13202555 Nokia Strategy Final

8/6/2019 13202555 Nokia Strategy Final

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NOKIASSTRATEGY By-

Prasenjit (34)Vibhas (52)Vikram (53)


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OF

Established in 1865 as a wood-pulp mill byKnut Fredrik Idestam on the banks of Nokianvirta river in Finland.

Finnish Rubber Works acquired Nokia WoodMills Telephone and Telegraph Cables

Nokia Corporation created - 1967 - paperproducts- car tires- personal computers-cables


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OF

Nokia began developing the digital switch(Nokia DX 200) which became a success.

1991 Nokia - agreements to supply GSMnetworks - nine European countries.

August 1997 Nokia - GSM systems to 59operators in 31 countries.


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THE VISION

The Vision of Nokia:

Our vision is a world where everyone can

be connected. Our vision is to ensure that 5billion people are always connected at anygiven point and to achieve 100 fold morenetwork traffic


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NOKIA TODAY

H ead office in Finland; R&D, production, sales,marketing activities around the world

World s #1 manufacturer of mobile devices,with 38% share in 2007

112 262 employees

Sales in more than 150 countries


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CORPORATE STRUC TURE


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NOKIA AND ITS SBU S

NOKIA

MOBILE PH ONES

MULT IMEDIAENTERPRISESOLUT IONS

NOKIA SIEMENSNETWORK

CELLULARTECH NOLOGY

DEVICES

NETWORK SECURITY CORPORATEEMAIL


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PESTEL ANALYSIS

Political As markets are deregulated, both operatorsand manufacturers are free to act independently of government intervention. In Countries like India andChina where Partial regulations exist, governmentintervention does take place.


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PESTEL ANALYSIS

Economic With incomes rising, people have moredisposable income, which enables consumers to bemore selective with their choice of mobile phone,looking to other factors rather than fulfilling the mostbasic of user needs (text messaging and phone calls) and

price being such a key factor.


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PESTEL ANALYSIS

Social T he rise of the so-called information societyhas made telecommunications increasingly moreimportant to consumers, both in terms of work andleisure. Users are more aware of mobile phone handsetchoice and advancements due to increased information

availability.


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PESTEL ANALYSIS

Technological T here have been many global

advancements in technology such as MMS, Bluetooth,WAP, GSM, GPRS, cameras etc. T he Asian markets aremore technologically advanced than their Europeancounterparts, for example in 2002, just 4% of phones

had cameras, whereas in Asia 90% did.


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PESTEL ANALYSIS

Environmental T here is a concern that the use of

mobile phones could be damaging to health, withtumours potentially being caused by the waves emittedby the handsets. T here is also immense wastage createdby unwanted mobile phones that are thrown away as

they are non-biodegradable.


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PESTEL ANALYSIS

Legal Difficult to patent mobile phone designs.Technology Infringement causes a lot of legal issues.


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PORTER S DIAMOND ANALYSIS


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Porter s 5 Forces Framework Analysis: TheMobile H andset Industry


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RIVALRY AMONGC OMP ETITORS

INDUSTRY GROWTH RATE: The industry has grown by just 10% during2007. This is down from the 23% growth rate seen in 2006.CONCENTRATION AND BALANCE: The major players are BenQ-Siemens,LG, Motorola, Samsung and Sony Ericsson.

INFORMATIONAL COMP LEXITY: Devices are becoming more complex andgetting features (picture, audio, video) that are outside the corecompetencies of traditional manufacturers.

CORPORATE STAKES: H igh stakes for the companies because of hugeinvestments into the business.


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BARGAINING POWER OF

BUYERSBUYER INFORMATION: Buyers have comparative information about theproduct in terms of price and features.

BUYER CONCENTRATION: Network operators are relatively concentratedand large service providers such as Orange and Vodafone have highbargaining power.

SWITCHING COSTS: Individual buyers have low switching costs and are

price or feature sensitive.

PRODUCT DIFFERENCES: Low degree of product differentiation and anynew feature or technology is quickly imitated.


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BARGAINING POWER

OF SUPP LIERS

SWITCHING COSTS: A large number of suppliers for non criticalcomponents.

For critical components suppliers work closely with companies as theyinvolve joint development of specialty inputs and sub-systems.

IMPA C T ON DIFFERENTIATION : Companies could switch suppliers for noncritical components but are closely tied to them for critical componentsand sub-systems.

THREAT OF FORWARD IN TEGRATION: Suppliers do not pose any crediblethreat of forward integration even though they are outsourced.


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TH REAT OF NEW ENTRANTS-ENTRY BARRIERS

PROPRIETARY PRODUC T DIFFERENCES: Technology and product designsare protected by patents.BRAND IDENTITY: Powerful brand identity of the existing playersdeveloped through advertising and product excellence.ECONOMI ES OF SCALE: H igh fixed costs means that volume is essential tocompanies.CAPITAL REQ UIREMENTS: Activities such as R&D and advertising requireslarge capital commitments.EXPECTED RETALIATION: Existing competitors have the financial clout todeter new entrants.ACC ESS TO NECESSARY INPUTS: Suppliers work closely with existingcompanies and therefore critical components may only be available at apremium.


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TH REAT OFSUBSTITUTES

PC based applications such as IP TELEPHONY

Convergence between PDA S AND MOBILE PHONES.

Technological regression due to ESC ALATING MOBI LE COSTS.


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Basis of Competitive

AdvantageProduct competitiveness : Nokia profitably competes in all mobile devicesegments from entry-level to high-end. It has the broadest product

portfolio in the market.Customer satisfaction : Nokia uses customization to gain greater customersatisfaction

R&D effectiveness : Nokia spent about USD 3.4 Billion on R&D.

Demand-supply network alignment : Nokia captures its potential upside

in high-demand situations by aligning its demand-supply network.End-to-end capability : Nokia systematically leverages its end-to-endcapability by integrating mobile devices, applications and infrastructure


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NOKIA S VALUE NETWORK


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SWOT ANALYSISSTRENGTHS

Strength of CORPORATE BRANDDesign, the branding and the technologyDominant player in SMAR TPHONE

marketLargest C ELL PHONE VENDOR

WEAKNESS

Slow to adopt new ways of thinking-C lamshell PhonesBeing the market leader and its increase

role in SYMBIAN is giving Nokia a badimage

OPPOR TUNITIES

Growth markets such as C H INA, LATIN

AMERIC AIncrease their presence in the C DMA

marketLeverage its infrastructure business to

get preference and stronger position withcarriers

TH REATS

INFLEC TION POINT- A Disruptive

Technological ChangeCheaper MID RANGE models from

Motorola & othersOperators want to lessen their

dependency on handset vendorsPotential threat from Microsoft s entry

into mobile telephony


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Vs

One To One Comparison

Main Division: MobilesNOKIA MOTOROLA

SALES 60.2% 66.2%

OPERAT ING INCOME 70.4% 65.7%

Key SuccessFactors

NOKIA MOTOROLA Edge

TechnologyStrategy

5 3 Nokia

3G Products 4 5 Motorola

Applications 5 3 Nokia

Software 5 4 Nokia

Total 19 15 NOKIA


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Vs

200 Million 75 Million


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VsContinuous innovation and

new features.Moves faster than rivals in

introducing new features

H as focused on iconicproducts to change trends onthe market

Year No of NewProducts

2002 34

2004 36

2006 39

13202555 Nokia Strategy Final

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