Nokia has developed as a company whose strength lie in mass production and distribution. It origins are in simple products such as paper and rubber boots. These products are low tech and relatively easy to manufacture, thus a competitive advantage lies with those who can deliver the product cheaper then competitors. Nokia achieved these economies of scale through developing highly efficient manufacturing process conducted by high performance teams.

Nokia has internal culture and systems, which promote competition between internal groups. This results in positive outcomes from a cost / production point of view but is counter-intuitive and produces negative results for projects where collaboration is required, such as software development.
In environments where collaboration is required in order to roll out initiatives quickly, this internal competition work for Nokia. However in an environment where over arching systems are being rolled out successively by competitors, than this lack of internal cohesion works to Nokias disadvantage.

Before LUMIA - Economies of scale/ scope
1. Symbian – economies of scale with production of cheap handsets + Symbian operating system
2. Huge manufacturing platform, attractive Nordic design, effective logistics
3. Opportunity to team up with Microsoft prior to 2007 and continue focus on strengths, above, while Microsoft develops technology.

After LUMIA - Economies of scale

As smartphones are essentially hand held computers these days, a large portion of their value proposition is with software and application. By contracting Microsoft or android to supply software and operating systems, Nokia are relegated to being only a manufacturer of a product. There are pro’s and con’s to this approach.
Pros
1. Nokia can leverage on the intellectual property and software development expertise of the Microsoft or