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UBI- Business Intelligence Concepts Fall 2005
Presented by: Arend MulderRicardo SerranoHelmi Soosaar
Competition for the leading position in the mobile market:
An in depth analysis of key factors
Mobile Industry Development
Global sales of mobile handsets, m
0100200300400500600700800900
1999 2000 2001 2002 2003 2004 2005 2006*
Mobile phone sales will reach 779 m units in 2005.
More than 100 M 3G phones will be sold in 2006. More than 200 m smartphones will be sold in 2008.
0
5
10
1520
25
30
35
40
NokiaMotorolaSamsungLGSony EricssonSiemens
Screening & Evaluation ofrelevant information
Key Success FactorAnalysis
Recommendation & Action
Analysis & Interpretation
Sources
Assumptions & Unknowns
Key IntelligenceTopic
Based on Key factors which company has the edge
Motorola paving the way in emerging mktsMotorola is pioneer & will dominate
Strategy to maintain competitive position
Competitive Intelligence Information Flow
HRA® Model of SuccessFactors
"Strong growth in emerging mobile phone markets, such as South America and Africa, is driving demand for increasing numbers of entry-level devices, precisely the mass-market segments where Nokia and Motorola are among the strongest.
"Some 80% of the world's population has mobile phone coverage, but only 25% have a mobile phone. That is 3 billion people who have coverage but cannot afford mobile communications,
India could add 150 million
subscribers by 2010!
"By 2006, we could see a quarter of Africa's billion users."
Emerging markets
The growth of global mobile market : 1990 11m today 2 billion and in five years 3 billion!
Share of growth
Latin America
8%
Other Growth market 22%
Rest of Asia
Pacific 25%
China 25%
Africa/Mid-East 20%
Largest telecom market in the world
3G in 2006:Growthup to 8 b by 2008
Youth!15 % Growth till 2010
50 % from AsiaPacific Growth
Prospects: 250 M Chinese moving to cities in thenext 15 years
2005: 400 M 2010: 650 M50 % population
China - one of the mostcompetitive markets
Amoi 4 %
NOKIA 22%
Lenovo 5%SonyEricsson 5%
??? 20%
MOTOROLA 15%Samsung 10%
TCL 4%
Haier 3%
Lower end ofmarket: 30% of consumers
Konka 4%
NingboBird 8%
Leader with 22% market share
2.2 billion investments during past 20 years increasing manufacturing & R&D capacity
Strategy: maintain leading position, retain focus on hand-set business, reach the peripheria and providetailor-made high quality solutions
Ollila: »China becomingour most important market in the next 3 years » « 3G will provide us an
opportunity to improveour positions »
Currently 15 % market share -Reach 20 %
Invested more than $ 3.4 b since 1987
New build-up of sales network
Advantage: A good corporate citizen
The best in long-term commitment; most innovative; best adapted to the Chinese market; best employer in China (Source: Fortune magazine, Chinese edition)
We ve now tripled our network in the last year, he said. This gives us a platform as we launch all our new products. It gives us a much more prolific footprint to capture more share.
One to One ComparisonIn China
45Brand
25
4
5
4
4
4
Motorola
NokiaEdge
29Total
5Political relations
4Cultural Awareness
5JV/Alliances
5Sales volume
5Market Share
Nokia
1
2
4
4
4
India
High 012345 Low
Low 012345 Adv
High 012345 Low
Many 012345 Few
Low 012345 High
151017Total
13Competition
23Infrastructure
23Politics
23Legislation
35Growth
potential
AfricaChinaInfluencing
factors
Drive to technology
Technology strategies
3G products
Applications
Software
Strategies for innovation
PatentsNokia has more out-house innovationMotorola has more in-house innovation
Motorola has the better application
Nokia has the better outhouse contracts (Microsoft)
InternetEmailRoute plannerServices (weather reports, news channels etc )
Nokia is better in touch with the market
Video
Music
Games
Portable personal storage
Online personal storage
Online Archives
Universal search engine
Utility computing
The domain of Nokia. They have the outhouse contracts and the best
knowledge what the market wants
Video
Music
Games
Nokia1519Total
Nokia45Software
Nokia35Applications
Motorola543G products
Nokia35Technology Strategy
EdgeMotorolaNokiaKey Success Factors
Customer Preferences
Product Portfolio & Quality
Time to Market
Marketing Strategies
Uninvolved
New Life Harmony
Voice as a Link
Adopters
Intense
Forerunners
Nokia s Product Portfolio, Quality & prices
From basic features to business readyPush to talk to internet navigationHelps users track usageLonger talk timesPrice range (70 to 100 euros)
Motorola s Product line, Quality & Prices
Focused on battery life and basic functions like SMS. FM radio Large display and durable designVery simple, bare essentialsPrice range (25 to 50 euros)
"China was cool for us before
anyone else thought it was cool."
Over 20 new products introduced in 20055 new models for holiday seasonMillions spent on Time to Market adjustmentsIncreased distribution network
Leading the industry in new product launchTimely delivery of new product is key business strategyNew manufacturing facilities
Marketing Strategies Nokia
Focused on Handset Manufacture
only
EnhanceProduct Portfolio
Increase Distribution
Channels
Adjust Preferences for
specific markets
CustomerSatisfaction
Focused on replacement
Increase Commitment to
Emerging Markets
ImproveCollaboration on Designs
EnsureAccountability
andQuality
Aggressive Pricing
Motorola s Marketing Strategy
Functionality&
Adaptability
Low Prices
Market Segment:
Youth
Flat Distribution
Network
LogisticsSupport
Focus onMass
Market
Customer Preference
We have designed and developed phones for the African mass market and is loaded with a list of unparalleled features such as longer battery life, large displays and is above all affordable,"
Won GSM Bid for a 2nd time
Unicom $$$ Contract Pricing Strategy
under 30
Investments in R&D Leader in
Target Mktg
Increase Channel
Distribution
Pioneer in entrance tomarkets
JV to become largest
manufacturer
billions spentin R&D
investment
Strategic Alliances with local operators
In countrymanufacturingfacilities
Increaseddistribution
network
Numerous newsales offices
Nokia2628Total
Nokia45Penetration of Markets
Even55Marketing Strategies
Nokia45Time to Market
Motorola54Customer Preferences
Nokia35Product Quality
Motorola54Product Portfolio
EdgeMotorolaNokiaKey Success Factors
Nokia6676Final ranking
Nokia2628Marketing Strategies
Nokia1519Technology
Nokia2529Dominance of Emerging Markets
EdgeMotorolaNokiaKey Success Factors
Nokia
Nokia
Nokia
Marketing
Apply the Olympic medal focus strategy
Expand coverage areas
Emerging Markets1. Break out of cities to rural areas: focus on areas, where the cost of building wireless infrastructure is more cost-effective than in building a fixed line (China/India)
2. Focus on Youth: imaging and games (China/India)
Technology1. Improve pioneering
2. Increase sophisticated applications
Marketing
Introduce the voice of the customer into products
Nurture current network of alliances and distribution
Emerging Markets1. Focus on low-cost market (Africa/China)
2. JV/Liaise with locals (India) Build position as Good Corporate Citizen (India, Africa)
Technology1. Look outside
2. Know your environment