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Navteq

1) Nokia followed a traditional asset-based business model investing in infrastructure like Navteq, while Waze used a user-based distributed model leveraging data from smartphones. 2) Nokia's substantial investment in Navteq failed as Waze was able to collect more data through its innovative user-based approach with less investment, rendering Nokia's assets obsolete. 3) Waze's business model involved user-based data collection from GPS in smartphones and scalability through adding new users at low cost, allowing exponential growth surpassing Nokia.

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Ilana Jayne Sprongl
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32 views1 page

Navteq

1) Nokia followed a traditional asset-based business model investing in infrastructure like Navteq, while Waze used a user-based distributed model leveraging data from smartphones. 2) Nokia's substantial investment in Navteq failed as Waze was able to collect more data through its innovative user-based approach with less investment, rendering Nokia's assets obsolete. 3) Waze's business model involved user-based data collection from GPS in smartphones and scalability through adding new users at low cost, allowing exponential growth surpassing Nokia.

Uploaded by

Ilana Jayne Sprongl
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Once you have read the case, answer the following questions:

a) Which are three differences in the business model in each company?

Nokia Waze
Traditional, asset-based business model, User-based distributed model utilizing
investing heavily in tangible infrastructure information from users’ mobile phones.
(Navteq purchase).
High investment costs (purchase of tangible Limited investment costs, network grew through
assets) that needed to be maintained and had usage.
growth costs.
Nokia followed a traditional linear growth model, Experienced exponential growth by leveraging
creating a barrier to entry by purchasing Navteq – existing smartphone technology and focusing on
giving them control of the European network. user acquisition.

b) Which is the turning point that made Nokia fall?

The turning point for Nokia was their substantial investment in Navteq with the hope of creating a
competitive barrier against rivals like Google and Apple. This approach failed as Waze, using an
innovative, user-based approach, was able to collect more data with less investment, rendering Nokia's
expensive assets obsolete and leading to a drop in the company’s value.

c) Which are two innovation elements in Waze’s business model?


1. User-Based Data Collection: Waze used users’ mobile phones as “human traffic sensors,” leveraging
GPS data to collect real-time traffic information, bypassing the need for expensive hardware and
infrastructure.
2. Scalability and Cost-Efficiency: The ability to add new sources or users at essentially zero cost and
the inherent scalability of its user-based model allowed Waze to grow exponentially, surpassing
Nokia’s tangible asset-based approach.

d) Of the skills that you have studied throughout the course, which did Levine, founder of Waze,
show?

Levine showed open innovation thinking, recognizing the potential of leveraging existing technology
(GPS in mobile phones) for data collection.

e) Identify a similar case to the one explained here, but in the entertainment industry.

A similar case in entertainment is Blockbuster. Blockbuster followed a traditional business model,


investing in physical stores and tangible assets, and failed to recognize shifts in the market – in
particular, failing to consider how viewer preferences changed over time, and how those preferences for
on-demand programming/streaming content were a risk to their model. While Blockbuster “missed the
boat” organizations such as Netflix adopted a user-centred approach and leveraged technology to create
a streaming service that met consumer needs.

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