All documentation is written in english, and is used in official intracompany communication. Md strategic management of business model transformation. Arjo laukias 4 research works with 230 citations and 8,218 reads, including. Now were seeing it in regards to business model change, he says. A business model is a holistic framework to understand, design, and test your business assumptions in the marketplace. 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.
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. 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. 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. Nokias largest remaining operational unit was the network business. The power of paranoid optimism to lead through colossal change kindle edition by siilasmaa, risto. 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. The real lessons from the fates of blackberry and nokia. The first, an overview of the value creation framework, that walks through the four types of value creation in iot. Oct 25, 2017 a great example of real agile transformation. Use features like bookmarks, note taking and highlighting while reading transforming nokia. In just four years, the company lost over 90 percent of its value. 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 management decision the business model in the practice of. Nokia s problem was that it had a completely inflexible global platform and the processes that went with it. A generation ago, a kodak moment meant something that was worth saving and savoring. 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. Business models need to be desirable, feasible and viable 4. By conducting simple, lowfidelity experiments starting with desirability, the new business model can be significantly derisked 5. Lessons from nokia article pdf available in management decision 494.
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 framework for finding a systematic way to unlock longterm value for an organization while delivering value to customers and capturing value through monetization strategies. 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. Arjo laukias research works aalto university, helsinki. Ft business book of the year a lockdown reading list. Nokias problem was that it had a completely inflexible global platform and the processes that went with it. I picked this up after got a hint of this books existence and finish it in just a week. Apr 19, 2018 most organisations need new business models to combat disruption 2. The strategic decisions that caused nokias failure insead. I thought that was good enough, but after seeing a video presentation i made, i realized that i looked fuzzy and sounded far away. Productization of a knowledge business the transformation from projectbased system integrator to digital service provider of productized and. Online supporting resources include a business model. Nokia hopes it is on cusp of its greatest transformation yet.
Corporate strategy is concerned with the overall purpose and scope of the business to meet stakeholder expectations. Oct 08, 20 the real lessons from the fates of blackberry and nokia. In the current complex and fastchanging business climate, organizations often underestimate the significance of operating model refinements necessary to effect transformation across people. The real lessons from the fates of blackberry and nokia scott d. The truth is that every business model fails eventually. The great nokia turnarounduniversal business lessons for le. Before regular video calls became a necessity for me, i used to make do with the camera and microphone on my laptop. Agile transformation at ing a case study business agility. How blockbuster, kodak and xerox really failed its not what. 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.
Most organisations need new business models to combat disruption 2. Pdf strategic management of business model transformation. 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. 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. 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. Change management lessons from microsoft and apple case. 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. We help organizations set and execute their strategic vision and dramatically improve business performance. Once the iphone picked up traction in the market, nokias handset business was doomed. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decisionmaking throughout the business. Change management lessons from microsoft and apple case study. Business model innovation why engaging with sap hybris brim. Strategic management of business model transformation.
Such transformations differ from previous eras where innovation was about reinventing the product. Pdf corporate business model transformation and inter. There are many lessons to learn from blockbuster and the way the business was mismanaged to bankruptcy. On most video calls, i crossed my fingers that my laptop and internet connection would keep up. Designmethodologyapproach methodologically, an historical case study of nokia corporations drastic business model transformation between the years 1987 and 1995 is reported. Nokia is a world leader in mobile communications, driving the growth and sustainability of the broader mobility industry.
Designmethodologyapproach methodologically, an historical case study of nokia corporations drastic business model transformation between the years. Transforming nokia is a personal and powerful story of one of the most challenging and remarkable turnarounds in corporate history. 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. The power of paranoid optimism to lead through colossal.
But the 4 below are the ones i found most interesting. The framework has gained increasing importance as a novel concept. 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. International, corporate and business strategy of nokia and lg. Nokias official corporate culture manifesto since the 1990s is called the nokia way. Digital transformation means business model change. Then iphones and androids appeared out of nowhere and pushed nokia off the cliff. Mark garrett, chief financial officer of adobe systems inc. Ristos book, titled, transforming nokia, explains what happened and shares lessons from his personal experience. Business model archives the business of the internet of. 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.
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. 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. This is a shortened version of strategic management of business model transformation. 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. Antti lamberg department of industrial management, university of technology, aalto university, helsinki, finland. Today, the term increasingly serves as a corporate bogeyman that warns executives of the need to stand up. Very interesting and from perspective of the man who is in the center of nokia transformation. 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. For fan of business book and technical history, this is must read. So by imagining ceos to be morons, we neglect to look more closely at what led to their demise and learn valuable lessons. The great nokia turnarounduniversal business lessons for leaders in any industry. It emphasizes the speed and flexibility of decisionmaking in a flat, networked organization.
The competitve advantages nokia has in the cellular phone marketplace. Nokia s official corporate culture manifesto since the 1990s is called the nokia way. Execute your strategic vision and dramatically improve business performance. Deloittes business model transformation consultants are ready to help you capture new growth opportunities, reduce costs, improve efficiencies, and stay ahead of consumer preferences. Findings the conceptual and historical work results in a process model of business model change. In this post, an apple change management case study, well examine the change management lessons from microsoft and apple. Harvards michael porter so an observer rather than practitioner on business models which is easy to find, practitione. Nokia was by no means a passive follower of the novel competitive. The strategic decisions that caused nokias failure. Nokia expanded its business from being a provider of mobile network services to covering the full range. 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. 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. In the context of our study of nokias business model transformation, relevant analytical levels consist of.
Download it once and read it on your kindle device, pc, phones or tablets. Noka apple handset revenue 20102012 the decline and resurrection of nokia is a classic story of corporate. How digital transformation drives business model change i. But since 2007, nokia had been operating its network infrastructure unit as a 5050 joint venture with siemens. Management books our free management books will guide you through the wealth of theory and practicalities of effective management. The radical business model transformation manoeuvres outlined in radical business model transformation make innovation the instantion of the business. Transformation is now an imperative for most companies, necessitating fundamental change in strategy, operating model, organization, people, and processes. 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. Arjo laukias research works aalto university, helsinki and. It was to mobile phones was kleenex is to facial tissues.
The authors are jaakko aspara, juhaantti lamberg, arjo laukia and henrikki tikkanen. 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. A business model that can link a new technology to an emerging market need is the key to industry transformation. The anatomy and causal structure of a corporate myth. There are fewer than youd expect from the vast heaps of business books with a couple of sentences of thought in 180300 pages.
When apple coupled the ipod with itunes, it revolutionized the. 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. Jul 15, 2016 a generation ago, a kodak moment meant something that was worth saving and savoring. 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. Swift transformation of corporatelevel business models is facilitated by a sophisticated management accounting system that allows the identification of. The great nokia turnarounduniversal business lessons for leaders in any industry nokia once dominated the smartphone industry. Business model transformation at nokia emerald group publishing. 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. Its useful to examine how others have approached change and transition. The next lesson is on one of the five classes of business models used in iot the service business model. The master of business model transformation 143 08 gase studies of companies radically shifting the level of customization 161 xerox. At the same time, the new ceo must reinvent the business model, enhance product and service offerings, and invest in other longterm initiatives.
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