Nokia is a world leader in mobile communications, driving the growth and sustainability of the broader mobility industry. A business model that can link a new technology to an emerging market need is the key to industry transformation. Many ways to do this kind of analysis exist and are used world widely, but the ones that are able to give the best results are, in my opinion, mckinsey 7s. In times of continuous change the book is an inspiring reminder for leaders to constantly challenge assumptions, look for opportunities ahead, stay open minded and lead with an entrepreneurial. The reason to conduct a case study of these companies is both have undergone significant leadership changes in the last six years and the direction, scope, and. Productization of a knowledge business the transformation from projectbased system integrator to digital service provider of productized and. A generation ago, a kodak moment meant something that was worth saving and savoring. Designmethodologyapproach methodologically, an historical case study of nokia corporations drastic business model transformation between the years. Antti lamberg department of industrial management, university of technology, aalto university, helsinki, finland. All documentation is written in english, and is used in official intracompany communication. The power of paranoid optimism to lead through colossal. The radical business model transformation manoeuvres outlined in radical business model transformation make innovation the instantion of the business transformation by changing radically in the frontend value prep and value delivery, the backend value creation, e. Corporate strategy is concerned with the overall purpose and scope of the business to meet stakeholder expectations.
The business model canvas is an excellent way of describing a business model 3. The master of business model transformation 143 08 gase studies of companies radically shifting the level of customization 161 xerox. Nokia s problem was that it had a completely inflexible global platform and the processes that went with it. The competitve advantages nokia has in the cellular phone marketplace. Whether you are looking for strategic planning or project management books, this is the place to look. Change management lessons from microsoft and apple case study. The finnish telecommunications giant nokia is an illuminating example of a corporation that made a successful business model transformation or turnaround that rescued the firm from near bankruptcy and set it on the path to becoming one of the worlds great corporate success stories of the 1990s and 2000s. But the 4 below are the ones i found most interesting. The strategic decisions that caused nokias failure insead. Essentially, the illustration captures the key mechanisms and processes that led and lead to radical business model change in a multiunit corporation, and thus provides answers to our research questions. On most video calls, i crossed my fingers that my laptop and internet connection would keep up. In the current complex and fastchanging business climate, organizations often underestimate the significance of operating model refinements necessary to effect transformation across people. Lessons from nokia article pdf available in management decision 494.
Digital transformation means business model change. Now were seeing it in regards to business model change, he says. Oct 08, 20 the real lessons from the fates of blackberry and nokia. Very interesting and from perspective of the man who is in the center of nokia transformation. Still too many companies focus on efficiency gains and automation and hence run into the risk of optimizing or these days digitizing the past instead of innovating for the future. Nokia connects people to each other and the information that matters to them with easytouse and innovative products like mobile phones, devices and solutions for imaging, games, media and businesses.
Findings the conceptual and historical work results in a process model of business model change. Adapting cognitive theory to bmi, the paper discusses how bmi is driven by corporate level market mechanisms that allow cognitive exchanges and build on existing capabilities. The authors are jaakko aspara, juhaantti lamberg, arjo laukia and henrikki tikkanen. Explore our latest insights around business model and operations transformation to learn how you can capture new growth opportunities, reduce costs, improve efficiencies, and stay ahead of consumer preferences. Listen to this podcast or read the transcript, where i share with you three lessons from the icip business course. In the context of our study of nokias business model transformation, relevant analytical levels consist of. Radical business model transformation is essential reading for business leaders, transformation experts and mba students interested in ensuring that their business model is futureproof and can withstand the new proliferation of innovations that are set to transform the business landscape.
Today, the term increasingly serves as a corporate bogeyman that warns executives of the need to stand up. Mar, 2015 business model transformation is the next big thing what ceos think is the cause of the next big thing 10% changes to costspricing 11% new product service offerings % changes to consumer demand 15% new market opportunities 22% business model change 9. So by imagining ceos to be morons, we neglect to look more closely at what led to their demise and learn valuable lessons. I thought that was good enough, but after seeing a video presentation i made, i realized that i looked fuzzy and sounded far away. Nokia was by no means a passive follower of the novel competitive.
