1、SAMSUNG010605BJ-kickoff2,CONFIDENTIAL,Mobile Handset Competitor Analysis: Nokia,SAMSUNG ELECTRONICS CHINA (SEC China),August 20, 2001,This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without
2、 prior written approval from McKinsey it is not a complete record of the discussion.,SAMSUNG010605BJ-kickoff2,1,OVERVIEW OF COMPETITOR ANALYSIS FRAMEWORK,1. Background information,Location Registered capital Management team Equity structure,Starting year Number of employees Era analysis,4. Value cha
3、in strategy,5. Organization and ownership,6. Financial performance,Focus on Marketing, advertising and promotion Distribution (channel and sales force),Organization structure Ownership structure,Sales Profit,2. Strategy,3. Product/market,Mission Vision Corporate strategy Market position,Key product
4、offerings Key customers Value proposition Geographic focus Pricing,SAMSUNG010605BJ-kickoff2,2,KEY ISSUES TO PROBE - NOKIA,Strategy,Product/market,Value chain strategy,Organization & ownership,Financial performance,How does Nokia position itself now and in 2005? What are Nokias product and value deli
5、very system strategies that differentiate itself from its competitors? How does its current market position help achieve its goal? What is Nokias key product offerings and how does Nokia differentiate its products from its competitors? What customer segments is Nokia targeting at? In which geographi
6、c areas is Nokia strong or weak? How does Nokias product development meet customer requirement? How do Nokias distribution channels differ from its competitors? Why does Nokia launch exclusive specialist shops? How does Nokia provide customer services? How much does Nokia invest in JVs and WOFEs in
7、China, and what are the main drivers? How does Nokia organize to enable the JVs and WOFEs to work together? How strong is Nokias performance and what are the major contributors? What is Nokias performance trend?,SAMSUNG010605BJ-kickoff2,3,BACKGROUND INFORMATION,1. Background information,Location Reg
8、istered capital Management team Equity structure,Starting year Number of employees Era analysis,4. Value chain strategy,5. Organization and ownership,6. Financial performance,Focus on Marketing, advertising and promotion Distribution (channel and sales force),Organization structure Ownership structu
9、re,Sales Profit,2. Strategy,3. Product/market,Mission Vision Corporate strategy Market position,Key product offerings Key customers Value proposition Geographic focus Pricing,SAMSUNG010605BJ-kickoff2,4,NOKIA IS RELATIVELY A LATE-COMER TO CHINA; HOWEVER IT HAS GROWN RAPIDLY TO BECOME A MARKET LEADER
10、IN MOBILE COMMUNICATION,Background,Implication,Leader in mobile communication globally and in ChinaAl though a relatively later-comer to China, has invested heavily in its Chinese businessFocused product lines with Nokia network offering mobile, broadband and IP network infra-structure, and Nokia mo
11、bile offering mobile handsets,Source: Nokia Press Release,SAMSUNG010605BJ-kickoff2,5,STRATEGY,1. Background information,Location Registered capital Management team Equity structure,Starting year Number of employees Era analysis,4. Value chain strategy,5. Organization and ownership,6. Financial perfo
12、rmance,Focus on Marketing, advertising and promotion Distribution (channel and sales force),Organization structure Ownership structure,Sales Profit,2. Strategy,3. Product /market,Mission Vision Corporate strategy Market position,Key product offerings Key customers Value proposition Geographic focus
13、Pricing,SAMSUNG010605BJ-kickoff2,6,NOKIA POSITIONS ITSELF AS A LEADING PRODUCT AND SYSTEM SUPPLIER IN THE FAST GROWING MOBILE COMMUNICATION INDUSTRY,Vision,To lead mobile communication through the integration of mobility with internet and the innovation of new service models,Strategy,Focuses on mobi
