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In this paper we will discuss Nokia’s struggle to find a sustainable approach to the Smartphone market. The findings are based on (i) a review of Nokia’s history, and specifically on how Nokia dealt with introducing new, more or less smart handsets, (ii) on interviews with managers from Nokia and (iii) on data collected on mobile phone usage in 200...
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... spent a very large amount of revenues in R&D (see figure 2), also as a proportion of the sales, sometimes close to 10% ( Sölvell and Porter, 2011 The list of Nokia innovations is quite impressive, ranging from network components, to handset features, digital camera capabilities (together with Zeiss) to software-solutions. The number of patents filed steeply increased at the end of the 1990's, from about three hundred each year in the period 1992-1994, to increase to more than two thousand in 1998 to increase gradually to over 6500 in 2008, and then to be drop dramatically from 20009 to 2012 2 (see figure 3). ...
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... The experience of Nokia offers insight into why Finnish local platforms may struggle to achieve similar dominance. Nokia's decline in market competitiveness can be attributed to several factors: leadership transitions that delayed the embrace of new technologies and market trends, an organizational culture that hindered rapid innovation, and a broad product range that scattered its strategic focus [36]. Additionally, Nokia's delay in creating service-based systems and its struggles to adjust to global market conditions, especially in the U.S., offer a cautionary case study [36]. ...
... Nokia's decline in market competitiveness can be attributed to several factors: leadership transitions that delayed the embrace of new technologies and market trends, an organizational culture that hindered rapid innovation, and a broad product range that scattered its strategic focus [36]. Additionally, Nokia's delay in creating service-based systems and its struggles to adjust to global market conditions, especially in the U.S., offer a cautionary case study [36]. These points emphasize the need for agile management, focused innovation, and strategic ecosystem development to compete with global tech giants. ...
The pervasive integration of digital platforms into daily life has amplified their perceived indispensability. This study investigates the factors influencing this perception across countries with contrasting platform landscapes, focusing on platform quality and usage patterns. We conducted surveys in Finland and Korea, countries representing distinct platform ecosystems. The results revealed higher perceived indispensability in Korea than in Finland, with usefulness and habitual platform use emerging as significant predictors of indispensability in both countries. However, the specific aspects of platform quality influencing this perception diverged. In Finland, the platform’s comprehensiveness and security risk significantly impacted indispensability, while social interaction features played a negligible role. Conversely, in Korea, social interaction features significantly influenced indispensability, while platform comprehensiveness and security risk were non-significant. These findings underscore the multifaceted nature of digital platform indispensability, shaped by the interaction of platform quality and usage patterns. The contextual variations highlighted by our cross-country comparison suggest that a one-size-fits-all approach to platform regulation or user education may be ineffective. Future research should explore these cultural and platform-specific nuances to devise tailored policies.
... However, there are some cases of failure, like Nokia and BlackBerry. Nokia had a dominant position in the market in the early 2000s but failed by adopting several strategies in building an ecosystem around their products causing its downfall in 2011 when happened the shift from Symbian to the Windows phone (Bouwman et al., 2014). Another example of the downfall was the BlackBerry. ...
The health state of a software ecosystem has been determined by its capacity of growth and longevity. Three health indicators represent a healthy software ecosystem: robustness, productivity, and niche creation. Studies focusing on understanding the causes and processes of the state of health of ecosystems have used these indicators largely. Researchers have intensified studies to understand how to achieve a good health state. Despite the growing number of studies, there is little knowledge about influences and actions to achieve health and, more specifically, that consider the effects of the software architecture on the ecosystem. This article presents a study exploring seven open source ecosystems within different domains to describe the influence of architectural practices on the software ecosystem health in terms of their motivations and effects. Our main goal was to understand how the software architecture and related practices can contribute to a healthy ecosystem. We conducted a netnography-based study to gather practices used to create and maintain the software architecture of these ecosystems. Our study brings evidence that architectural practices play a critical role in the achievement of ecosystems’ health. We found fifty practices that have influenced different aspects of health indicators. We highlight the importance of five influential factors – business goals, experience, requirements, resources, and time-to-market – for motivating the adoption of such practices. These factors may also contribute to understanding different strategies used to achieve a good health state. Moreover, we proposed a novel health indicator, trustworthiness, that accounts for the normal operation of a healthy software ecosystem.
... The main reasons include that Nokia failed to innovate the company's products in a timely manner when the smartphone appeared; the Symbian system, which was time-consuming and labor-intensive, was ineffective in the user's experience. Various reasons have caused Nokia to gradually fall behind from being the first mobile phone company [3]. ...
