Competition for the leading position
in the mobile market:
An in depth analysis of key factors
UBI- Business Intelligence Concepts
Presented by: Arend Mulder
Ricardo Serrano
Helmi Soosaar
Fall 2005
Mobile Industry Development
Global sales of mobile handsets,
m
900
800
700
600
500
400
300
200
100
0
1999
2000
2001
2002
2003
2004
2005 2006*
Mobile phone sales will reach 779 m units in 2005.
More than 100 M 3G phones will be sold in 2006. More than 200
m smartphones will be sold in 2008.
40
35
30
25
20
15
10
5
0
Nokia
Motorola
Samsung
LG
Sony Ericsson
Siemens
Competitive Intelligence Information Flow
Strategy to maintain
competitive position
Recommendation & Action
Analysis & Interpretation
Sources
Assumptions &
Unknowns
Key
Intelligence
Topic
Key Success Factor
Analysis
Screening & Evaluation of
relevant information
Motorola paving the way in emerging mkts
Motorola is pioneer & will dominate
Based on Key factors which company
has the edge
HRA® Model of Success
Factors
"Strong growth in
emerging mobile phone
markets, such as South
America and Africa, is
driving demand for
increasing numbers of
entry-level devices,
precisely the massmarket segments where
Nokia and Motorola are
among the strongest.
"By 2006, we could
see a quarter of
Africa's billion
users."
"Some 80% of the world's
population has mobile
on
i
phone coverage, but only
l
l
i
m
50
1
d
25% have a mobile phone.
d
a
ld
u
o
c
!
a
That is 3 billion people who
0
i
1
0
Ind
2
by
s
r
have coverage but cannot
e
b
i
r
subsc
afford mobile
communications,
Emerging markets
The growth of global mobile market :
1990 11m today 2 billion and in five years 3 billion!
Latin
America
8%
Africa/MidEast 20%
Other
Growth
market
22%
Share of growth
China 25%
Rest of
Asia
Pacific
25%
Largest telecom market in the world
50 % from Asia
Pacific Growth
Prospects: 250 M
Chinese moving
to cities in the
next 15 years
2005: 400 M
2010: 650 M
50 % population
Youth!
15 %
Growth till
2010
3G in
2006:Growth
up to 8 b by
2008
China - one of the most
competitive markets
??? 20%
NOKIA 22%
MOTOROLA 15%
Samsung 10%
Lenovo 5%
SonyEricsson 5%
Amoi 4 %
NingboBird 8%
TCL 4%
Haier 3% Konka 4%
Lower end of
market: 30%
of consumers
Leader with 22% market share
Ollila: »
China
becoming
our most
important
market in
the next 3
years »
2.2 billion investments during past 20 years increasing
manufacturing & R&D capacity
Strategy: maintain leading position, retain focus on
hand-set business, reach the peripheria and provide
tailor-made high quality solutions
« 3G will provide us an
opportunity to improve
our positions »
Currently 15 % market share -Reach 20 %
We ve now
tripled our
network in the
Invested more than $ 3.4 b since 1987
last year, he
said. This gives New build-up of sales network
us a platform as
we launch all
Advantage: A good corporate citizen
our new
products. It
gives us a much
more prolific
The best in long-term commitment; most
footprint to
capture more innovative; best adapted to the Chinese
share.
