Nokia competencies

Nokia competenciesEvery firm comprises of competencies, not all possess middle competencies, these are crucial for a matchedness. This report examines the shopping center competencies that contribute nearly importantly to Nokias private-enterprise(a) good. These consist of organisational assimilation and look into and development. Nokias competitive advantage volition be analysed based on corporate stigmatise and products and function base, then in-person analysis reported.2.0 Theoretical idea of core competenciesFirms possess competencies finished efficient use of resources and are required for firms to compete. Core competencies are attributes that an organisation possesses which in arise allows it to achieve competitive advantage (Prahalad Hamel, 1990 cited Henry. A, 2008).There is differential per fashionance between companies in the same attention, due to individual core competencies since the environment is constant. In 2008, dingle had the largest market shar e in UK PC market (Datamonitor, 2009), with core competencies in its evaluate chain giving competitive 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 key is not to focus on all competencies just whizzs that add most value and competitive advantage. Collis and Montgomery (1997) identified some attributes within the organisation are more useful for gaining sustainable competitive advantage (Henry, 2008). The features of useful attributes are that they do provide value to customers, are unique and difficult to imitate (Collis Montgomery, 1997, cited Hooley. G et al, 2008) as seen 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 make a significant sectio n 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 new products and services and increase customer copulationship management, they should be envied by competitors but difficult to replicate (Hooley. G et al, 2008).Shangri La Hotels maintain a stronger customer relationship than their competitors (Datamonitor, 2009) their mission Delighting customers each and every time (Shangri-La Hotels and Resorts, 2009).2.1 Nokias core competenciesNokia has many competencies but due to recent victory appears to focus on the right core competencies to gain competitive advantage. The two significant ones are organisational glossiness (Blau. J, 2003) and investment in research and development (Nokia, 2009). Organisational go al 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 innovative 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 engaging in new ideas (Blau. J, 2003).VP Niitamo, tone down of European Living Labs Portfolio, Some of Nokias success, is from continuously bringing in young, talented people, without pushing them down one particular career path (Blau. J, 2003). For this to take aim they moldiness have shared vision to ensure full commitment from employees (Kanter, 1983 cited Henry. A, 2008).2.1.2 Nokias research and developmentAnother core competency is Nokias research and development. Nokia employs 51,750 people, over one third is ma de up of people in research and development. The company employs approximately 1,000 new people in research and development each year, aiming for those who have new skills (Blau. J, 2003). Nokias extensive research and development enables it to create trusted consumer relationships, the best liquid devices everywhere and context enriched services (Nokia, 2009).3.0 Theoretical 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 impact products and services have become narrow, so companies need to find new ways of distinguis hing themselves in customers minds. Companies can use leaf blades 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 after they created T5 terminal at JFK. T5 added target 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 builds relationships with suppliers such as Nestle and Coca 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 produ cts or services.3.1 Nokias competitive advantageNokia is currently worldwide largest mobile phone maker, therefore 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 company that provides consumers with the desired products and services. NRC, Nokias innovations hub invests at least 5% of the annual research an d development budget. Innovations are created for commercial purposes after three to five age development (Samuels. M, 2006).3.1.2 Nokias products and servicesIdeas need to align with organisational culture, therefore 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 fraction 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 certain 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 consider 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 ignore differential performance between them. However, I realise this will only be effective if there are shared values and commitment from the finished organisation as with Nokia. Organisational culture cannot be easily learned so this must create sustainable competitive advantage until competitors have developed their cu lture more effectively.Nokia invests heavily in research and development which is reflected in its product and service offering which is outstanding, therefore I see it as a worthy 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 behaviour 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 a la mode(p) product designs and outperforming rivals through services. I do not consider this sustainable, despite 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 usage 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 meet evolving demands.5.0 ConclusionIn decisiveness 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.