Nokia operates in the mobile phone industry value chain by manufacturing handsets and selling them to mobile service providers. It relies on component vendors to supply parts for assembly but has little control over the final handset price set by service providers. Nokia aims to create value through efficient primary activities like logistics, operations, and service, supported by infrastructure, HR management, technology development, and procurement functions. By analyzing costs across its value chain, Nokia seeks competitive advantages through lower costs or product differentiation.

1. Value chain and competitive
advantage The Coca-Cola Company
Teory Michael Polter
Nama :Aprilia Rotama – 224409125
Kelas/Semester : S1 MLM B 2009/V
Dosen Pembimbing : R. Didiet Rachmat Hidayat
Mata Kuliah : Distribution Management
Sekolah Tinggi Manajemen Transpor
TRISAKTI
Jln. IPN No. 2 Cipinang Besar Selatan, Jakarta Timur
Tlp (021) 8516050, Fax 856934

2. The Nokia story
Once upon a time, by the Nokianvirta river…
In 1865, mining engineer Fredrik Idestam sets up his first wood pulp mill at the Tammerkoski
Rapids in south-western Finland. A few years later he opens a second mill on the banks of the
Nokianvirta river, which inspires him to name his company Nokia Ab in 1871. How apt that
Nokia begins by making paper – one of the most influential communications technologies in
history.
The galoshes revolution
OK, so it‟s not exactly a revolution. But in 1898, Eduard Polón founds Finnish Rubber
Works, which later becomes Nokia‟s rubber business, making everything from galoshes to
tyres. Nokia rubber boots become a bona fide design classic, still on sale to this day – thought
we no longer make them.
Electronics go boom
In 1912, Arvid Wickström sets up Finnish Cable Works, the foundation of Nokia‟s cable and
electronics business. By the 1960s, Finnish Cable Works – already working closely with
Nokia Ab and Finnish Rubber Works – starts branching out into electronics. In 1962, it
makes its first electronic device in-house: a pulse analyser for use in nuclear power plants.
In 1963, it starts developing radio telephones for the army and emergency services – Nokia‟s
first foray into telecommunications. In time, the company‟s MikroMikko becomes the best

3. known computer brand in Finland. And by 1987, Nokia is the third largest TV manufacturer
in Europe.
Three become one
Having been jointly owned since 1922, Nokia Ab, Finnish Cable Works and Finnish Rubber
Works officially merge in 1967. The new Nokia Corporation has five businesses: rubber,
cable, forestry, electronics and power generation. But as the 1980s come into view, it‟s an
entirely new industry that makes Nokia a household name around the world.
INTRODUCTION
Nokia is currently the largest mobile phone manufacturer in the world. With sales of $27 bn
in 2000, it has about twice the market share of its closest rival, BLACKBERRY and
SAMSUNG. While it is in a very strong leadership position right now, the future of the
company is in balance as the industry matures. The slowdown in the economy has affected
new subscriber growth, while handsets are increasingly becoming a commodity item with
little to distinguish between different brands. At the same time, huge investments need to be
made to upgrade to 3G technologies. In the midst of all this turmoil, it is interesting to see
how Nokia will be able to maintain its brand image and customer loyalty, factors that have
traditionally been its strong points.
Headquartered in Finland, Nokia‟s business is divided into four divisions:
Nokia Mobile Phones
Nokia Networks

4. Nokia Ventures Organizations
Nokia Research Center
In this report, however, we analyze the U.S. mobile phones business of Nokia. The initial
sections of our report focus on the mobile phone industry in general and Nokia‟s market
strategy till now. We then analyze the current industry trends and make recommendations to
Nokia about their future strategy. Briefly, these are to resist commoditization, concentrate on
the replacement market, enable data-driven services and finally to focus on the CDMA
market in the longer term.
We believe rethinking their marketing strategy will enable Nokia to remain the dominant
player in the handset market as mobile communications enter the next generation.
INDUSTRY OVERVIEW
Value Chain
Mapping of Business Processes
mapping the business process is useful for analyzing the specific activity in NOKIA company
so later to get the value and benefits specific to perusahaan.jika mapped into "porters value
chain" then the specific activity that occurs in NOKIA company can be described as can be
seen as the image below.
Michael Polter
The goal of these activities is to offer the customer a level of value that exceeds the cost of
the activities, thereby resulting in a profit margin.
The primary value chain activities are:

5. Inbound Logistics: the receiving and warehousing of raw materials, and their
distribution to manufacturing as they are required.
Operations: the processes of transforming inputs into finished products and services.
Outbound Logistics: the warehousing and distribution of finished goods.
Marketing & Sales: the identification of customer needs and the generation of sales.
Service: the support of customers after the products and services are sold to them.
These primary activities are supported by:
The infrastructure of the firm: organizational structure, control systems, company
culture, etc.
Human resource management: employee recruiting, hiring, training, development, and
compensation.
Technology development: technologies to support value-creating activities.
Procurement: purchasing inputs such as materials, supplies, and equipment.
The firm's margin or profit then depends on its effectiveness in performing these activities
efficiently, so that the amount that the customer is willing to pay for the products exceeds the
cost of the activities in the value chain. It is in these activities that a firm has the opportunity
to generate superior value. A competitive advantage may be achieved by reconfiguring the
value chain to provide lower cost or better differentiation.
The value chain model is a useful analysis tool for defining a firm's core competencies and
the activities in which it can pursue a competitive advantage as follows:
Cost advantage: by better understanding costs and squeezing them out of the value-
adding activities.
Differentiation: by focusing on those activities associated with core competencies
and capabilities in order to perform them better than do competitors.
The Value Chain System
A firm's value chain is part of a larger system that includes the value chains of upstream
suppliers and downstream channels and customers. Porter calls this series of value chains the
value system, shown conceptually below:

6. The Value System
…. Supplier Firm Value Channel Buyer
value chain Chain Value Chain Value Chain
Linkages exist not only in a firm's value chain, but also between value chains. While a firm exhibiting
a high degree of vertical integration is poised to better coordinate upstream and downstream activities,
a firm having a lesser degree of vertical integration nonetheless can forge agreements with suppliers
and channel partners to achieve better coordination. For example, an auto manufacturer may have its
suppliers set up facilities in close proximity in order to minimize transport costs and reduce parts
inventories. Clearly, a firm's success in developing and sustaining a competitive advantage depends
not only on its own value chain, but on its ability to manage the value system of which it is a part.
Specific activity at NOKIA divided into 2 types, namely:
Primary activities Supported activities
1. inbound logistics, activities associated 1. procurement, relating to the acquisition
with handling the material prior to of inputs / resources.
use.
2. operations, activities associated with 2. human resources management, HR
the processing of input into output. management from recruitment,
compensation until stoped.
3. outbound logistics, activities 3. tecnologycal development, development
undertaken to deliver the hands of tools, software, hardware, procedures,
customers' products. in the transformation of inputs into
output products.
4. service, activities that maintain or 4. firm insfrastucture, composed of
improve the product. departments, functions (accounting,
finance, planning, etc.) that serve the
needs of the organization.

7. Firm insfrastucture technology NOKIA HumanResources NOKIA
Service Maintenance Proses NOKIA
To fully understand Nokia‟s position in the mobile telephony industry, we must first assess
the industry value chain (Fig. 2). Handset end- users do not purchase directly from Nokia –
instead, they enroll in cellular calling plans from service providers. Nokia sells its phones to
the mobile service provider after building each handset using many components
manufactured by other vendors. This position puts Nokia at a negotiating disadvantage,
where it is constrained by the costs of the handset components themselves, while it is
simultaneously at the mercy of the service provider when selecting a handset selling price.
Component Handset Service Consumers
Vendors Makers Providers
Motorola Nokia AT&T Wireless
Phillips Motorola Sprint CPS
Texas Instr. Ericsson Cingular
Qualcomm Siemens Verizon wirleess
Cypress Samsung Voicestream
RF Microdevices Other Other
Others