The growth of the smartphone industry is prominent. Smartphone now seems to become a necessity in people’s daily life. In order to provide a more comprehensive analysis and recommendations for investors on the investment of three famous smartphone manufacturers – Apple, Xiaomi, and Nokia, this article compares Equity Beta, Return on Equity (ROE), inventory turnover, the weighted average cost of capital (WACC), leverage ratio, and business risk of three companies. The result demonstrates that Apple has the highest inventory turnover ratio and ROE, as well as the lowest inventory turnover ratio. Apple maintains its leverage and business risk at a relatively medium level among the three companies. Xiaomi has the highest leverage level and WACC but the lowest business risk. The ROE and inventory turnover ratio of Xiaomi is also the weakest among the three companies. Compared with Apple and Xiaomi, Nokia has the lowest Beta and leverage ratio, but the highest business risk and a relatively low inventory turnover ratio. This article found that Apple’s shares would have a higher return, but the investment would also be relatively riskier. For investors pursuing a relatively stable income, Xiaomi would be a better choice to invest. In contrast, Nokia has less potential to bring profit to investors and shareholders.
... This is because SMEs have limited access to human capital skills and knowledge than larger firms (Rogers, 2004). SMEs' lack of knowledge or competencies (Akrich & Miller, 2007;Chesbrough et al., 2011) becomes critical when SMEs wish to carry out a BMI in parallel with technological innovation or new product development (Bouwman et al., 2014). In 2017, twenty-five percent of SMEs in the EU reported a lack of skilled staff or experienced managers as their most important problem (OECD outlook 2019). ...
Firms need to be innovative and adaptive in competitive business environments subject to technological advancement and rapid changes in regulations and customers’ preferences. To do so, companies traditionally innovate their products or services, processes, marketing or organization. Since the advent of the Internet, business model innovation (BMI) has emerged as a new conceptual focus and a critical point to innovation. Compared to other traditional innovations, BMI is associated with high risk and uncertainty since it involves fundamental changes to the core components and/or the architecture of a firm’s business model (BM). Therefore, if not handled properly, a well-formulated BM may fail to improve performance. Therefore, knowing how and when to innovate a BM is a severe challenge for managers/owners of firms. Although most studies that combine strategic and innovation management with BMs mainly focus on large enterprises, the vast majority of firms worldwide (99%) are small and medium-sized enterprises (SMEs). To fill the gap, our research objective is: “To develop and test a conceptual model for implementation of Business Model Innovation in SMEs that focuses on “human and organizational” factors to improve performance.
This research adopted a mixed-method approach consisted of five phases, e.g., two literature reviews, two quantitative studies (Survey, Structural equation modeling using SmartPLS 3) and one qualitative research (Case study, Cross-case analysis using Atlasti.9) to fulfil the research objective.
Our research comprehensive conceptual model helps researchers understand the causal mechanism under which BMI influences the overall firm performance and serves as the grounding for empirical research in different types of companies, e.g., start-ups, SMEs, and large enterprises. On a practical level, our results give SME owners and managers insight into potential contingency factors on expected performance effects of business model innovation. Overall, this research analyzes BMI from different angles and develops a model to maximize business model innovation’s impact on a firm’s performance, especially from human and organizational perspectives.
While the business world is constantly changing in terms of technology, regulations, and customer needs, these results advance BMI research by opening the black box of the causal relationship between BMI and a firm’s overall performance to better understand the BMI phenomenon.
... While closing to the end, in 2011 smartphone share of Nokia has dropped from 33% in 2010 to 14% (Jia and Yin, 2015). 2012 was the year that Nokia Announced 10.000 layoffs and in 2013 the public announcement was made that Microsoft buy in Nokia's mobile device business (Bouwman and Harry et al., 2014). The framework of the study has been formed by associating business functions with innovation types and innovation adoption. ...
... Olli Pekka, the CEO between 2006 and 2010, was not the visionary that was needed in times of disruptive innovation and market change (Bouwman and Harry, 2014). ...
... Stephen Elop, the CEO between 2010 and 2013 was from outside of the company (Bouwman and Harry, 2014). ...
A part of our empirical research trying to develop a new scale in or to measurehip consumer citizenship
... Due to their undue insistence on exploitation and acute resistance to exploration, Polaroid's leadership strictly adhered to the belief on their existing strengths too rigidly, resulting in the company's failure (Tripsas & Gavetti, 2000). Similarly, Nokia was over-focused on its existing strengths and resorted to "control culture," in sharp contrast with the preferred culture of innovation (Bouwman et al., 2014;Sulphey, 2019). Laureiro-Martínez et al. (2010) conducted path-breaking research when examining the neuro-scientific fundamentals of individual-level ambidexterity. ...
