Theoretical implications

According to the findings above, Nokia has had a commanding lead in the global mobile phone industry in both sales and market share year on year for a ten year period. Nokia’s dominant position in such a highly competitive industry is indicative of the various activities that it undertakes which are directly linked to the value that it is able to create for its buyers. The framework for the study presented in chapter two, posits that by running

optimum value activities, a firm can benefit from such linkages within its primary and support activities through which it can either offer a low cost or differentiated product of value to its customers. This will enable it attain competitive advantage. In addition, by creating gaps in the forms of organizational, businesses, positional and regulatory, between itself and competitors, the firm can sustain its competitive advantage.

Inferring from the value chain comparison carried out in chapter four, it is credible to argue that Nokia’s dominant position is a direct result of its efficient value activities. Nokia is able to coordinate the receiving, storing and disseminating inputs to its product efficiently than the competition while it possesses better capabilities for converting its inputs into the final product form than its rivals. In addition to the above, the comparison of the case companies value activities showed that, Nokia has a better means for collection, storage and physically making its products available to buyers and able to provide means by which its products can be purchased by buyers. Also, it is able to induce them to do so in a way that surpasses the competition while the value of its products is maintained through the provision of services that ensure such maintenance which is second to none of that of its competitors. This gives support to the studies framework presented in chapter two.

Also of equal contribution to Nokia’s dominance in sales and market share in its industry are those activities that while they are not directly involved in production help boost its effectiveness in the customer value creation process than that of its rivals. The purchasing of inputs that are used in its value chain as well as efforts to improve on its products and process of production to ensure customer satisfaction as shown in the value activities comparison, are ahead of the competition. The associated benefits in the end have been translated into high sales and market share relative to its industry rivals.

Nokia’s efficiency in value activities to that of industry rivals as the framework posits added to its understanding of those activities that contribute to its relative cost position serving as a basis for differentiation of its products from that of the competition.

More so, this have enabled Nokia to reduce the cost of its value creating activities, thus cutting down on its total amount of resources used as a reduction in its economic cost

below its competitors due to its possession of economies of scale, learning curve, differential low cost to factors of production, technological advantage independent of scale and policy choices, thus allowing it to be ahead of the competition as evidenced in its high sales and market shares. (See comparison of value activities)

By contrast, differentiation strategy has allowed Nokia to offer products that are not only of unique attributes but are valued by its customers to be different from that of the competition. By offering products that are superior to the competition, Nokia is not only able to command higher prices, but also maintain its leadership position within the industry.

This is supported by (Buzzel & Gale 1987) that when customers perceive a firms products to be of superior quality, the firm stand to gain several benefits: (1) stronger customer loyalty. (2) Greater repeat purchases. (3) Lower vulnerability to price wars. (4) The ability to command higher relative prices without affecting share. (5) Lower marketing costs, and (6) higher sales growth

Nokia’s high market share in the industry could be equated to its strategic position within the industry through its value creating activities as either possessing the means of realizing cost or providing better value than their competitors. Achieving large shares of the markets within an industry is considered more profitable than smaller market share rivals. Market share can be explained as a firm’s sales in relation to total industry sales. The Boston Consulting Group Matrix acknowledges market share as a key indicator of industry growth (Lynch, 2000, p. 175; David, 2001, p. 212) therefore, firms that command the market of an industry are able to profit from their established branding (Buzzell et al., 1975)

Buzzell & Gale (1987) identified market share as one of the business strategy and competitive position variables that are positively related to the success of a firm. They further acknowledged that market share has a more dramatic effect on return on investment (ROI) and that the pretax profit margins on sales for market leaders are about three times those of businesses with smaller market share. (Buzzell, & Gale, 1987:94) hinted that market share is related positively to profitability and clearly stated that “Market Share in

itself doesn't "cause" anything. . . . It reflects two kinds of forces, however, that do cause high or low profits” It is therefore acceptable that increased market share can be equated with success, while decreased market share indicates unfavorable actions by firms and most often equated with failure.

The above arguments give support to the empirical data presented above which indicates Nokia’s dominance in sales and market share of the global mobile phone industry is indicative of its competitive advantage among its industry rivals. These, coupled with Porter (1985) claim that a company has competitive advantages over its rivals, when it sustains profits that exceed the average for its industry.

The analysis and discussion as to the sustainability of Nokia’s competitive advantage can not be exhaustive and thus, will be open since it is confined to the presented data above.

The evidence from the empirical data is of no doubt that Nokia is enjoying a competitive advantage over its rivals. However, this cannot be said without caution as to whether Nokia’s advantage is sustainable. To this end, if one could easily get away with the notion that the presented data is indicative of Nokia’s sustainable competitive advantage, then factors that might account for its sustenance as presented in the experts opinion on measures taken by Nokia in contrast to its rivals to sustain its competitive advantage, can be attributed to differences in their various capabilities to that of the competition. This was presented at the bottom part of this study’s framework.

Nokia’s entire system of business operation which is reflective of its special skills, knowledge, experience and quality of relationship with its suppliers, distributors and customers are not the only attributes that are efficiently different from that of its rivals but its whole organization and its culture such as values, beliefs, habits and attitudes of its workforce is positively inclined towards high quality standards, strong organizational learning ability, strong desire to react to challenges and an ability to change, well position it in a way that it is able to hold on to its competitive advantage to the competition. Also of a positive contribution to the sustenance of its competitive advantage among its rivals is its

taken strategic decisions in the past as a result of which customers have a positive image about the company and its products as well as its possession of certain intellectual property rights, trade secrets and contracts relative to the competition, thus making it difficult for its rivals to strip it of its competitive advantage.