8. Fig.2
PORTER’S 5 FORCES MODEL : NOKIA
THREAT OF NEW ENTRANTS
PATENTS, RIGHTS BRAND BUILDING
ABSOLUTE COST ADVANTAGE STRONG
DISTRIBUTION CHAIN
high
COMPETITIVE RIVALRY
SUPPLIER/FIRM SWITCHING COST MOTOROLA,SONY-ERRICSON GROWING BARGAINING LEVERAGE
SUBSTITUTE INPUTS SUPPLIER TO MOBILE INDUSTRY DIVERSITY IN THE PRICE SENSITIVITY
FIRM RATIO INDUSTRY INTENSE ADVERTISING SUBSTITUTES
low high high
BARGAINING POWER OF CUSTOMERS BARGAINING POWER OF SUPPLIERS
RELATIVE COST PERFORMANCE BUYER
TENDANCY
high
THREAT OF SUBSTITUTE PRODUCTS
Suppy chain in NOKIA
Strategy & reports NOKIA
Related links
Supply chain
Sustainable devices
United Nations Global Compact
At Nokia, we love the future – it‟s what our strategy is all about. With our strategy, we aim to
lead in sustainability for the people and the environment.

9. Social strategy: empowering people
Over a billion people in the world use a Nokia phone. So we have a unique opportunity to
make differences that go beyond our own activities, to improve people‟s livelihoods, educate
and encourage more sustainable lifestyles.
Environmental strategy: minimising negative impact, maximising positive impact
We aim to lead in the reduction of any negative environmental impact. We have a user base
of more than one billion people which means that we have a unique opportunity to make an
impact that goes beyond our own activities. That‟s why we aim to offer people products and
solutions that help them make sustainable choices. Also, by closely collaborating with our
suppliers, we also hope to improve the environmental performance of our supply chain.
Products with sustainability: life cycle thinking
Our environmental work is based on considering the environment during the entire life cycle
of all our products, which begins with the extraction of raw materials for production, and
continues with recycling, treatment of waste, and recovery of used materials.
Beyond requirements
Our environmental targets are never driven simply by regulatory compliance – they actually
go beyond legal requirements. Environmental issues are everyone‟s responsibility at Nokia –
they are a part of everything we do.
NOKIA MARKETING STRATEGY
To provide context to the recommendations discussed in this paper, an analysis of the key
strengths of its current marketing strategy is imperative. Specifically, an understanding of its
recent success provides hints regarding the particular competencies that Nokia should
leverage as it develops a strategy to maintain market leadership and profitable growth.
Nokia is currently the world‟s largest mobile phone manufacturer, with 64.4% of the
GSM/TDMA market and 2.9% of the CDMA market6. Despite the argument that the U.S.

