".

Regardless of the name that will be sanctified by history, a consensus exists among most

authors: the emerging economic order has imposed changes to the very way companies are

doing business.

In this paper, it is argued that three overlapping major competitive forces, namely the

predominance of knowledge-based activities, an increasing propensity for velocity and the

creation of unique value for specific final customers shape this new economy. These three

imperatives have lately gained momentum due to technological catalysts such as Internet-

based tools, ERP (Enterprise Resource Planning) systems and supply chain management

software. This will be demonstrated by the empirical evidence obtained from the detailed

case study conducted on Nokia, the well known Finish multinational and a major

international player in the telecommunications industry.

The three competitive forces

This section briefly discusses a number of points and main issues related to the above

mentioned forces.

The predominance of knowledge - based activities

The very basic rules of competitiveness have changed: knowledge is now considered

as the most important economic input (Morck and Young, 2000) and "the most strategically

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significant resource of the firm" (Grant, 1996: 375). In fact, "knowledge plays today in all its

forms a crucial role in economic processes. Intangible investments are growing more rapidly

than physical investment. Individuals with more knowledge get better paid jobs, firms with

more knowledge are winners on markets, and nations endowed with more knowledge are

more productive" (OECD, 1996). At the firm level, the value-added to products

(manufactured goods or services) is derived mainly from intelligent, brainpower or

knowledge - based activities. Even manufacturing firms, that are obviously involved in

physical activities such as assembly, are increasingly relying on knowledge - based activities

which typically accounts for 65 % to 90 % of the value delivered to the final customer

(Quinn, 1992)

Knowledge-based activities fall "in the virtual world made of information" (Rayport

and Sviokla, 1995) and thus rely extensively on electronic integration both internally and

externally. First, they require within firms an optimal and efficient use of information

technologies, an information sharing capacity among the functional managers and employees

(for instance, with enterprise wide systems such as ERP) and in the case of larger firms, the

presence of an intranet. In fact, the ERP market has been booming whereas the intranet

market is growing at annual rate of 49 %. Second, high levels of electronic integration

between firms are also required by the emergence of value networks, where business partners

(suppliers, subcontractors, manufacturers, sellers, buyers, distributors, ) pool together the

core competencies in order to bring added value to the final customer. These virtual value

networks, networks of competencies or virtual enterprises (Lefebvre and Lefebvre, 1998;

Venkatraman and Henderson, 1998) manage all the activities along the entire product value

chain (i.e. activities related to sourcing, production, transportation and delivery of a final

product) as well as the flow of goods, information and services from the suppliers' suppliers

to the customers' customers (Kalakota and Winston, 1997). Value networks are therefore

centered on the product which becomes the new unit of analysis. Their competitivess is

critically dependent on the knowledge-based activities required to cope with this complex

web of commercial and non-commercial interactions.

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