Nokia
Mobile Telecommunications
ΑΔΑΜ ΚΟΣΜΑΣ
ΜΑΙΟΣ 2002
STRATEGY DESIGN
•
•
•
•
VISION/STRATEGIC INTENT
INTERNAL ANALYSIS
EXTERNAL ANALYSIS
IMPLEMENTATION
RELATED
DIVERSIFICATION(1)
• OLD CORPORATE STRATEGY
– GRADUAL CHANGE OF PRODUCTION
LINE TO RELATIVE BRANCHES
• OLD PRODUCTION LINE
– CABLES PAPER WOOD
– CABLE FACTORY DIVERSIFICATION TO
ELECTRONICS
– ‘90s FOCUS IN TELECOM
RELATED
DIVERSIFICATION(2)
• Old branch were profitable
• Diversification relied on old branches
profits
• Trial and error procedure
– Electronic branch became profitable in ‘80s
– Focus on telecom due to low profits of
electronic branch.
RELATED
DIVERSIFICATION(3)
• In 90s Nokia withdraws from paper and
cable production
• Inter-organisational co-operations
• Acquisitions(domestic market firstly)
RELATED
DIVERSIFICATION(4)
• Two strange key factors of success
– public telecom operator
– NMT
• Big and advanced market
• Offered business opportunities
• Head start for competitors
Nokia
• A leading end-to-end
infrastructure supplier
• World's largest
manufacturer of mobile
phones
• More than 55 000
employees
• Netsales USD 20 billion
1999
• Market capitalization
value over USD 200
billion
7
© NOKIA
TABD.PPT /15.9.1999/VS
Nokia Worldwide
Sales offices
R&D
Production, incl.
joint ventures
NOKIA GROUP BRANCHES
• NOKIA MOBILE PHONES
•NOKIA TELECOMMUNICATIONS
•NOKIA VENTURE
STRATEGIC VISION
• VISION’S DESCRIPTION IS SORT
– “CONNECTING PEOPLE”
Customer Analysis
• 18-29 years of age
• Mainstream product
• 2 segments; Consumer/Business
Consumer Segment
• Light Users
• Medium Users
• Heavy Users
Buying Behavior
• Light/Medium users
– Price
– Low information search
– Package deals
• Heavy users
– Functional & Psychological reasons
– High information search
Business Segment
• Functional motive
– Battery life, capabilities, etc.
• Buyers; Company or individual employees
– Criteria
• Employees; capabilities, brand
• Company; price, capabilities, provider deals
Competitors Analysis
• Asian Region
• European Region
• American Region
Market Analysis
•275 millions of phones sold in 1999
•Nokia’s share - 79 million units
•93% increase from 1998
•50% more than in 1998
The Market is Changing
Mobile vs. Fixed Subscribers (worldwide)
2500
2000
Mobile
Fixed
Data vs. Voice Traffic
1500
(worldwide)
Data
Voice
1000
500
0
1985 1988 1991
1994
1997 2000 2003 2006
1985 1988 1991 1994
Sources : Nokia, ITU, Dataquest, EMC, Global Mobile
1997 2000 2003 2006
Internet Connectivity Outlook
Millions
1,400
1,200
1,000
800
More handsets connected to the
Internet than PC's by end of
2003 !
Projected 1 billion
Mobile Subscribers
Projected PC's
Connected to
the internet
600
400
200
0
Projected WAP
Handsets
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
From NMT to 3G
Socio - Cultural
• Unspoken Code of Conduct - Using
phones in public venues.
• Fashion Statement - Phones have
become an accessory
Political - Legal
• Medical device interference.
• Health problems - memory loss, brain
cancer.
• Dangerous while operating a vehicle
SWOT Analysis
• Strengths
– Strong Organization
– Great brand name recognition
– One of best innovators in the Industry
– Sets tone for the entire market technologically
• Weaknesses
– Large Organization
– Different market operations
• Control
• Currency risks
SWOT Analysis
• Opportunities
– New Markets
– Internet
• Threats
– Risk
– Changing Technology
– Increased competition
• Asia
• Europe
• USA
BCG Matrix
60% 50% -
Stars
45% -
Question Marks
40% 35% 30% 25% 20% 15% -
Cash Cows
Dogs
10% 5%0
10X
5X
1X
0.5X
0.1X
Pricing
• 2 segments and systems
• Cellular network providers
– Selling high quantities in bulk
– To price sensitive market
• Individuals needing top line products
– Not price sensitive
– Newest technology
– Newest design
Product
• 18 new models in 1999
New demand driven
• applications
• services
• devices and
• design
Promotion
• Consumer segment
–
–
–
–
Mass media; TV/papers/magazines
Co-op advertising
Internet
Sports events
• Snowboarding World Cup
• Adventure Sports
– Boat/balloons
Promotion
• Business Segment
– Sales agents
– Promotion targeted towards consumers
Product-Market Expansion Strategy
• Currently in 130 different markets
• Joint ventures/distributor agreements
• Continue to expand as long as need and
buying power exists.
• Expansion of GSM and 3G network.
– China, UK, Philippines, Norway, Turkey
Europe is still leading the way….
450 000
Forrester Predicts That One in Three
Europeans Will Access the Net Via Population
Mobile Phone by 2004
400 000
350 000
Mobile
subscribers
250 000
Source: Forrester Research, Inc., 1999
04
20
02
03
20
19
99
0
20
50 000
01
100 000
20
150 000
AMSTERDAM, Netherlands--(BUSINESS WIRE) via NewsEdge
Net-enabled
Corporation --Europe stands on the brink of a revolution in Internet access.
By 2004, one-third of all Europeans -- more than 219 million consumersmobile
-phone
will regularly use their mobile phones to access Internet services according to
owners
a new Report from Forrester Research B.V. (Nasdaq:FORR). Although the
sites that will host these services are already being built, it remains unclear
Regular mobile
whether mobile operators will provide free and open access to these sites.
Internet users*
Europeans lead the world in mobile phone use, with more than 117 million
people in the EU carrying mobile phones. Many of these phones are already
being used for data -- Europeans pass more than 2 billion short message
service (SMS) messages a month to chat and read sports scores. These two
factors, plus the introduction of wireless application protocol (WAP) phones,
will vault Europe into the lead for mobile Internet access. (continues….)
dated: 1999-12-16
00
200 000
20
'000
300 000
Differentiation
Diversification
Information
Entertainment
WAP
Development
Voice
e-mail
Video
e-shopping
and
banking
Concentrate on youth
• Finnish teenagers send
on average 100
messages per month
• Up to 90%, on average
50% of the bill is SMS
• Teenager bill '97 was
$20
• Teenager bill '98 was
$40-$50
WE HAVE ONLY SEEN THE
BEGINNING
Thank
you