10. handset market is about to follow in the footsteps of the PC industry – in which the product is
becoming increasingly commoditized – Nokia has thus far managed to establish a powerful
brand that has been widely recognized as the key to its recent successes. It has been ranked as
the world‟s fifth most valuable brand, following Coca-Cola, Microsoft, IBM, and Intel7. The
Nokia brand is an asset that has been carefully cultivated during the past ten years,
throughout which the company has managed to predict and satisfy consumers‟ needs and
preferences ahead the competition.
In 1989, Matti Alahuhta developed a new strategy for Nokia that focused on three key points:
the development of a product with global appeal
nimble movement to sell it internationally
most importantly, a commitment to learning what consumers want, without
consideration of the limits of existing technology
By 1990, Nokia had already begun to identify some of the features that would eventually
establish it as the leader in setting industry benchmarks. The Nokia 2110, launched that year,
gained popularity with a large screen, elegant design, and a clean user interface. During the
early 1990s, Frank Nuovo, head of Nokia‟s worldwide design team, led Nokia to design
phones that offered customizable rings, elliptical designs, and custom faceplates. Although
such features may appear trivial or obvious in hindsight, Nokia continued to gain market
share by paying attention to the details that worked to enhance ease of use and customizable
preferences.
The insight that the handset could be a stylish fashion accessory, rather than merely a
communication tool, allowed Nokia to lead the trends and direction of the entire handset
industry. In addition to a superior design effort, Nokia assembled a diverse team to research
how consumers can use its phones. The team consisted of engineers, graphic designers,
sociologists, psychologists, and even a theatre director. While they‟ve designed similar,
easily recognized handsets, Nokia has successfully segmented the market to targe t specific
demographic groups. For example, in the year 2000, different phones were marketed to
appeal to the “rugged” user, the “sophisticated” user, and the youth market, among others.
With all these product innovations, designed to satisfy customer preferences, Nokia has
reinforced its brand image of providing cutting-edge communications technology. Analysts
have positively characterized the company by describing it as “young, sexy, sophisticated,
hip and generally „with it.‟” Alternatively, they‟ve compared Ericsson as an “austere,
conservative, middle-aged Swedish engineer,” which supports the widely held belief that

11. Ericsson‟s handsets are unfashionable. Since Motorola lethargically moved from analog to
digital phones, Nokia was able to overtake them as the leader in the handset market by 1998.
Subsequently, Nokia leveraged its superior marketing strategies and powerful brand to avoid
the price wars that have recently afflicted its key competitors.
STREAMLINGING LOGISTICAL TO CREATE VALUES IN NOKIA
Nokia was founded in 1865 in Nokia Finland as a timber and paper company. One could say
Nokia from the beginning was a communication company. On the turn of the century the
company started producing rubber. It was not until the 1960s when Nokia started the
electronic venture. It was only in 1987 that with their major acquisition they brought the
venture into reality and entered the electronic competition. With a rapid growth Nokia
became one the leading European electronic companies. To increase profit Nokia was divided
into five business groups which Nokia Mobile Phone is one of them. According to the case
"in 1990, 68% of Nokia's sales came from electronics, compared with only 10% on 1980. " .
Nokia's global competitions at the time were Motorola, Nov Atel, NEC, Panasonic,
Mitsubishi, Phillips and Ericsson. Motorola, the industry's leader was "engaged in the design,
manufacturing and sales of electronics" .
After having several years of growth, Nokia was facing a challenging year. In 1991 Jorma
Ollila began his strategy meeting with his executives began by saying with communication
industry transforming so rapidly the competition is intensifying and old technology is
becoming obsolete very quickly. Also since the world of technology changing constantly, it is
becoming more challenging for Nokia Mobile Phone to maintain dominant world class
manufacturer of mobile phone. With that said, they knew they has to react so they applied the
concept of "Dominance or Death" meaning it was time to change they way they ran things.
Nokia at that time was facing many challenges other that the fact of the global and local
competitors. Among the challenges were logistics, miscommunication, processing, and
manufacturing. Manufacturing all by itself consisted was a hassle from purchasing, assembly,
packing, sales and distribution.
Key Decisions Facing Nokia
Nokia is confronted with the age-old question of how to maintain growth as the market
reaches maturity. It has the advantages of scale, experience, and name recognition, but will it

