Illustration 4.

5 Dynamic capabilities (and rigidities)

in mobile
Dynamic capabilities can help firms sense and seize opportunities and
reconfigure

Companies in the mobile telephone industry have built and radio capabilities. However,
they
on their dynamic capabilities in their effort to adapt to these early mobile telephone capabilitiesremained
stuck
i
and were
environmental changes. They have identified and evalu- by Nokia. Nokia sensed new
opportunities as followed
ated new opportunities (sensing); addressed these with new that mobile phones' awkward design it
and
were not suited to what had become a
mass
bilities accordingly (reconfiguring), as illustrated in the table. fashion market. The company seized these consumer and
newopportun.
The pioneers in mobile telephony, Ericsson and Motorola, ities, offering improved designs and functionality.
However
managed to sense and explore an entirely new mobile tele- they later suffered as they were unable to
reconfiguretheir
phony market. They satisfied and captured value in that product design and mobile operating system
capabilities
market by recombining and redeploying telecommunication further.

o
o

o
Z euedX

a:

pricedsegment
Apple, with a long legacy in consumer electronics prod- further to capture value in the premium established
ucts, explored additional opportunities. They realised that via their Galaxy phones and successfully
moreproductivi-
market leadership position in a new (combining
category become
tained a complex and unintuitive interface with limited ty-oriented phablets smartphone
They have
multimedia functionalities. Apple addressed this by intro- the size format of phones and tablets). Huawei andApple
ith
ducing an upgraded multimedia platform smartphone number one in smartphone sales w
with an intuitive and simple interface combined with as two and third. phone
helped mobile
complementary services like the App Store and iTunes. While dynamic capabilities keeping
guarantee forbecoming
They built on a recombination of its prior design, interface companies to adapt, they are no risk
develop
and consumer behaviour capabilities and (for them) new ahead as the ordinary capabilities they move fast.compa-
mobile phone capabilities. They, in turn, were followed by rigidities when markets and technologies quickly; otherwise
Samsung, which used their digital electronics capabilities nies need to detect and alleviate rigidities opriate capabilities
and the open innovation model of Google's Android oper- competitors may emerge with more appr
ating system (OS). Samsung transformed their capabilities in a constantly changing environment.

118
 Chapter 4 Resourcesand capabilitiesanalysis

Illustration 4.5 Dynamic capabilities (and rigidities) in mobile

Dynamic capabilities can help firms sense and seize opportunities and reconfigure

Companies in the mobile telephone industry have built and radio capabilities. However, they
on their dynamic capabilities in their effort to adapt to these early mobile telephone capabilities remainedstuck
and
environmental changes. They have identified and evalu- by Nokia. Nokia sensed new opportunities Werefollowed in
ated new opportunities (sensing); addressed these with new that mobile phones' awkward design as it
and
products (seizing) and renewed and redeployed their capa- were not suited to what had become a functionality
massconsumer
bilities accordingly (reconfiguring), as illustrated in the table. fashion market. The company seized t and
hese new
The pioneers in mobile telephony, Ericsson and Motorola, ities, offering improved designs and opportun.
functionality.
managed to sense and explore an entirely new mobile tele- they later suffered as they were unable to However,
phony market. They satisfied and captured value in that product design and mobile operating system reconfigure
their
market by recombining and redeploying telecommunication capabilities

O
o

2 euedx o

Apple, with a long legacy in consumer electronics prod-

further to capture value in the premium priced segment
ucts, explored additional opportunities. They realised that
via their Galaxy phones and successfully established
most phones, even the improved 'smartphones', still main-
marketleadershipposition in a new more productivi-
tained a complex and unintuitive interface with limited
multimedia functionalities. Apple addressed this by intro-
ty-oriented phablets smartphone category (combining
ducing an upgraded multimediaplatform smartphone the size format of phones and tablets). They havebecome
with an intuitive and simple interface combined number one in smartphone sales with Huawei and Apple
with as two and third.
complementary services like the App Store and phone
iTunes. While dynamic capabilities helped mobile
They built on a recombination of its prior design, keeping
and consumer behaviour capabilities and (for interface companiesto adapt, they are no guarantee for
them) new ahead as becoming
mobile phone capabilities. They, in turn, were followed the develop risk
ordinary capabilities they Compa-
;amsung, which used their digital electronics by rigidities when markets and technologies move fast.
capabilities otherwise
ind the open innovation model of Google's nies need to detect and alleviate rigidities quickly;
capabilities
iting system (OS). Samsung transformed Android oper- competitors may emerge with more appropriate
their capabilities
in a constantly changing environment.

18
 Approximate Dynamic
time period capabilities
Companies Product Sensing seizing Reconfiguring
Ericsson Mid-1980s—late Mobile phones Need for mobile Creating the first Opening the mobile
(primarily 1990s telephones: Fixed mobile telephone telephone market
Europe) telephony not systems and Acquiring and building
Motorola offering mobility telephones mobile telephone
(primarily capabilities
the US)
Nokia Late 1990s—early Mobile phones Need for Upgrading the Entering mobile
2000s with improved well-designed and mobile phone to telephones
design and fashionable mobile provide a richer Acquiring and building
functionality phones: Existing experience in mobile telephony
ones were close design, fashion capabilities
'to their car-phone and functionality Building design and
origins and marketing capabilities
maintained their
awkward design and
functionality
Apple Late 2000s— Smartphones Need for phones Upgrading the Entering mobile
(iPhone) with perfected with multimedia mobile phone telephones
design, functionality: to include an Acquiring mobile
functionality and Existing ones intuitive interface telephony capabilities
interface maintained a and multimedia and recombining
complex and functionalities them with existing
unintuitive interface containing the design and interface
with limited App store, iTunes capabilities Integrating
functionalities with capabilities from
music and phone app
developers
Samsung ca.2010- Smartphones Need for open Upgrading Using Android
based on connectivity smartphones with OS capabilities in
Google's between devices Android and new combination with
Android OS and co creation chip hardware existing product design
with broader of apps compared features including and marketing phone
interconnectivity, to Apple's (early) larger displays capabilities
more apps and closed connectivity and pen pointers, Creating new
bigger displays iris scanners and chipmaking technology
foldable displays capabilities
Source:Prepared by Patrick Regnér, Stockholm School of Economics and Muhammad Amjad, Salford Business
School, University of Salford.

Questions
1 What type of dynamic capabilities could help smartphone companies avoid becoming
stuck in their old resources and
capabilities?
2 Why is it difficult for some firms to successfully seize opportunities and reconfigure their capabilities?
3 a Can you sense any possible future opportunities in smartphones?
b How could they possibly be seized and developed (reconfigured) by the smartphone companies?