nokia
TRANSCRIPT
NOKIA CEO’S DILEMMA
Hitesh Malhotra
NOKIA LOSING MARKET SHARE Nokia plans to build a new global mobile ecosystem; Windows Phone would
serve as Nokia's platform. Nokia stock was down 4.1 percent at 6.715 euros by 1429 GMT on a flurry of
analyst downgrades Nokia estimated market share shrunk to 31 percent in the fourth quarter of last
year Nokia has a long product development cycle. Nokia has renewed an approach to capture volume and value growth to
connect “the next billion” to the Internet in developing growth markets Nokia has focused investments in next-generation disruptive technologies;
Meego and Nokia Research Center Nokia has a new leadership team and organizational structure with a clear
focus on speed, results and accountability
Focused competitors taking market share with: -An entire ecosystem -Several price ranges -Production/Innovation The new version of Windows Phone OS is still under construction. Microsoft’s share of the U.S. smartphone platform market dipped 1.7 percent
between October 2010 and January 2011, from 9.7 percent to 8.0 percent
Situation
Complication
Key Issue
Can Nokia keep its leading position in the market?
Issues Analysis
1
1.1
1.2 2.1
2.2
3.1
3.2
Can Nokia keep its leading position in the market?
Will Nokia benefit from partnership with
Microsoft?
Can Nokia’s Windows Phone
dominate the smart phone market?
Can Nokia’s partnership
with Microsoft increase
revenue and market share?
Will Microsoft help Nokia
regain trust in its investors?
Is outsourcing operating system
cheaper than developing in-
house
Is Windows Phone going to create an
ecosystem (as its rivals)?
Can Nokia benefit from reorganizing
its corporate structure?
Could Nokia apply the new
structure successfully?
Can the Windows platform
compete with the already established
OS?
1.2 2.1 3.1
2 3
Work Plan
LENGTH OF THE PROJECTNumber Activities Assigne
d To 1 2 3 4 5 6
1 Market Research Takuya
2 Conduct a research for the stock trend Clara
3 Research on investors evaluation Teodora
4 Analysis of the current growth Prat
5Research on Nokia’s
strategy with their R&D decision
Prat
6Research on Nokia’s
strategy with Symbian OS phone
John
7 Research on Windows Phone app market Takuya
8Research on Windows Phone market share in comparison
with other OSTeodora
9 Competitive Analysis Prat
10 Financial Statement Analysis Clara
Issues Analysis
Nokia can regain its leading position in the market
1.Nokia will benefit from the partnership with Microsoft.
2.Nokia will benefit from reorganizing its corporate structure.
3.Nokia’s WP7 can dominate the smart phone market.
Issues Analysis
1. Nokia will benefit from its partnership with Microsoft
1.1 Nokia’s partnership with Microsoft will increase revenue and market share1.2 Microsoft will help Nokia regain trust in its investors
1. Nokia will benefit from the partnership with Microsoft
1.1 Nokia’s partnership with Microsoft will increase revenue and market share
1.2 Microsoft will help Nokia regain trust in its investors
1. Nokia will benefit from the partnership with Microsoft
2. Can Nokia benefit from reorganizing its corporate structure
2.1 Outsourcing operating system is cheaper than developing in-house.
2.2 Nokia can apply the new structure successfully
2. Can Nokia benefit from reorganizing its corporate structure?2.1 Outsourcing operating system is cheaper than developing in-house
2. Can Nokia benefit from reorganizing its corporate structure?2.1 Outsourcing operating system is cheaper than developing in-house
Cost of acquiring WP7 for one handset= $6.99
Cost for converting 461 million = $6.99X 461 = $3.2 billion which is less than Nokia’s R&D expenditure of $3.9 Billion in 2010
2. Nokia can benefit from reorganizing its corporate structure2.2 Nokia can apply the new structure successfully
Its cheaper to execute outsourcing than to develop
Existing Symbian users are looking for WP7 features
Nokia can capture additional market share of WP7 users.
3. Nokia’s WP7 will dominate the smart phone market
3.1 Windows Phone is going to create an ecosystem (as its rivals)3.2 The Windows platform can compete with the already established OS
3.1 WP7 is going to create an ecosystem (as its rivals)
3. Nokia’s WP7 can dominate the smart phone market
Can the Windows platform compete with the already established OS
3.1 WP7 is going to create an ecosystem (as its rivals)
3. Nokia’s WP7 can dominate the smart phone market
3.2 The Windows platform can compete with the already established OS
3. Nokia’s WP7 can dominate the smart phone market
Summary
Nokia can regain its leading position in the market
1.Nokia will benefit from the partnership with Microsoft.
2.Nokia will benefit from reorganizing its corporate structure.
3.Nokia’s WP7 can dominate the smart phone market.