12. be nimble enough to adjust with the changing industry landscape? A number of forces in the
mobile phone industry do not bode well for Nokia. These include commoditization of the
handset, impending saturation of the U.S. market, slow emergence of a single standard for
third-generation technologies, and the possibility of the handset becoming integrated with
other devices. As mobile phones approach the end of their growth phase in the U.S. market,
Nokia faces a number of strategic decisions about where to focus its priorities. Should Nokia
continue building its brand when there may not even be a handset in ten years? Should Nokia
try to be the Dell of the handset market and compete solely on cost? Which customers should
it target – first-time buyers or the replacement market? On which technology should it focus
its resources?
Competitive Advantage NOKIA
Porter's Generic Competitive Strategies
When a firm sustains profits that exceed the average for its industry, the firm is said to
possess a competitive advantage over its rivals. The goal of much of business strategy is to
achieve a sustainable competitive advantage.
Michael Porter identified two basic types of competitive advantage:
cost advantage
differentiation advantage
A competitive advantage exists when the firm is able to deliver the same benefits as
competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of
competing products (differentiation advantage). Thus, a competitive advantage enables the
firm to create superior value for its customers and superior profits for itself.
Cost and differentiation advantages are known as positional advantages since they describe
the firm's position in the industry as a leader in either cost or differentiation.
A resource-based view emphasizes that a firm utilizes its resources and capabilities to create
a competitive advantage that ultimately results in superior value creation. The following
diagram combines the resource-based and positioning views to illustrate the concept of
competitive advantage.
A Model of Competitive Advantage

13. Resources and Capabilities
According to the resource-based view, in order to develop a competitive advantage the firm
must have resources and capabilities that are superior to those of its competitors. Without this
superiority, the competitors simply could replicate what the firm was doing and any
advantage quickly would disappear.
Resources are the firm-specific assets useful for creating a cost or differentiation advantage
and that few competitors can acquire easily. The following are some examples of such
resources:
Patents and trademarks
Proprietary know-how
Installed customer base
Reputation of the firm
Brand equity
Capabilities refer to the firm's ability to utilize its resources effectively. An example of a
capability is the ability to bring a product to market faster than competitors. Such capabilities
are embedded in the routines of the organization and are not easily documented as procedures
and thus are difficult for competitors to replicate.
The firm's resources and capabilities together form its distinctive competencies. These
competencies enable innovation, efficiency, quality, and customer responsiveness, all of
which can be leveraged to create a cost advantage or a differentiation advantage.

14. Cost Advantage and Differentiation Advantage
Competitive advantage is created by using resources and capabilities to achieve either a lower
cost structure or a differentiated product. A firm positions itself in its industry through its
choice of low cost or differentiation. This decision is a central component of the firm's
competitive strategy.
Another important decision is how broad or narrow a market segment to target. Porter formed
a matrix using cost advantage, differentiation advantage, and a broad or narrow focus to
identify a set of generic strategies that the firm can pursue to create and sustain a competitive
advantage.
Value Creation
The firm creates value by performing a series of activities that Porter identified as the value
chain. In addition to the firm's own value-creating activities, the firm operates in a value
system of vertical activities including those of upstream suppliers and downstream channel
members.
To achieve a competitive advantage, the firm must perform one or more value creating
activities in a way that creates more overall value than do competitors. Superior value is
created through lower costs or superior benefits to the consumer (differentiation).
Recommended Reading
Porter, Michael E., Competitive Advantage: Creating and Sustaining Superior Performance
In Competitive Advantage, Michael Porter analyzes the basis of competitive advantage and
presents the value chain as a framework for diagnosing and enhancing it. This landmark work
covers:
The 10 major drivers of the firm's cost position
Differentiation with the buyer's value chain in mind
Buyer perception of value and signals of value
How to defend against substitute products