14、le communication products and aims to be a total solution provider in mobile communication Regularly introduces consumer-oriented products with emphasis on designs and functions,Builds strong local alliance through JVs with Chinese partners and R&D centers with Chinese universities Builds exclusive
15、specialist shops to bring one-step solutions to end users Builds fixed and mobile service stations with wide geographic coverage including rural areas,Source: Nokia press Release,SAMSUNG010605BJ-kickoff2,7,NOKIA HAS CAUGHT UP WITH MOTOROLA AS MARKET LEADERS IN MOBILE HANDSETS SINCE 1999,Monthly mark
16、et share development (Percent of market in units sold),98,99,Jan 00,Dec 00,Nokia,Motorola,Siemens,Ericsson,Source: IDC, McKinsey Analysis,SAMSUNG010605BJ-kickoff2,8,UNLIKE ITS COMPETITORS, NOKIAS MARKET SHARE IS THE SAME AMONGST NEW AND REPURCHASE BUYERS,Others,Nokia,Ericsson,Siemens,Motorola,Repurc
17、hase Buyers,New Buyers,Total market,Percent of units sold, 2000 4Q,25%,75%,% of Market,100%,Definition: New buyer:never bought mobile phone before Repurchase buyer: bought mobile phone before,Source: IDC, McKinsey analysis,SAMSUNG010605BJ-kickoff2,9,AMONG REPURCHASERS, NOKIAS CHURN RATE IS HIGH, BUT
18、 AT PAR WITH MOTOROLA,Percent, 2000,Ericsson,Nokia,Alcatel,Others,Siemens,Brand bought by previous Nokia owners,Motorola,Samsung,Motorola,Alcatel,Others,Siemens,Brand bought by previous Motorola owners,Nokia,Samsung,Ericsson,Source: McKinsey analysis,SAMSUNG010605BJ-kickoff2,10,PRODUCT/MARKET,1. Bac
19、kground information,Location Registered capital Management team Equity structure,Starting year Number of employees Era analysis,4. Value chain strategy,5. Organization and ownership,6. Financial performance,Focus on Marketing, advertising and promotion Distribution (channel and sales force),Organiza
20、tion structure Ownership structure,Sales Profit,2. Strategy,3. Product /market,Mission Vision Corporate strategy Market position,Key product offerings Key customers Value proposition Geographic focus Pricing,SAMSUNG010605BJ-kickoff2,11,Nokia has a narrow product portfolio focusing on mobile communic
21、ation products, and mobile handset is Nokias key product offeringNokia offers consumer-oriented handsets with emphasis on designs and functions, targeting medium and low end customers. Its main customer segments are the young and fashionableNokias fashion phones are relatively strong in major cities
22、 and the south region; however Nokia is relatively weak in the fourth-tier cities,KEY MESSAGES - PRODUCT/MARKET,SAMSUNG010605BJ-kickoff2,12,MOBILE HANDSET IS NOKIAs BIGGEST PRODUCT OFFERING AND ITS ESSENTIAL PART OF TOTAL SOLUTIONS IN MOBILE COMMUNICATION,Nokia mobile handsets,Nokia product offering
23、s,Nokia network,Products,Now and future,Nokia 3310 for young people Nokia 8210 for fashion chaser Nokia 6210 WAP for business professional Nokia 7110 WAP with full Chinese interface Nokia 9210 as personnel communicator Nokia 8310, 6310 for GPRS and WAP,Mobile network Broadband network IP network,Lar
24、gest mobile handset supplier in the world with above average growth in sales and more than 30% global market share Views mobile handset as a digital convergence point for multimedia services Supports blue tooth between mobile handset and PC in Nokia 6310 for mobile professional Develop WCDMA handset
25、s with DoCoMo Develops homenet products such as multimedia terminals in Nokia Zhongxin,Provides multimedia service network solutions for operators and ISP entering the mobile communication fields Nokia network covers many cities and areas in China including Beijing, Shanghai, Hong Kong and Taiwan et
