From the standpoint of innovation policy and supporting institutions the success of Nokia could be related to the Nordic decision to create the common standard Nordic Mobile Telephony (NMT). This provided Nokia with a common Nordic market of 20 million techno savvy customers before anywhere else in the world. And it provided a perfect platform for ‘infant industry development’ .
When Nokia had grown sufficiently large on the back of this market it was blessed by the European Union’s decision to create a common European standard for mobile telephony – GSM. GSM grew in rapidly both in geographical scope and functions offered.
Nokia was among the best positioned companies to take advantage of this the then world’s largest uniform market for mobile hand sets - Moreover, the US market didn’t manage to develop a common standard, which prevented US companies like Motorola from competing on par with Nokia globally.
The Nokia Management understood that design and being user friendly was more important than being over-engineered and Nokia mobiles appealed to more age groups and customer segments than any of its competitors. It pursued the policy of design and adoption of common platform principle which provided for the growth in product portfolio by allowing economies of scale. It also enabled vigorous investment in R&D. Analog communication technology gradually gave way to digital technology , enabling operators to host new services and creating a steadily expanding market.
Most of all, Nokia’s timing at this transition point in 1991 was ideal. In the 1990s, the company managed to capitalize on the rising demand in European markets, then repeat its success globally. The position achieved in technology, production efficiency, design and marketing can partly be explained by the experience Nokia and its wireless communication acquisition Mobira had in cellular phone markets since early 1980s.
The Role of Management – Nokia...