market; best employer in China (Source:
Fortune magazine, Chinese edition)
One to One Comparison
In China
Nokia
Motorola
Market Share
5
4
Sales volume
5
4
JV/Alliances
5
4
Cultural Awareness
4
5
Political relations
5
4
Brand
5
4
Total
29
25
Edge
Nokia
Influencing
factors
China
Africa
India
Growth
potential
Low 012345 High
5
3
4
Legislation
Many 012345 Few
3
2
4
Politics
High 012345 Low
3
2
4
Infrastructure
Low 012345 Adv
3
2
2
Competition
High 012345 Low
3
1
1
Total
17
10
15
Drive to technology
Technology strategies
3G products
Applications
Software
Strategies for innovation
Patents
Nokia has more out-house
innovation
Motorola has more in-house
innovation
Motorola has the better application
Nokia has the better outhouse contracts
(Microsoft)
Internet
Email
Route planner
Services (weather reports, news channels etc )
Nokia is better in touch with the market
Video
Music
Games
Universal
search engine
Portable
personal storage
Online
personal storage
Utility
computing
Online Archives
The domain of Nokia. They have the
outhouse contracts and the best
knowledge what the market wants
Video
Music
Games
Key Success Factors
Nokia
Motorola
Edge
Technology Strategy
5
3
Nokia
3G products
4
5
Motorola
Applications
5
3
Nokia
Software
5
4
Nokia
Total
19
15
Nokia
Customer Preferences
Product Portfolio & Quality
Time to Market
Marketing Strategies
Uninvolved
New Life Harmony
Voice as a Link
Adopters
Intense
Forerunners
Nokia s Product Portfolio, Quality
& prices
From basic features to business ready
Push to talk to internet navigation
Helps users track usage
Longer talk times
Price range (70 to 100 euros)
Motorola s Product line, Quality & Prices
Focused on battery life and
basic functions like SMS.
FM radio
Large display and durable
design
Very simple, bare essentials
Price range (25 to 50 euros)
e
r
o
f
e
b
s
u
r
ol fo
o
c
s
a
w
."
l
a
o
n
o
c
s
a
"Chi
w
ht it
g
u
o
h
t
e
s
l
anyone e
Over 20 new
products introduced
in 2005
5 new models for
holiday season
Millions spent on
Time to Market
adjustments
Increased distribution
network
Leading the industry in
new product launch
Timely delivery of new
product is key business
strategy
New manufacturing
facilities
Marketing Strategies Nokia
Aggressive
Pricing
Ensure
Accountability
and
Quality
Improve
Collaboration
on Designs
Focused on Handset
Manufacture
only
Customer
Satisfaction
Enhance
Product
Portfolio
Increase
Distribution
Channels
Increase
Commitment to
Emerging
Markets
Focused on
replacement
Adjust
Preferences for
specific
markets
Motorola s Marketing Strategy
We have
designed and
developed
phones for the
African mass
market and is
loaded with a
list of
unparalleled
features such as
longer battery
life, large
displays and is
above all
affordable,"
Focus on
Mass
Market
Functionality
&
Adaptability
Logistics
Support
Customer
Preference
Flat
Distribution
Network
Low Prices
Market
Segment:
Youth
Won GSM
Bid for a 2nd
time
Unicom
$$$ Contract
Pricing Strategy
under 30
Pioneer in
entrance to
markets
Investments
in R&D
Leader in
Target Mktg
Increase
Channel
Distribution
JV to become
largest
manufacturer
In country
manufacturing
facilities
billions spent
in R&D
investment
Strategic
Alliances with
local operators
Numerous
new
sales offices
Increased
distribution
network
Key Success Factors
Nokia
Motorola
Edge
Product Portfolio
4
5
Motorola
Product Quality
5
3
Nokia
Customer Preferences
4
5
Motorola
Time to Market
5
4
Nokia
Marketing Strategies
5
5
Even
Penetration of Markets
5
4
Nokia
Total
28
26
Nokia
Key Success Factors
Nokia
Motorola
Edge
Dominance of Emerging Markets
29
25
Nokia
Technology
19
15
Nokia
Marketing Strategies
28
26
Nokia
76
66
Nokia
Final ranking
Nokia
Nokia
Nokia
Marketing
Marketing
Apply the Olympic medal focus
strategy
Introduce the voice of the
customer into products
Expand coverage areas
Nurture current network of
alliances and distribution
Emerging Markets
1. Break out of cities to rural
areas: focus on areas, where
the cost of building wireless
infrastructure is more costeffective than in building a fixed
line (China/India)
2. Focus on Youth: imaging and
games (China/India)
Technology
1. Improve pioneering
2. Increase sophisticated
applications
Emerging Markets
1. Focus on low-cost market
(Africa/China)
2. JV/Liaise with locals (India)
Build position as Good Corporate
Citizen (India, Africa)
Technology
1. Look outside
2. Know your environment