The study identifies how subordinates of a multinational organization in Saudi Arabia perceive ambidextrous leadership’s explorative and exploitative factors. A qualitative design was adopted for the study. Data was collected from the employees’ comments about the leaders in a large multinational conglomorate’s organizational Electronic Social Networking (ESN) platform. The comments so collected were analyzed using Thematic Analysis (TA) to address the research objectives. The study results indicate that the leaders exhibited exploration, exploitation, and temporal flexibility styles signifying ambidextrous leadership. Ambidexterity is an aspect that is receiving increased research attention. Despite its widespread use in management science, ambidextrous leadership (AL), and individual level ambidexterity got initiated only in the current decade. The current study extends the literature about AL.
... The company pioneered new types of usability, some of which addressed very specific target groups and needs, such as controls on both sides for gamers, foldout keyboards for emailing, mobile internet devices, or swivelling devices for ease of camcorder access, for example. The accruing rising number of submitted patents -315 in 1990 to peak at 6510 in 2008indicated their approach to innovation (Bouwman et al., 2014). The analysis of aesthetic obsolescence in Nokia focuses on the fashion collections released annually between 2004 and 2006. ...
Planned obsolescence can artificially increase sales by stimulating desire or perceived need. This can be done in many ways and some companies are releasing newer models sooner than necessary or engineering the product to fail after a certain amount of use. In recent years, we have observed a change in the pattern of planned obsolescence strategies employed by technological companies, shifting from aesthetic to technological obsolescence. The reaction to this model comes from social enterprises and grassroots movements addressing the circular economy and repairability. This paper illustrates these relationships in context, taking the mobile phone industry as a case study. We focus on product architecture and product features, as a reference point to discuss the embodiment of strategies, and the degree of control the consumer is given for repairing the product. Using netnography as a method to collect data in a digital-mediated environment, this paper highlights how planned obsolescence strategies are embedded in product characteristics and summarises their evolution. It concludes by opposing planned obsolescence strategies to circular economy principles to discuss more sustainable pathways for the smartphone industry.
... The thought process before Levitt's (1983) article was that companies should customize products based on local preferences and asking consumers what they wanted to buy instead of selling them highly standardized products that they needed. Recent history has shown that many companies like Kodak (Scott 2016), Nokia (Bouwman et al, 2014) and Yahoo (Frick, 2016) produced products that customer wanted rather than what they did not know they needed (Christensen et al., 2015). The same disconnect was also shown in the marketing strategies of these companies, they promoted features rather than customer needs, productivity or ease of living, therefore, lacking the necessary imagination to successfully promote the products (Levitt, 2006). ...
... Nokia's rise and fall as a mobile phone handset maker is considered to be the ideal case for "Marketing Myopia", they focused on building superior products to a wide range of customers and releasing them as fast as possible (Bouwman et al., 2014). Nokia released 30 to 50 different models per year compared to the competition (Samsung and Apple) that released 1-2 phones per year. ...
... Nokia's leadership lacked the necessary vision to see the change in the mobile phone market place at the hight of their market leadership (80% market share 2007) and they were over-confident that the selected strategy was far superior compared to the competition. However, Samsung had more vision of the future of mobile handsets and overtook the market leadership from Nokia in 2011 (Bouwman et al., 2014). Nokia failed to see how the market changed towards larger screens and easy to use operating systems for mobile phones, the rise of Android and iOS gave users better availability to a wide range of applications (Ovide, 2019). ...
Companies main purpose is to develop products that produce value for customers and they should be profitable for the company. So, picking up the correct product development and marketing strategy is vital for the company's success. Globalization has brought people together over centuries of technological development and innovative products and services are part of that development. Professor Theodore Levitt (1983) described in his Harvard Business Review article that similar features of consumptions are likely to show up in different international markets by expanding his "Marketing Myopia" (Levitt, 1960) manifesto. The thought process before Levitt's (1983) article was that companies should customize products based on local preferences and by asking consumers what they wanted to buy instead of selling them highly standardized products that they needed. Many companies still use mass marketing strategies to reach customers and fail to succeed, instead, they should focus their marketing efforts on targeting profitable customer segments. The purpose of this paper is to analyse and explore the possibilities of the Segmentation, Targeting and Positioning (STP) marketing method and give the reader tools to use this marketing strategy. The paper explores four marketing campaigns in different industries to understand how the company applied the STP method. This paper aims to produce generic best-practises of STP for companies to use.
