Nokia And The Global Mobile Phone Industry


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For my Strategic Planning class during the spring of 2008, we had to choose a company, research the company, & prepare a presentation on them. After we gave our presentation, we were required to come up with a strategic plan for the company that we researched. This powerpoint presentation is the actual powerpoint that we used in our presentation. We received an A, both in the class, and on this presentation.

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  • Nokia And The Global Mobile Phone Industry

    1. 1. Eric, Kevin, John, Naomi
    2. 2. <ul><li>Company began in early 1800’s. </li></ul><ul><li>In 1865 Nokia was named, by Fredrick Idestam, after a river in Finland. </li></ul><ul><li>1967 Nokia Corporation begins as a merger between four existing businesses. (Forestry, rubber, cable, and electronics) </li></ul><ul><li>History with mobile phones began in 1981. </li></ul><ul><li>During the 1980’s Nokia acquires many other companies in order to enter new markets. </li></ul><ul><li>The fall of the USSR in 1990 forced Nokia to enter the telecommunications market. </li></ul><ul><li>1994 - Nokia goes public. </li></ul>
    3. 3. <ul><li>Over the late 1990’s and early 2000’s Nokia introduces several new and smaller phones in quick succession. </li></ul><ul><li>In 1998 Nokia introduced the 8800 series, that model went on to reach a gross profit margin of 70 to 80%. </li></ul><ul><li>Nokia broke new ground in 1999 when it launched its 8210 handset on the catwalk in Paris. </li></ul><ul><li>By 2000-2001 Nokia was firmly established at the top of the mobile phone industry controlling 35% of the market. </li></ul><ul><li>2000-2002 Nokia hits its market share peak of 35%. </li></ul>
    4. 4. <ul><li>2003-2004 Nokia sales fell below expectations. </li></ul><ul><li>Late 2004 attempted to increase market share by introducing several new phones. </li></ul><ul><li>Nokia failed to keep up with competitors such as Microsoft, LG, and Samsung. </li></ul><ul><li>Nokia was unsuccessful to capitalize on the growing popularity of color screens and camera phones. </li></ul><ul><li>Late 2004 market share stabilizes at 32% after falling as low as 28% in early 2004. </li></ul>
    5. 5. <ul><li>A world where everyone can be connected. </li></ul><ul><li>In 2015, 5 billion people always connected, and 100 fold more network traffic. </li></ul>
    6. 8. <ul><li>Nokia observes first, then design. Nokia acts on consumer insights. </li></ul><ul><li>Internet innovation, creativity, media , and service will be available anywhere, anytime. </li></ul><ul><li>Take a human approach to technology </li></ul><ul><ul><li>Simple </li></ul></ul><ul><ul><li>Intuitive </li></ul></ul><ul><ul><li>Reliable </li></ul></ul><ul><li>Is this current strategy working? </li></ul><ul><ul><li>-During 2007, Nokia gained device market share in all regions except North America and Latin America, where market share declined. In Middle East & Africa, Nokia had excellent market share gains in 2007. Nokia continued to benefit in Middle East & Africa from its brand, broad product portfolio, and extensive distribution system. The current strategy appears to be effective in gaining market share. </li></ul></ul>
    7. 9. Current Market Share as of January ‘08 = 40%
    8. 10. <ul><li>Strengths </li></ul><ul><ul><li>-High Quality Phones </li></ul></ul><ul><ul><li>Industry Leader in Innovation </li></ul></ul><ul><ul><li>Cheap for consumers to buy </li></ul></ul><ul><ul><li>Good Equity </li></ul></ul><ul><li>Weaknesses </li></ul><ul><ul><li>Lagging Behind in R & D </li></ul></ul><ul><ul><li>Some Short-term borrowings </li></ul></ul><ul><ul><li>Smaller Sales than other phone carriers </li></ul></ul><ul><li>Opportunities </li></ul><ul><ul><li>Cut down on least profitable businesses & concentrate on profitable main business </li></ul></ul><ul><ul><li>Increase R & D with extra operating profit </li></ul></ul><ul><ul><li>Open up to other markets besides Europe. </li></ul></ul><ul><li>Threats </li></ul><ul><ul><li>Other phone manufacturers </li></ul></ul><ul><ul><li>Microsoft </li></ul></ul><ul><ul><li>Samsung, LG, Sony Ericsson, Motorola, Etc. </li></ul></ul>
    9. 12. <ul><li>Anyone who has a vested interest in the company is a Nokia shareholder. </li></ul><ul><li>Needs of stakeholders include: </li></ul><ul><ul><ul><li>High ROE </li></ul></ul></ul><ul><ul><ul><li>Dividends paid out </li></ul></ul></ul><ul><ul><ul><li>Increase in stock price </li></ul></ul></ul><ul><li>With an average ROC the last 5 years of 33.8%, and an ROC last year of 47.5%, it appears that Nokia’s strategy is working. </li></ul>
    10. 13. <ul><li>As of late 2004/early 2005, both EPS & gross profit had all increased from the previous 3 years. </li></ul><ul><li>ROE decreased from ’00 to ‘01, then rebounded slightly in ‘02. From ‘04 to the present, it has jumped! </li></ul>
    11. 16. <ul><li>Foresight promotes a shared understanding of the basic drivers of change affecting the whole business </li></ul><ul><li>Scenarios may be inappropriate when it is necessary and prior to be flexible and react quickly to weak market signals. </li></ul><ul><li>The Nokia world map provides every business units within emerging trends for the business areas and investment projects can be assessed with more details. </li></ul>
    12. 17. <ul><li>Analysts wonder if Nokia can dominate the industry again as it did in the late ’90s. </li></ul><ul><li>In order to reestablish themselves as an industry leader, where does Nokia need to be? </li></ul><ul><ul><li>Reemerge as the industry leader in telecommunications </li></ul></ul><ul><li>What does Nokia need to do to get there? </li></ul><ul><ul><li>ID new avenues of growth </li></ul></ul><ul><ul><li>Cut prices to increase market share </li></ul></ul><ul><ul><li>Launches new cell phone models </li></ul></ul><ul><ul><li>More aggressive marketing </li></ul></ul><ul><ul><li>Launch into new markets </li></ul></ul>
    13. 18. <ul><li>Goal </li></ul><ul><ul><li>The Nokia Culture and Ways of working engage us all workers in creating a world where everyone can be connected. </li></ul></ul><ul><li>Goal </li></ul><ul><ul><li>Nokia has the best leaders in our industry. </li></ul></ul><ul><ul><li>True Nokia leaders set the example throughout the company. </li></ul></ul><ul><ul><li>The Development opportunities and the recognition provided in Nokia are highly appreciated by employees. </li></ul></ul><ul><ul><li>New Nokia Values! </li></ul></ul>
    14. 19. Nokia's strategy relies on growing, transforming, and building the Nokia business to ensure its future success.
    15. 21. <ul><li>According to their 2007 annual report, Nokia is “committed to the highest standards of ethical conduct, and fully compliant with all national & international laws.” </li></ul><ul><li>Ethical goals are: </li></ul><ul><ul><li>To be the best in corporate responsibility </li></ul></ul><ul><ul><li>Practice good citizenship everywhere it does business </li></ul></ul>
    16. 23. <ul><li>Mobile phone industry is undergoing a vast change. </li></ul><ul><li>Competition is becoming increasingly technologically advanced. </li></ul><ul><li>Mobile phone industry is becoming more volatile. </li></ul><ul><li>Nokia’s challenge for the future is to identify new avenues of growth in an industry that is becoming saturated. </li></ul>