26、c. Aims to be a total solution provider for mobile communication,SAMSUNG010605BJ-kickoff2,13,NOKIA EMPHASIZES ON CONSUMER-ORIENTED DESIGNS AND FUNCTIONS,Fashion,Business,Basic,Fun,Changeable cover,Sub-100g,Voice-dial,Recording,Vibration,Tri-band,WAP,Built-in modem,IR-port,Chinese input,Li-Ion batter
27、y,SMS messaging,Games,Composable/ downloadableringer tone,8210,6210,P7689,L2000,V998+,L2000WWW,Fashion,Classic,Price in China (RMB),2652,2878,2369,1800,1435*,1452,Equivalent features, Nokia more fun/fashion vs. Motorola more functions,Motorola offers lower price models with similar features, tri-ban
28、d and WAP,* Nov. 2000 price,Key Differences,SAMSUNG010605BJ-kickoff2,14,WITHIN CHINA, NOKIAs FASHION PHONES PERFORM BETTER IN SOUTH CHINA AND LARGE CITIES,North region,East region,South region,China average,Beijing,Shanghai,Shenzhen,Guangzhou,Market share,Percent, 2000,Source: McKinsey Analysis,SAMS
29、UNG010605BJ-kickoff2,15,Tier 1,Tier 2,Tier 3,Tier 4,Nokia,Motorola,Others,NOKIA IS RELATIVELY WEAK IN THE IMPORTANT 4TH TIER CITY MARKET,Percent market share, 2000,Ericsson,Siemens,18%,19%,23%,40%,Tier size as % of total,100%=,Million units,6.7,7.0,8.5,14.8,Source: McKinsey Analysis,SAMSUNG010605BJ-
30、kickoff2,16,Source: Retail Audit, McKinsey analysis,AND THIS WEAKNESS IN 4TH TIER CITIES SPANS MOST PROVINCES,Inner Mongolia,Hunan,Yunnan,Anhui,Guangdong,Fujian,Zhejiang,Heijongjiang,Jilin,Henan,Jiangxi,Hebei,Shanxi,Liaoning,Sichuan,Shandong,Jiangsu,Shanxi,Hubei,Gansu,Guizhou,Percent market share, N
31、okia,Market share Percent,Province,Tier 1/2/3 city,Tier 4 city,SAMSUNG010605BJ-kickoff2,17,VALUE CHAIN STRATEGY,1. Background information,Location Registered capital Management team Equity structure,Starting year Number of employees Era analysis,4. Value chain strategy,5. Organization and ownership,
32、6. Financial performance,Focus on Marketing, advertising and promotion Distribution (channel and sales force),Organization structure Ownership structure,Sales Profit,2. Strategy,3. Product/market,Mission Vision Corporate strategy Market position,Key product offerings Key customers Value proposition
33、Geographic focus Pricing,SAMSUNG010605BJ-kickoff2,18,Nokia is not regarded as a technology leader, as compared with Motorola; however, it spends a great amount of effort in understanding customer requirements and tailors its product to meet these requirements.Nokia employs PTAC, CellStar, Beijing Te
34、lecommunication Equipment Factory, Bright Point, Express Fortune, and Tech Glory as the first-tier resellers to distribute handsets through authorized stores and counters. The distribution channels are relatively flat.While its retail shops are growing rapidly to approximately 900 around the country
35、, Nokia also develops exclusive specialist shops in order to provide “one-step” solutions to end usersNokia implements a highly efficient customer service system with 250 service stations and mobile service stations for rural areas. It provides good pre- and after sales service,KEY MESSAGES - VALUE
36、CHAIN STRATEGY,SAMSUNG010605BJ-kickoff2,19,NOKIA IS STRONG AT MARKETING, SALES AND SERVICE, BUT WEAK AT TECHNOLOGY,StrengthsLevers for improvement,Established R&D center in 98/99 in Beijing for China market, with 150 research staff Strong in low end development Good product quality and designWeaker
37、position in high end segment and high end technology Position in low end under attack,Scalable local production Optimized logistics,Country-wide distribution channels and strong channel management High retailers preferenceLower rating of retail support Retailer preference not translating into higher