15. The role of technology in competitive advantage
Competitive scope and its impact on competitive advantage
Implications for offensive and defensive competitive strategy
Competitive Advantage makes these concepts concrete and actionable. It rightfully has earned
its place in the business strategist's core collection of strategy books.
Product differentiation
Product differentiation in smartphone is achieved thought lost of application, service and
product experience . As one manufacturer of mobile phones or mobile phones, Nokia is one
of the favorite and best-selling products, especially in our country Indonesia. So I'm sure
everything is familiar with and knew even have a phone that simple.As comparison, Nokia
Ovi Maps will probably provide a richer experience to you, but sometimes a little bit over the
top even if only to discover that the address in the map is clear.
Nokia Ovi Map've announced that they will free navigation service that staying navigation
service will compete with Google Maps Navigation (on the device Android). But is this
enough to make the dedication of Ovi Maps is able to invite all users to use a Nokia mobile
phone and use its services?
Paseban test Ovi Maps on your Nokia E72, a QWERTY phone that has a screen size of 26.3
inches. One drawback of this service is where this service has the distinction depends on what
device is used. Cell phones are used by Paseban, Nokia E72 is a phone that has GPS
capabilities, but offers no benefits from this large screen size. Before installing them, you
also need to consider several things, including if you try to use it might at least have an
impact on the experience of GPS devices on mobile . also comprehensive maps, which offer
quality 2D and 3D views. Options to connect to several menu options available such as
Weather, Events, Lonely Planet and Michelin, is an attractive option indeed, but you need to
remember is these menus will incur roaming charges if you are abroad.

16. The Symbian platform was created by merging and integrating software assets contributed
by Nokia, NTT DoCoMo, Sony Ericsson and Symbian Ltd., including Symbian OS assets at
its core, the S60 platform, and parts of the UIQ and MOAP(S) user interfaces.
In December 2008, Nokia bought Symbian Ltd., the company behind Symbian OS;
consequently, Nokia became the major contributor to Symbian's code, since it then possessed
the development resources for both the Symbian OS core and the user interface. Since then
Nokia has been maintaining its own code repository for the platform development, regularly
releasing its development to the public repository. Symbian was intended to be developed by
a community led by the Symbian Foundation, which was first announced in June 2008 and
which officially launched in April 2009. Its objective was to publish the source code for the
entire Symbian platform under the OSI- and FSF-approved Eclipse Public License (EPL).
The code was published under EPL on 4 February 2010; Symbian Foundation reported this
event to be the largest codebase transitioned to Open Source in history. However, some
important components within Symbian OS were licensed from third parties, which prevented
the foundation from publishing the full source under EPL immediately; instead much of the
source was published under a more restrictive Symbian Foundation License (SFL) and access
to the full source code was limited to member companies only, although membership was
open to any organisation.
In November 2010, the Symbian Foundation announced that due to a lack of support from
funding members, it would transition to a licensing-only organisation; Nokia announced it
would take over the stewardship of the Symbian platform. Symbian Foundation will remain
the trademark holder and licensing entity and will only have non-executive directors
involved. On February 11, 2011, Nokia announced a partnership with Microsoft which would
see it adopt Windows Phone 7 for smartphones, reducing the number of devices running
Symbian over the coming two years. As a consequence, the use of the Symbian platform for
building mobile applications dropped rapidly. A June 2011 research indicated that over 39%
of mobile developers using Symbian at the time of publication, were planning to abandon the
platform. By April 5, 2011, Nokia ceased to open source any portion of the Symbian

17. software and reduced its collaboration to a small group of pre-selected partners in Japan.
Source code released under the EPL remains available in third party repositories
WhatsApp Messenger is a cross-platform mobile messaging app which allows you to
exchange messages without having to pay for SMS. WhatsApp Messenger is available for
iPhone, BlackBerry, Android and Nokia and yes, those phones can all message each other!
Because WhatsApp Messenger uses the same internet data plan that you use for email and
web browsing, there is no cost to message and stay in touch with your friends.
In addition to basic messaging iPhone, Android, Nokia and BlackBerry WhatsApp
Messenger users can send each other unlimited images, video and audio media messages.
Cost differentiation
The operating profit of all the leading mobile manufacture is
NOKIA 30.7
APPEL 36.4
SAMSUNG 13.3
RIM 15.4
LG 4.2
HTC 5.1
MOTOROLA 0.1
SONNY ERICSSON 0.1
A Strategy for Competitive Advantage
Cost analysis has traditionally focused on attention to the value added by the occurrence of
errors and that it is the only area where companies can affect costs.
Value added is becoming obsolete with the reasons:
1. The existence of different treatment between raw materials and the purchase of some other
input.
2.Value added can not signify the things that potential to be associated with a view to