Management books our free management books will guide you through the wealth of theory and practicalities of effective management. Jul 07, 2018 so by imagining ceos to be morons, we neglect to look more closely at what led to their demise and learn valuable lessons. Pdf strategic management of business model transformation. Then iphones and androids appeared out of nowhere and pushed nokia off the cliff. This is a shortened version of strategic management of business model transformation. The great nokia turnarounduniversal business lessons for leaders in any industry.
Once the iphone picked up traction in the market, nokias handset business was doomed. Online supporting resources include a business model. The power of paranoid optimism to lead through colossal change. Download it once and read it on your kindle device, pc, phones or tablets. In quick order, he and his board bought back half of nsn nokia siemens networks, a networking joint venture that had been spun off at the height of nokias mobile dominance, negotiated the sale of its phone business to microsoft, and then wheeled to double down on networking by purchasing rival networking giant alcatellucent. How blockbuster, kodak and xerox really failed its not. Sep 22, 2015 nokia managers had great respect for the individuals and valued information good or bad coming from the rank and file as long as it was based on solid data and reasoning. Additionally, teece links the business model to top management cognition by suggesting that a business model reflects managements hypothesis about what customers want, how they want it, and how the enterprise can organize to best meet those needs, get paid for doing so, and make a profit teece, 2010, p. How blockbuster, kodak and xerox really failed its not what. Pdf management decision the business model in the practice of. It emphasizes the speed and flexibility of decisionmaking in a flat, networked organization.
How digital transformation drives business model change i. There are fewer than youd expect from the vast heaps of business books with a couple of sentences of thought in 180300 pages. Nov 18, 2019 its useful to examine how others have approached change and transition. The anatomy and causal structure of a corporate myth. Transforming nokia is a personal and powerful story of one of the most challenging and remarkable turnarounds in corporate history. For more like this, order your copy of building the agile business through digital transformation, or you can join our community to access exclusive content related to the book. The moves that led to nokias decline paint a cautionary tale for. Such transformations differ from previous eras where innovation was about reinventing the product. Ristos book, titled, transforming nokia, explains what happened and shares lessons from his personal experience. Harvards michael porter so an observer rather than practitioner on business models which is easy to find, practitione. Oct 25, 2017 a great example of real agile transformation. Business model transformation at nokia emerald group publishing. Most organisations need new business models to combat disruption 2. Change management lessons from microsoft and apple case.
Successful business transformation strategies are developed with an acute knowledge of the interdependencies between the firms strategic and financial objectives, the markets, products, customers and channels of its business model, the core processes. For fan of business book and technical history, this is must read. The official business language of nokia is english. The power of paranoid optimism to lead through colossal change kindle edition by siilasmaa, risto. The framework has gained increasing importance as a novel concept. There are many lessons to learn from blockbuster and the way the business was mismanaged to bankruptcy. Oct 29, 2018 as chairman of nokia, he has seen the company transform from being a household name in mobile handsets to completely changing its business and model. Before regular video calls became a necessity for me, i used to make do with the camera and microphone on my laptop. The great nokia turnarounduniversal business lessons for le. Transformation is now an imperative for most companies, necessitating fundamental change in strategy, operating model, organization, people, and processes. By conducting simple, lowfidelity experiments starting with desirability, the new business model can be significantly derisked 5.
Execute your strategic vision and dramatically improve business performance. In this post, an apple change management case study, well examine the change management lessons from microsoft and apple. The great nokia turnarounduniversal business lessons for leaders in any industry nokia once dominated the smartphone industry. But since 2007, nokia had been operating its network infrastructure unit as a 5050 joint venture with siemens. Nokia expanded its business from being a provider of mobile network services to covering the full range. Strategic management of business model transformation.
