The idea around value chain as expound in Porter's book involves “primary activities” that are deemed as value-adding activities of an organization which include the following: inbound logistics, production, outbound logistics, sales and marketing, maintenance.

Behind the “primary activities” are what you “support activities” that also add value to the organization. These functions are: administrative infrastructure management, human resources management, R&D, and procurement. The ultimate aim of value chain is to create maximum value at minimal costs (Wikipedia, 2005).

Value chain became a recognized management's powerful analysis tool for strategic planning. Kotelnikov (2001) defined value chain as a high-level model of how businesses receive raw materials as input, add value to the raw materials through various processes, and sell finished products to customers.

Value chain is critical tool to business development because it espoused the idea that, according to Kotelnikov (2001) “success in digital economy is the implementation of an integrated value chain that extends across - and beyond - the enterprise.” Hence, multiple value chain participants- from employees to managers to suppliers and to customers- must deliver value and strive for a common goal. Value chain then helps in

promoting understanding end-to-end process, spot anomalies, eliminates redundancy and inefficiencies allowing process design, transformation and experience take place freely and continuously (Kotelnikov, 2001).

Knowing what value chain can do, it is imperative then that Nokia, being a world leader in mobile communications, should implement value chain as a part and an important tool in its corporate strategy. Nokia aims to drive growth and sustainability of the broader mobility industry. It strives to connect people through innovative and user-friendly mobile phones, devices and solutions for imaging, games, media and businesses.

Nokia has products ranging from equipment, solutions and services that also cater to network operators and corporations (Nokia, 2005).

Patterns and trends in a constantly-evolving product such as mobile phones are very important to Nokia. Being ahead of its competitors and abreast with the changing needs of its customers is what keeps Nokia at the forefront of the mobile industry. Changes in the international business scene might influence the Nokia's value chain over the next five years or so. This is so because adapting to change and making necessary allocations for it is critical for Nokia's, or any company for that matter, survival.

Also, value chain is not contained within the individual's business alone. It also pertains to the supply chains and distribution networks. Delivering a combination of products and services to the end customer will create different economic actors along the way that have its own value chain. The synchronized interactions of those local value

chains lead to an extended value chain that could sometimes be global in extent (Wikipedia, 2005).

Changes that might affect Nokia's value chain could include the following:

Ever-Growing Need for Application Differentiation

U.S. mobile operators currently offer a number of premium mobile applications, accessed through handheld devices which are from various sources, qualified or certified, then offered access to the applications through a single interface for ease of use. To get a niche of the market, mobile operators must provide application differentiation because the same applications are available to other operators as well. To do this, increased investment in research and development for premium mobile data applications that aids in increasing non-voice data revenues is likely to aid mobile operators in dominating the expanding market (Frost and Sullivan, 2005).

Properly Targeted Applications Suite to Increase Operators' Data Revenues

Total penetration of mobile services in the United States has reached 65 percent which makes it difficult to secure potential of new subscriber. Mobile operators then turn to the existing subscriber base for revenue maximization opportunities such as providing premium data services. Since the focus of premium data services adds personal productivity and informational services to entertainment, mobile subscribers are expected to become increasingly dependent on these offerings. Proactive mobile operators that

address the changing needs of subscribers are believed to gain the most from this evolution (Frost and Sullivan, 2005).

Introduction of Next-generation Mobile Data Services

Innovation is a necessity in the mobile industry's growth. It is important then to differentiate and add value to products and services at the same time maintain end-to-end interoperability. Continued innovation in services and products such as additional mobile features, new applications and handsets is required for Nokia's growth in the mobile industry.

The shift towards next-generation technologies is evident in all sectors of the market. Both device manufacturers and subscribers are expected to gain from the implementation of these nascent technologies and applications in devices, which will in turn drive the expansion of the market (Frost and Sullivan, 2005).

Changes in Process Management

In a company, it is not possible to oversee all processes. Managers can only manage a narrow segment of a process. It is not possible to impose process design and make it work without assistance. This is why it is important for Nokia management to support and empower employees from the rank-and-file to the top of the echelon to deliver process work or a high level of performance focused on customers. Having an excellent business process in place provides greater clarity on strategic direction and cascade it through your organization (Kotelnikov, 2001).

Risk Management

As the business grows so do the risks involved. Nokia must anticipate and address these risks effectively. Risk management is one aspect that enables Nokia to accomplish this. Nokia as an international company encounters a number of risks in its operations such as engagement with governments and authorities to avoid legislation that is counter-productive for society or anti-competitive; supply-chain management to reduce risks to quality or productivity; management of conflicts of interest for employee satisfaction and to protect the brand (Nokia, 2005). Coming up with solutions on how to address these possible risks is one way of achieving value chain for the business.

Boosting Service-Profit Chain

This refers to the people in the chain, meaning, both employees and customers. It is important for powerful companies such as Nokia to keep in mind that creating a harmonious link between the two - employees and customers - is important influence in company's performance and boost profits (Kotelnikov, 2001).

Changes in Waste Reduction Methods

In most production operations, only a small part of the total time and effort actually add value to the end customer. Clearly defining "value" for a specific product or service using the end customer's perspective, all the non-value activities - or waste - can be targeted for removal step by step (Kotelnikov, 2005).

According to Kaizen, the Japanese strategy of continuous improvement, the main seven wastes are:

• overproduction,
• transportation,
• motion,
• waiting,
• processing,
• inventory, and
• defects

The future of the logistical operations of NOKIA such as procurement, distribution, maintenance and replacement of material and personnel is influenced by the changes cited above.

Future logistical operations of Nokia will have to make room for the necessary changes.

Raw materials procurement, for instance, requires sourcing of the latest materials needed for its plan to achieve differentiation. Also, wastes in transforming these raw materials to finished products should be monitored and if possible, completely eliminated.

Customer service of Nokia must focus on the key elements which are personnel and end-customers. Nokia must improve relations with both to achieve greater competence.

Billing service is one aspect of customer service they need to attend to. With new and faster technologies in place, customer billing will be greatly facilitated.

Distribution of new products might follow a different pattern. The difference could take the form of new set of target market or coming up with new promos and advertisements to attract existing users.

Maintenance of equipments could also be another aspect to look into. As the products evolve, the need for new and better equipment also follows. Replacement of material and personnel could be another matter to consider. New materials must be added or replace the old parts. Just as new personnel would be required to implement the latest changes at the same produce a better version of the old Nokia product. Learning better risk management could make the transition effortless for the giant company, Nokia.

Nokia as a business should evolve with the times. Nokia must learn to look into the different aspects of its value chain that could be improved and make necessary changes. Improving its value chain could spell the difference of profit or loss. And its results is often reflected in the income statement and balance sheet.

After all the survival of Nokia in a very fast-paced environment such as mobile industry could depend on its ability to look “after the markets they operate in, to anticipate risks, demonstrate company values, work at increasing employee satisfaction, enhance corporate governance principles, protect the Nokia brand and build a reputation for citizenship” (Nokia, 2005).