18. reducing costs or creating product differentiation.
3. Competitive advantage can not be used fully with the interaction between the raw
materials purchased by other costs.
Conclusions
Nokia has built a strong value network around one of its product lines, namely mobile
phones.This is the real key to its success. It has learned to focus on its core competencies
while partnering with best-in-world players in selected areas to bring the best customized
mobile phones to market, as quickly as possible and at the lowest possible price. Activities
along the product value chain are performed by the organizations with the very best know-
how and expertise. The overall coordination and optimization of the product value chain is,
however, ultimately the responsibility of the Finnish manufacturer.
Nokia seems to ride rather smoothly over today‟s three competitive forces since it
demonstrates:
(i) a strong focus on knowledge-based activities while practising the art of
“coopetition”
(ii) an ongoing concern with velocity that results in a balancing act between
the nimportance of physical proximity and reliance on electronic means for
virtual activities performed in geographically dispersed regions;
(iii) a well-thought-out market strategy where the mobile phone is positioned
as ahightech, high-fashion and personalized device which gives final
customers specialized, customized services.
The Finnish company performs well in a highly dynamic environment. To some extent, it has
already shaped the future of mobile devices (and consequently PCs). Will its leadership
position be challenged within the next decade? Competition among industry leaders will
undoubtedly be fierce.
As we have shown, Nokia must rethink its strategies if it is to remain successful. The recent
economic slowdown coupled with impending market saturation and the demand for increased
functionality, is beginning to dramatically change the handset market.

19. Nokia should take aggressive measures to resist commoditization if it is to grow and continue
being profitable. We have outlined some ways that it can accomplish this. Its brand has
proven to be one of its most valuable assets, and Nokia should continue building it. Nokia
must also thoroughly research evolving customer needs and provide a positive impetus for
brand differentiation. Finally, by forming strategic alliances with industry and service
providers, Nokia can ensure and maximize its visibility to the end- user.
Nokia also needs to bring new products to market, and, as the market is showing signs of
saturation, shift its focus onto the replacement market. This means developing data-driven
services and appropriate partnerships with content providers. There simply needs to be an
incentive for existing handset owners to purchase a new Nokia handset.
Finally, Nokia should secure its long-term position by placing more R&D and marketing
emphasis on CDMA, as opposed to its current core market of TDMA. CDMA will form the
basis of third-generation mobile technology, and it would be an advantage to be seen as an a
priori leader in this domain.
While Nokia‟s future – and indeed that of the entire mobile communications industry – is
growing more uncertain, Nokia is not doomed yet. As long as Nokia is open to reworking its
marketing strategies, it stands a good chance of remaining the dominant player in the handset
market and perhaps even generating larger revenues.
It can be concluded, that the methodology to create and use value chain includes the steps of:
1. Identifying the value chain of the industry, then make a list of costs, revenues, and
assets for each activity
2. Identify cost drivers are set each value activity.
3. Building sustainable competitive advantage, either by controlling the cost drivers
better than competitors or with rekonfiguration value chain.
Finally in closing, value chain perspective can be used to reduce some of the following
views:
Value chain analysis as a first step of understanding how the company's position in
the industry
Once the value chain is fully articulated, strategic decisions are critical to more clearly
Value chain analysis helps to measure the power supplier with manghitung percentage
of total profits attributable to the supplier

20. Value chain framework to explain how the company's products according to buyer's
value chain
In the final analysis, the simultaneous achievement of low cost and differentiation
depends on an adequate understanding of the drivers of cost, income, and assets in
each value activity and interdepedensi among value activities.