Nokia competencies

Nokia competencies all firm comprises of competencies, not all possess nucleus competencies, these argon crucial for a warringness. This report examines the outcome competencies that contri thate most significantly to Nokias war-ridden improvement. These consist of schemeal nuance and look and development. Nokias private-enterprise(a) utility ordain be analysed ground on corporate vane and products and services base, then personal synopsis reported.2.0 suppositional idea of core competenciesFirms possess competencies through efficient use of resources and are required for firms to compete. join competencies are attri onlyes that an organisation possesses which in turn allows it to achieve rivalrous receipts (Prahalad Hamel, 1990 cited Henry. A, 2008).There is differential feat mingled with companies in the same industry, due to individual core competencies since the environment is constant. In 2008, Dell had the largest trade grant in UK PC market (Datamonitor, 2009), with core competencies in its value chain giving private-enterprise(a) advantage (Henry. A, 2008). Core competencies should be appropriable so those who provide the attributes for the competitive advantage should reap benefits (Kay. J, 1993 cited Open University, 2009).The name is not to focus on all competencies just ones that add most value and competitive advantage. Collis and capital of Alabama (1997) identified some attributes within the organisation are more(prenominal) useful for gaining sustainable competitive advantage (Henry, 2008). The features of useful attributes are that they help provide value to customers, are unique and tight to imitate (Collis Montgomery, 1997, cited Hooley. G et al, 2008) as check up onn in figure 1.Other theorists support this identification, Prahalad and Hamel (1990) identified three tests for core competencies1. A core competence should provide access to a wide variety of markets.2. A core competence should stupefy a significant contribution to perceived customer benefits of end products.3. A core competence should be difficult for competitors to imitate.(Prahalad cited The Free Library, 2002).Hamel and Prahalad (The Free Library, 2002) identified core competencies should not remain static whilst the environment changes. Core competencies enable production of sunrise(prenominal) products and services and increase customer birth management, they should be envied by competitors but difficult to replicate (Hooley. G et al, 2008).Shangri La Hotels switch a stronger customer relationship than their competitors (Datamonitor, 2009) their mission Delighting customers for each one and every time (Shangri-La Hotels and Resorts, 2009).2.1 Nokias core competenciesNokia has many competencies but due to recent success appears to focus on the rightly core competencies to gain competitive advantage. The two significant ones are organisational nicety (Blau. J, 2003) and enthronization in research and development (Nok ia, 2009). Organisational culture is a core competence and source of sustainable competitive advantage (Barney, 1986b, cited Hamel. G Heene. A,1994).2.1.1 Nokias organisational cultureNokia, unlike competitors, is modern and entrepreneurial by adopting the correct culture (Blau. J, 2003). Within the organisation entrepreneurship is encouraged by managers open to employee suggestions for new products and services, this allows continuous learning, there is also a feedback process for employees zesty in new ideas (Blau. J, 2003).VP Niitamo, Chair of European Living Labs Portfolio, Some of Nokias success, is from continuously bringing in young, skilful people, without pushing them down one particular career path (Blau. J, 2003). For this to take place they must have dual-lane vision to ensure full commitment from employees (Kanter, 1983 cited Henry. A, 2008).2.1.2 Nokias research and developmentAnother core expertness is Nokias research and development. Nokia employs 51,750 people , over one third is made up of people in research and development. The family employs approximately 1,000 new people in research and development each year, aiming for those who have new skills (Blau. J, 2003). Nokias massive research and development enables it to create trusted consumer relationships, the best mobile devices everywhere and context enriched services (Nokia, 2009).3.0 hypothetic idea of competitive advantageCompetitive advantage results from matching core competencies to opportunities (Business Dictionary, 2009). Many 2000 dot.com failures were companies identifying the opportunity but not having competencies to achieve competitive advantage (Hooley. G et al, 2008).Companies can achieve competitive advantage by charging higher prices for increased value products and services or offering the same products and services as competitors at lower prices (Porter. M. E, 1985).Differences between rival products and services have become narrow, so companies need to find new ways of distinguishing themselves in customers minds. Companies can use tarnishs to be distinctive compared with competitors, and create a relationship with customers for competitive advantage (Chailan. C, 2008).In 2008, the airline industry saw JetBlues new experience based differentiation subsequently they created T5 terminal at JFK. T5 added brand value by augmenting the service with additional and complementary features (DDB, 2009).Companies should look for sustainability competitive advantage that competitors are unable to imitate (Barney, 1991 cited Henry. A, 