38、 market share,Strong brand awareness and preference Promotes “technology based on people” Awareness and preference lower than Motorola Brand in young market under attack Low technology image,Highly efficient customer service system with 250 service stations and mobile service stations for rural area
39、s Good pre- and after sales service, e.g. “one hour repair” service,SAMSUNG010605BJ-kickoff2,20,.on Nokia,on Motorola,NOKIA HAS REPUTATION GAP AS TECHNOLOGY LEADER, AND TARGET DIFFERENT CUSTOMER SEGMENTS FROM MOTOROLA,Nokia has good product designs,Nokia phones are for female or younger people,Nokia
40、 is second to upgrade products,Motorola products are more formal,Motorola always introduces new technology to the market first,Loyal user is white-collar worker,.on technology leadership and innovation,.on design, on typical loyal users,SAMSUNG010605BJ-kickoff2,21,NOKIA DISTRIBUTES THROUGH SIX FIRST
41、-TIER RESELLERS AND DEVELOPS EXCLUSIVE SPECIALIST SHOPS,Nokia Channel Structure,Late entry to the China market with less historic overhead Flat distribution channels Develops exclusive specialist shops Provides after-sale services,Source: China Computer Journal,Vendor,1st-tier resellers,Consumers,2n
42、d-tier resellers,Retailers/retail chain stores,6%,3%,91%,22%,33%,36%,6%,33%,58%,RationalesNokia employs PTAC, CellStar, Beijing Telecommunication Equipment Factory, Bright Point, Express Fortune, and Tech Glory as its 6 first-tier resellers Nokia requires resellers to report the promotion plan and p
43、roduct ordering plans a quarter in advance, and since the demand for handsets tends to fluctuate across promotional programs, this inflexible strategy generally limits the potential gain when market demand changes across promotions Close to 900 retail shops and counters country-wide, with 50% growth
44、 from 1999 Form exclusive specialist shop to provide one-step solution to end users,SAMSUNG010605BJ-kickoff2,22,ORGANIZATION AND OWNERSHIP,1. Background information,Location Registered capital Management team Equity structure,Starting year Number of employees Era analysis,4. Value chain strategy,5.
45、Organization and ownership,6. Financial performance,Focus on Marketing, advertising and promotion Distribution (channel and sales force),Organization structure Ownership structure,Sales Profit,2. Strategy,3. Product /market,Mission Vision Corporate strategy Market position,Key product offerings Key
46、customers Value proposition Geographic focus Pricing,SAMSUNG010605BJ-kickoff2,23,Nokia has 7JV and 1 WOFE in China, among which Nokia Beijing and Nokia Dongguan are manufacturing mobile handsets. Nokia Beijing has annual production capacity of 30 million units in 2001.The main drivers for Nokia to s
47、etup JVs and WOFEs in China include building local alliances, localizing manufacturing to meet domestic market demand and increase exports, and technology transfer encouraged by the Chinese governmentWith a narrow product portfolio, Nokias organization is product focused with coordinated sales and m
48、arketing effort across JVs that manufacture the same products,KEY MESSAGES - ORGANIZATION AND OWNERSHIP,SAMSUNG010605BJ-kickoff2,24,NOKIA HAS 7 JVs AND 1 WOFE IN CHINA, AMONG WHICH 2 JVs ARE DEVOTED TO MOBILE HANDSETS,Main drivers,Builds successful alliance with Chinese partners Localizes manu- fact
49、uring for major products Meets domestic market demand and increases exports Realizes technology and skill transfer in development, manufacturing and management Helps Chinese partners improve competitiveness in China and globally,Nokia Beijing, Hangxing telecom,Established year,Product offering,1995,1995,1997,1994,2000,1999,1998,GSM system and equipment Mobile handsets,
