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Learning from evolutionary biology for understanding what was happening in mobile phone business.
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Summary
• Apple iPhone took a strategy of K-Selection at 2007. Risky but nothing too much to loose. Successfully invaded and disturbed the market quickly.
• iPhone shocked in the eco system. It was too big to be dominated by iPhone alone.
• iOS and Android had expanded their eco system over the market at full potential growth rate.
Why Biology is important for us?
• We may learn something from Biology. • Especially, from the
evolutionary biology.
• Evolutionary biology and a little bit of math!
Live long and prosper
• All creatures want to live long and be prosperous.
Ecologic world of mobile phone
• What happen in 2007?• Even after the radical innovation
comes, old is still good for awhile. A chance of change may be given but it looks too dangerous.
“Awesome!”2007 June
That was an invasion by a new species.And it becomes dominant species.
Invasive species : European rabbit infestation in Australia
• Disrupt ecosystem• Cause species loss• Consume all resources• Change landscape
Exponential Growth
• Also known as a J-curve• Growth is a fixed percentage of
the whole (e.g., 10% per day or year)• Population is growing at its full
biotic potential
Logistic Growth• Also known as S-curve• Growth slows as the population
approaches Carrying Capacity• Populations stabilize at carrying
capacity
Android and iOS draws J curve
• Shows the new species how rapidly dominant an eco system.• Android and iOS
made a J curve growth.
Where was Nokia at 2012?
volumes sold >
operating profit>
Nokia
Nokia
Apple
Apple
Apple
Nokia
And in 2013
So if you want to be selected by nature , need to choose a strategy.
It’s all about Natural selection!
“r-Selected” Species
• r = Growth rate• Reproduce young• High reproductive rates• Many small offspring• Short-lived• Found in unstable or unpredictable
environments
Examples of r-Selected Species
• Weeds, bacteria, insects, algae, small mammals
“K-Selected” Species• K = Carrying Capacity
• Reproduce later in life• Low reproductive rates• Fewer large offspring• Long-lived• Stable or predictable environments
Examples of K-Selected Species
• Elephants, great apes, whales, human
What Determines Population Size or Carrying Capacity?
• Environmental Resistance• All the limiting factors that
tend to reduce population growth rates
• Balance between biotic potential & environmental resistance determines growth rate
What are some Limiting Factors?
Environmentalresistance
Carryingcapacity
Stabilizedpopulation
sizeEx
pone
ntia
l gro
wth
Limiting factors:WaterSpaceFoodPredatorsDisease
Dominant Species
• Who is the dominant species in earth? Human!
• Versatile surviving skill(language and culture)• Reproduce later (over 30? Now)• Low reproductive rate (almost 1.x)• Long-lived ( over 60yrs)• Stable of predictable
environments (after world war II)
So What?
• What is carrying capacity of mobile phone business?• What is best point between r-selection and K-selection continuum?• How can we be a dominant species?
“User’s Selection” is “Nature’s Selection”
r and K strategies in mobile business
What happens?
• Old Motorola, Samsung and Nokia’s r-Selection strategy (many product as possible in portfolio) in feature phone was failed to keep their dominant market any more.
• K-Selection strategy by Nokia smart device is also failed to dominate market from 2010-2013. WM6 &WM7 couldn’t compete with Android nor iOS neither.
• From 2010, r-Selection strategy could be back for Android. Android platform dominates and is stabilized.
• From 2010, Nokia chose a kind of K-Selection strategy but it was too expensive for Nokia. Too late. Risk of the strategy is realized.
Questions?
• Do you have enough products in portfolio?• Is it time for increasing or decreasing the size of portfolio?• Are you focused on a strategic area and invest enough resource on it?• During arm race, how can you have a leadership at high ground?• Arm racing is approaching to end? If it is expected, do you have a
next plan?
Company Confidential. ©2010 Nokia 25
r-K continuumr-Selected K-SelectedMany as possible The OneArea Defense One by one
Diversionarytactics
Multiple choice but depends on current situation
