The Nordic success model of globalization is unique. Whereas most small countries in the world have suffered from their openness, the Nordic countries have succeeded to reach the top in terms of GDP per capita (World Bank). The “Viking” recipe of success has been learning-by-doing, innovativeness and scale economies. The book portrays the Nordic man of action. Winning in global business has not so much to do with big strategies. What is more important is to focus on customers and their real needs as many Nordic companies have successfully done. Having brought fear and destruction in earlier times we “Vikings” have now made the transition to “humble” management.
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This book analyses the global economy from the viewpoint of innovative firms. The main contribution relates to the argument that the best way to solve the current and future challenges facing the global economy is through a better understanding of Schumpeterian entrepreneurship in its modern forms. Multinational companies sell global commodities and mass-customized products, often by utilizing general principles of applied microeconomics such as Porter’s matrix of generic strategies. Innovative (growth) firms are viewing their global markets from a bottom-up perspective. The resource-based (RBV) view is an important element of the bottom-up perspective and has become well suited to innovative firms when the industrial organization (IO) school is like tailored for big multinationals. The RBV and the IO dates back to the history of strategic management doctrine by Alfred Chandler, intended to deconstruct the black box of the economist’s production function into some more elemental components and interactions
In the Nordic countries a rapid deregulation of the ICT industry happed in the late 1980s. Being the first mover in digital mobile phones and shifting its focus to the opportunity share (Hamel and Prahalad, 1994, pp. 34-35), Nokia, the flagship of the Nordic firms, made bold leaps in the 1990s from a mass-producer of commodities (e.g. paper) to the absolute elite group of global high-tech firms. Nokia’s growth story is one of the most spectacular (Schumpeterian) cases over time. In terms of orthodox IO, Nokia jumped over market barriers in the way that should not be possible and that might have led to a devastating price competition in the oligopolistic market (Scherer and Ross 1990). By adapting Romer’s increasing return model, Nokia achieved an optimal market share on the global mobile phones markets (Buzzell and Gale, 1987). Tom Peters (Peters, 1990) debated about fragmented markets, referring to flexible with a wider variety of products to narrower markets. This was the market strategy that Nokia succeeded to implement. This book is based the writer’s own history and writings about the Nordic success stories that are useful to read.
- Impefect competition and economics
- Competition models
- Monopolistic competition theory by Edward Chamberlin
- Competition theories under debates
- Industrial organization (IO) economics
- The Structure-Conduct-Performance (SCP) paradigm
- The New IO approach
- The Finnish IO studies by Aalto
- Schumpeter-chamberlin management paradigm
- The Resource-Based View (RBV)
- Chamberlin-contribution: Strategic marketing doctrine
- Summary
- Monopolizing of market and the Chicago dominance
- Monopolistic competition: The German Nordic recipe
- The German-Nordic doctrine – my own experiences