Nokia Core Competencies

The core competencies of Nokia evolved significantly between the 1990s and 2010 as Nokia itself was evolving. These core competencies both help explain and portray the rise and decline of the company over time, how they gained and then lost competitive advantage in the mobile industry.

In the beginning of the 1990s, The Nokia Corporation was still producing a broad range of products including cables, paper and diverse electronic products for both industries and the general public. This changed in 1992, when Jorma Ollila became CEO. Ollila, seeing the potential of Nokia in the mobile phone business, decided to focus the company's efforts on it and got rid of their other businesses. The focus on mobile phones paid off and Nokia started growing

As a company dominated by and mostly of engineers, Nokia always cared about technical excellence. They developed a particular strength in making quality hardware even for the low-priced devices. As the company grew, Nokia also became more and more efficient in manufacturing their devices. Thanks to economies of scale and superb logistics, they were able to produce cheaper and quicker than their competitors and thus had a strong competitive advantage in the production of mobile phones. This wasn't an easy development and they had to go through a severe crisis in logistics and sourcing before to establish their competitive advantage. Their dominance in the mobile phone market was also supported by their network infrastructure. However, Nokia wasn't only a hardware manufacturer and they put a lot of their efforts in software as well and keeping control over the software was seen as crucial. In fact, the company didn't just want to have quality hardware and software which could work together, they wanted to expand the possibilities of mobile telecommunication with a great emphasis on convergence, especially for their high-end devices. Innovation was seen as a priority and was necessary as well in the high tech business they were in. Nokia invested huge sums in R&D and issued

Their focus on technical excellence, their approach to convergence and their deep product range are examples of core competencies transforming into core rigidities. Having a look at the Nokia N97, this becomes rather clear. The phone was a failure at many levels. It was not ready to be released but Nokia had no choice but to throw it in the market anyway, because it had already been delayed for too long. Instead of being focused on design and user experience as it was now required in the smartphone market, the N97 kept Nokia's old recipe, what used to make a good smartphone, what used to make Nokia's phones the best ones. It had better features than competitors like a 32GB memory or a 5-megapixel camera, but this wasn't the most important