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The Finnish company, Nokia, had, as a relatively small firm, managed to acquire the position as the second largest producer of cellular telephones. The industry was characterised by rapid technological change, and growth rates sky-rocketed. Large companies like Matsushita were experiencing difficulties in making significant inroads in the industry. What did Nokia have, enabling it to compete alongside companies like Motorola and LM Ericsson? The case touches upon issues like barriers created by proprietary knowledge, emphasising the importance of constant innovation, and brings into view the way in which a truly competitive environment drives incumbents to achieve global presence, drives them to constantly upgrade their knowledge base and to achieve volumes that will support these development costs. Implicitly the case points out the often self-inflicted damage incurred by firms that do not access competitive situations. The analytical approach uses both the industry analysis and the resource based perspective in order to compare the firm's internal resources and capabilities relative to its environment.