Nokia - Finland

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Finland and Nokia:
Creating the world’s most competitive economy

MAN 865


Question 1

What were the primary sources of locational competitive advantage of Finland that enabled Nokia to build a global leadership position in mobile phones? Which of these characteristics resulted from explicit policy choices?

According to porter, “The wealth of a nation is not inherited, it is created.” Finland’s geographic location and its demographic makeup are largely responsible as a determinant in the model of Michael Porter’s Diamond of National Advantage. Finland is situated on the western side of Russia (a long time trade partner up until the collapse of the Soviet Union in 1989). The country is sparsely populated and has a population of approximately 5.9 million. For pragmatic reasons the Fins supports the adoption of wireless devices as the country has a first world economy and the resources to afford it and the climatic conditions supports phone- over face-to-face conversations. Approximately 92% of the population is able to speak Finnish and 6% speaks Swedish whilst approximately 2% are foreign citizens. 61% of the population resides in metros in the south and the rest are in rural areas. (background – can be deleted if number of words are exceded)
If Porters Diamond is analyzed the location of Finland becomes a driver for innovation for mobile telephony given the fact that that the country is basically covered with lakes which makes landline infrastructure enormously expensive and impractical. Finland through its cluster system, to increase Finnish competitiveness (which up until the late 1980’s) was state driven and thereafter private public partnerships was the frontrunner for innovation and had delivered a number of first i.e. first international infrastructure…...

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Finland and Nokia

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