I. Summary of Facts
Nokia is currently the world's largest manufacturer of mobile phones, with a global device market share of approximately 40% in 2008, and global annual revenue of 51.1 billion euros and operating profit of 8.0 billion as of 2007. Early in 1994, to help Nokia get down the learning curve faster and free up resources needed to build related capabilities, CEO Jorma Ollila initiated a strategy of exiting Nokia's old businesses to focus on telecommunications. Nokia complemented its core consumer-focus competence by extending its existing expertise in other capabilities, including low-cost global sourcing of materials, and by adding new capabilities such as global brand building. The result has been a successful business model centered on consumer-friendly mobile communications that has yet to be surpassed, as well as a brand that consistently ranks as one of the most valuable in the world, according to BusinessWeek's annual survey. II. Problem
Nokia's future success is predicated not on new hit products but upon a vital, self-renewing high-performance business model. In terms of sustaining high performance, the distinction is quite significant. The rise of customers who demand goods and services tailored to their needs and delivered on their terms is turning up the pressure on companies to bring more innovation to market, and faster than ever. III.Major Points of Analysis
A. Nokia's distinctive capabilities for Competing in its product markets. Nokia's distinctive capabilities and competitive advantage are tied to its reconfigurable organizational architecture. Modularity allows Nokia to create differentiation rapidly. The ability to reconfigure itself means it can adapt quickly to changing market conditions, allowing the company to rapidly create, innovate and modify products for specific customer segments. In 2005, Nokia brought 56 new models to market. In emerging markets, Nokia reuses key...