Nokia’s Strategic Management Nokia Description of Company Nokia envisions a world where connecting people to what matters empowers them the most of every moment Nokia’s CEO Olli-Pekka Kallasvuo Generation of Nokia NOKIA’S FIRST CENTURY: 1865-1967 • The first Nokia century began with Fredrik Idestam’s paper mill on the banks of the Nokianvirta river. Between 1865 and 1967, the company would become a major industrial force; but it took a merger with a cable company and a rubber firm to set the new Nokia Corporation on the path to electronics.
Generation of Nokia THE MOVE TO MOBILE: 1968-1991 • The newly formed Nokia Corporation was ideally positioned for a pioneering role in the early evolution of mobile communications. As European telecommunications markets were deregulated and mobile networks became global, Nokia led the way with some iconic products. Generation of Nokia MOBILE REVOLUTION: 1992-1999 • As mobile phone use booms, Nokia makes the sector its core business. By the turn of the century, the company is the world leader.
In 1992, Nokia decided to focus on its telecommunications business • As adoption of the GSM standard grew, new CEO Jorma Ollila put Nokia at the head of the mobile telephone industry’s global boom – and made it the world leader before the end of the decade. Generation of Nokia NOKIA NOW: 2000-TODAY • Nokia sells its billionth mobile phone as the third generation of mobile technology emerges. Nokia’s story continues with 3G, mobile multiplayer gaming, multimedia devices and a look to the future. Organizational Structure
NAVTEQ:Manages digital map consumermobile device and marketing Nokia Siemens Network: Provides sales operational support to the units Services & Development Office. data thechannel,fixednavigation systems, Corporate Software: Develops Gives automotive network Markets: Provides supply chains, wireless and brand portfolio, Devices: Develops and manages for Internet services in 5 mobile navigation devices, messaging and games), applications, infrastructure, corporateof Internet-based mapping platforms to areas (music, maps, media,components. futureservice and worksandand andincludes communications and networks growth opportunities. activities. he sources strategic and explores government services an solutions. professional and business easily, accessible manner to consumers. deliver the services into operators and service providers. Vision of Nokia • The full power of being connected • Enable people to be wherever they want, whenever they want • Life becomes more flexible and spontaneous • Innovating, creating and sharing • Technology becomes invisible • Nokia never miss an opportunity to get the most out of life Goals of Nokia • To become the leading provider of mobile solutions, because in the mobile converged internet space consumers expect seamlessly integrated solutions. To deliver these solutions requires continuous relationships with consumers and vibrant ecosystem. SWOT ANALYSIS STRENGTHS •Brand awareness •Technology leader in manufacturing mobiles •Market leader •Presence across 150 countries WEAKNESSES •Not good at software •Performance of Symbian OS is lackluster •Increasing dissatisfaction levels with its smartphone •Very weak market share in US OPPORTUNITIES •Huge loyal customer base •Huge presence in developing countries •Can use its infrastructure business (Nokia Siemens Network) to educe the bargaining power of mobile THREATS •Rapidly changing industry •Changes of missing Inflection point is high •Threat of entry from new business (Nokia Siemens players, Microsoft might Network) to reduce the enter smartphones market. bargaining power of mobile Google has just entered the operators market with Nexus One. Strategy Formulation Product Differentiation ? Applications are the product differentiator ? Nokia’s OVI Store ? Projection: in 2014 6. 67 billion applications would be downloaded ?
Increase User Satisfaction Index ? Alliance with software developers ? Increase community strength of Maemo Strategic Objectives • Irresistible solutions and vibrant ecosystems • Direct and continuous consumer relationships. • Best devices – Broadening their geographic reach – Broadening their device base will grow their service business • Smart services – Creating relevant and personalized services – Target: 300 million people using their smart services by 2012 Strategy Formulation Cost Differentiation • Nokia can set an industry enchmark for operating profits • Pressure on competitors • Cost leadership an invincible position against competitors • Fight head-on with Apple Strategies of Nokia • Competitive environment is changing • Consumer needs are changing • The nature of consumers’ relationships with companies is changing • Irresistible solutions & vibrant ecosystem • Transforming into a solutions driven company optimizing user experience. • Laying the foundation for an inclusive and sustainable ecosystem • Direct and continuous consumer relationships • Best devices • Smart services
Strategies Evolution of Nokia Competitive Strategy NOKIA NOKIA Broad differentiation strategy Mass Market Low cost mass market strategy Niche Market Low cost niche market strategy Focus differentiation strategy Functional Strategy • Reduce product portfolio • Opportunity for targeting information users • Target specific customers and specific lifestyles • Connect emotionally with the target • Define roadmap of Operating Systems (Symbian or Maemo) Corporate Strategy • Continue divestments • Concentrate resources and energy in smartphone business