Mark garrett, chief financial officer of adobe systems inc. Nokias official corporate culture manifesto since the 1990s is called the nokia way. Its useful to examine how others have approached change and transition. Deloittes business model transformation consultants are ready to help you capture new growth opportunities, reduce costs, improve efficiencies, and stay ahead of consumer preferences. Pdf corporate business model transformation and inter.
Findings the conceptual and historical work results in a process model of business model change, demonstrating how central business units feed strategic alternatives and capabilities to the corporate. Nokias problem was that it had a completely inflexible global platform and the processes that went with it. Arjo laukias research works aalto university, helsinki and. Business model innovation why engaging with sap hybris brim. A business model is a framework for finding a systematic way to unlock longterm value for an organization while delivering value to customers and capturing value through monetization strategies. Nokia hopes it is on cusp of its greatest transformation yet. The case of nokia versus apple, clearly nokia fell behind apple in the development of total capability to deliver a user experience equal to the apple iphone. I picked this up after got a hint of this books existence and finish it in just a week. And until 20, nokia had been planning to reduce its involvement in the business by preparing the joint venture for a full spinoff and ipo. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decisionmaking throughout the business. From strategy to business models and to tactics ramon casadesusmasanell joan enric ricart november 2009 abstract the notion of business model has been used by strategy scholars to refer to the logic of the firm, the way it operates and how it creates value for its stakeholders. Nokia was a like a very large ship that took forever to change. The real lessons from the fates of blackberry and nokia. Nokia continued to innovate brilliant technical features in its mobile devices nokia phones were in fact often among the first to introduce novel features, including touchscreen, cameras, wifi, wireless charging, etc.
We help organizations set and execute their strategic vision and dramatically improve business performance. Designmethodologyapproach methodologically, an historical case study of nokia corporations drastic business model transformation between the years 1987 and 1995 is reported. The radical business model transformation manoeuvres outlined in radical business model transformation make innovation the instantion of the business. When apple coupled the ipod with itunes, it revolutionized the. It was to mobile phones was kleenex is to facial tissues. In just four years, the company lost over 90 percent of its value.
Agile transformation at ing a case study business agility. The truth is that every business model fails eventually. The strategic decisions that caused nokias failure. The real lessons from the fates of blackberry and nokia scott d. Nov 23, 2017 the game was lost, and it was left to a new ceo stephen elop and new chairman risto siilasmaa to draw from the lessons and successfully disengage nokia from mobile phones to refocus the company on its other core business, network infrastructure equipment. How digital transformation drives business model change. Noka apple handset revenue 20102012 the decline and resurrection of nokia is a classic story of corporate. Use features like bookmarks, note taking and highlighting while reading transforming nokia. Business models need to be desirable, feasible and viable 4. Md strategic management of business model transformation. Nokia managers had great respect for the individuals and valued information good or bad coming from the rank and file as long as it was based on solid data and reasoning. The chairman of nokia explains how the iphone and android disrupted this iconic mobile phone company and what they did to survive. As chairman of nokia, he has seen the company transform from being a household name in mobile handsets to completely changing its business and model. A business model is a holistic framework to understand, design, and test your business assumptions in the marketplace.
Apr 19, 2018 most organisations need new business models to combat disruption 2. Business model transformation is the next big thing what ceos think is the cause of the next big thing 10% changes to costspricing 11% new product service offerings % changes to consumer demand 15% new market opportunities 22% business model change 9. Ft business book of the year a lockdown reading list. Swift transformation of corporatelevel business models is facilitated by a sophisticated management accounting system that allows the identification of. At the same time, the new ceo must reinvent the business model, enhance product and service offerings, and invest in other longterm initiatives. Jul 15, 2016 a generation ago, a kodak moment meant something that was worth saving and savoring. The next lesson is on one of the five classes of business models used in iot the service business model. Business model archives the business of the internet of. International, corporate and business strategy of nokia and lg. Nokia s official corporate culture manifesto since the 1990s is called the nokia way. Nokias largest remaining operational unit was the network business. Arjo laukias research works aalto university, helsinki. Arjo laukias 4 research works with 230 citations and 8,218 reads, including.
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