2008). Tesco uses vendor managed inventory and frame of references relationships with suppliers such as Nestle and coca plant Cola to improve availability, providing competitive advantage for those involved, however unsustainable (William Reed Business Media Ltd, 2009).Figure 2 identifies the relationship between core competencies and competitive advantage. Although core competencies lead to competitive advantages this may be indirect by developing core products or services.3.1 Nokias competitive advantageNokia is currently worldwide largest mobile phone maker, indeed they must have significant core competencies to gain competitive advantage (Yahoo Finance, 2009).Nokias competitive advantage is based on scale, brand and services (Nokia, 2008).3.1.1 Nokias brand valueAfter wavering in 2004, Nokia came back to build an outstanding reputation through a 12% increase in brand value and became fifth top brand (Kiley. D, 2007). Nokia currently has number one brand in many markets worldwide (Temporal. P Davies. R, 2009).Nokias organisational culture contributed to its corporate brand since employees and processes are reflected in the brand (Temporal. P, 2009).Nokias research and development assisted in creating brand value by keeping up to date with evolving consumer demands and is recognised as a partnership that provides consumers with the desired products and services. NRC, Nokias innovations hub invests at least 5% of the annual research and development budget. Innovations are created for commercial purposes subsequently three to five years development (Samuels. M, 2006).3.1.2 Nokias products and servicesIdeas need to align with organisational culture, and so this must be correct to generate desired products and services (Henry. A, 2008). Organisational culture is reflected in products and services through processes and procedures, this led to sustainable competitive advantage. The knowledge possessed by employees cannot be easily transferred, groups of employees would be required for a piece of the knowledge (Argote. L Ingram. P, 2000).Nokias research and development continuously improves and generates new products, this is essential as Nokias markets became highly competitive over the last decade with entrants such as Apple iPhone (Ward. A, 2009). In 2002 Nokia received the Frost and Sullivan market engineering award for its secure access system innovation which was an exceptionally evolved product (BNET,2003 Calif. S. J, 2002).4.0 Critical analysisI conclude that Nokia has effectively developed competencies into core competencies to develop sustainable competitive advantage.I apportion Nokia to have core competencies in particular organisational culture and research and development, contributing most to Nokias competitive advantage. The organisational culture is quite unique among competitors, yet as industry leader so they must be doing the right things internally in relation to the external industry. Other companies should steer away from the negative image that innovative organisations are only effective in small organisations and implement some of Nokias techniques to reduce differential performance between them. However, I realise this will only be effective if there are shared values and commitment from the entire organisation as with Nokia. Organisational culture cannot be easily learned so this must create sustainable competitive adv antage until competitors have developed their culture more effectively.Nokia invests to a great extent in research and development which is reflected in its product and service offering which is outstanding, therefore I see it as a worthwhile investment. I have identified that Nokia doesnt just employ people for research and development, it supports them and develops their knowledge base to benefit the company.I identified Nokias main competitive advantage being brand value and product and service offering. I recognise that Nokia successfully achieved competitive advantage of its brand organisational culture and the beliefs and practices adopted by the company. Nokia must continue to do the right things such as ethical demeanor in the work place or the brand will be tarnished and will be difficult to rebuild unless its loyal customer base sticks by regardless which I find doubtful.Nokias other competitive advantage consists developing latest product designs and outperforming rival s through services. I do not consider this sustainable, contempt Nokias investments in research and development. Product innovation in the mobile phone industry is the main contributor to growth, through replacement sales (Cassell. J, 2004). This is likely to remain the case as the market is already saturated, therefore I feel Nokia wont maintain this level of competition as rival companies would invest more into research and development to compete.Overall, I find Nokia making best use of its core competencies to gain competitive advantage but dont believe it will continue to be industry leader without enhancing its core competencies to ache evolving demands.5.0 ConclusionIn conclusion it has been analysed that Nokia has several core competencies, the most significant being organisational culture and investment in research and development. These core competencies led to competitive advantage in the form of strong brand image and exceptional product and service offerings. Although this is currently the case for Nokia within the mobile phone industry, they may not be sustainable as will be identified over time.