... Consequently, there are many examples of market leaders who have lost their leading positions in the market due to abovementioned dynamics from Kodak to Nokia (Lucas and Goh, 2009;Bouwman et al., 2014). ...
... Source : Christensen 1997;Christensen and Raynor, 2003;Lucas and Goh, 2009;Bouwman et al., 2014. Autonomy Organisations (at least in the private sector) tend to be more consistently successful when facing disruptive innovations when they build autonomous strategic processes next to their day-to-day business (Burgelman, 1991). ...
Today's challenges-such as automation, climate change, ageing populations, pandemics, and deployment of artificial intelligence-have unpredictable and unintended consequences at both global and individual levels. Complex systems have become the norm rather than the exception. In this environment, "reactive" approaches to policy making have increasingly proven ineffective. Waiting until a crisis has struck to start imagining a way out of it can be far most costly (in both human and financial terms) than anticipating and preparing for the crisis before it occurs. As the health crisis due to the spread of COVID-19 has clearly demonstrated, we need to invest in anticipation. To bridge this gap, governments need a new approach to policymaking that enables them to effectively address complex problems and uncertainty with new tools and instruments. This approach should be future-oriented, but also involve an action-oriented, innovation function based on anticipation. Despite the fact that foresight tools are increasingly integrated into policymaking, governments often lack a practical understanding of how to anticipate uncertain futures but also how to act on them today to achieve desired outcomes. This paper introduces the concept of anticipation and discusses the emerging practice around anticipatory innovation governance as a broad-based capacity governments can use to spur on innovations (defined as novel to the context, implemented and value shifting products, services and processes) connected to uncertain futures in the hopes of shaping the former through the innovative practice. This makes it different from traditional anticipation approaches: the aim is to not only create knowledge about what might happen, but also shape and prepare for it through innovation. This paper provides an initial overview of anticipatory innovation governance within the context of academic and policy discussions on the future of policymaking. It discusses how such an approach turns the policymaking process on its head. Rather than policy determining the activities of individuals and groups within a system, individual experiments contribute to shaping policy and its effectiveness. This is done by outlining the parameters around which policymakers wish to make change and then by conducting one or more series of experiments testing and iterating on these parameters continuously with individuals or groups that would be affected and in a real world setting. As a result, governments are able to move towards their ideal future not by simply anticipating potential outcomes and developing innovative policy approaches to address them, but by taking action to ensure that these policy approaches work. This paper builds on an extensive literature review on complexity and policymaking and OECD work in the area of policy innovation, system thinking, anticipation, emerging technology and foresight. The paper also draws on the discussion with experts from national governments and international organisations conducted by the Observatory of Public Sector Innovation.
... Among the highest geographical concentration of forests in Europe, Finland is at the center of a regional industrial cluster with head offices for 3 of the 10 largest European forestry, pulp and paper firms (by net income in 2018 terms) (PwC 2016). 1 The strategic push by Finland towards circular and bioeconomy development follows a period of national economic stagnation linked with the structural changes in the global forest product markets with a trend away from paper use (Bouwman et al. 2014), where most forest sector firms have sought higher value-added innovations to replace the revenue losses from declining markets and high costs. Competitiveness and sustainability are at the core of Finnish, Nordic and European efforts to support renewal and innovation in the industrial forestry sector (TEM 2014;European Commission 2012. ...
Megaforces such as climate change, and market dynamics are impacting the development of product and service markets in the forest sector, driving renewal and reorientation. The University of Helsinki (UofH) has produced leading academic research, through global collaborations, on managing that transition by firms within the Nordic forest sector. To further understanding of how much and in what ways their research is aligned to forest sector developments, a case study was conducted assessing (1) the Nordic industrial forest context, (2) the corresponding research contributions and collaborations from 2014–2019, and (3) future research orientations. A conceptual lens of forest-value chain sustainability from the perspective of industrial competitiveness was applied. Research design included three questions for the aspects noted, investigated sequentially to triangulate and validate results. The results highlighted similarities and divergences between current and future research orientations and between researcher perspectives and the actions of incumbent forestry firms. Together, these indicate gaps in the ambition level required to support renewal in industrial competitiveness. Closing them will require a radical transformation, relying on proactive management and investment toward new product and service development, in order for forest industry firms to become champions in the circular and bioeconomy paradigms.
