National Technical University of Athens - Athens University of Economics and Business AthensMBA ° Working Team: Professor: Deligiannis George Dr. Lioukas Spyridon Pertsinis loannis ° Rihani Michael Vitsios EfstratiosNokia Corporation Nokia Corporation is a Finnish multinational communications and information technology company, founded in 1865. Nokia is headquartered in Espoo, Uusimaa, in the greater Helsinki metropolitan area. Nokia Leadership Team Revenue: [€23.22 billion (2015) Chairman —Risto Siilaasma Operating income: J €5.453 billion (2015) President and CEO — Rajeev Suri Profit: | €1.68 billion (2015) CFO-Timo thamuotila Total assets: J €45.06 billion (2015) Total equity: J €9.44 billion (2015) Number of employees: 114,256 What Nokia does + Internet of Things (loT) + Virtual Reality + Ultra Broadband + [Pinterconnectivity + Cloud + Innovation Ecosystem + Digital Health + Services NOKIAInnovation and Possibilities Identity Nokia isa global leader in creating the technologies at the heart of our connected world. Activities Innovators of the global nervous system: the evolution of networks into a seamless fabric of interconnected intelligence supporting our digital lives. Sustainability Nokia invents, designs, and deploys sustainable technologies that make a real difference in the lives of people. NOKIAHistory + Aequisition of Alcatel Lucent ~ 16.5bn (2015) + Mobira Cityman 900 - FIRST FULLY PORTABLE + Sale of HERE Maps to a car MOBILE PHONE (1987), ‘company consortium for 2,Bon + Development of GSM Mobile Standard (with Siemens) * the Digital Health unt was founded Foundation of Nokia + Worlds First GSM Call using NOKIA's equipment (1991) __(Withings acquisition ~ 2016) Forest and power industry + World's First commarcially available mobile phone + HMID Global and NOKIA Manufacturing telephones, electrical (NOKIA1011 - 1982) Technologies will ezte NOKIA ‘cables and rubber products + Best seling Mobile phone brand (1998) branding devices (2016) OS present + Creation of Nokia Corporation (1967) + Wilitary equipment + Mobile radios. telephone switches, capacttors, ‘chemicals and personal computers + Launching of Mobira Senator car phone — NOKIA'S FIRST MOBILE PHONE (1982) Pioneer of mobile gaming (Snake) Creation of best selling phone of all ime (Nokia 1100 ~ 2003) Creation of Symbian Loss of market share due to iPhone (iOS) and Android Stock price fell below 2 doliars, almost became bankrupt (2012), NOKIA purchased Siemens stake in NOKIA-SIEMENS Networks (2013) ‘Acquisition of NOKIA's mobile devices unit by Microsoft (2014) NOKIAInnovators of the global nervous system Internet of Things (loT) Enabling theInternet of Things, with massive-scale, secure and low-energy connectivity for billions of devices, - Digital Health Inspiring individuals to take control oftheir health for the benefit of society through ital health technology. Ultra broadband Pioneering ultra broadband solutions to deliver lightning fast wireless and fixed broadband access, anywhere, making the maximum use of existing assets e Virtual Reality Pioneering transformative experiences through immersive VR technology. > J@e Cloud Connecting society tothe cloud, combining virtualization, intelligent analytics and orchestration to build programmable, performance-optimized networks that dynamically adapt. ss # . Innovation Ecosystem Help individuals, communities. and industries create a better future IP Connectivity Creating the high-performing IP networks that underpin the digital worid, enabling customers to reduce time and ‘iskin launching new services, and rapidly seale to meet demand sig Services Helping customersto transform to new technologies and new business models, through professional services spanningconsulting, designing, planning, implementing and operating, NOKIANokia is everywhere 150 Countries NOKIA(6) Nd Analysis of external and internal environment NOKIAAnalysis of External Enviroment PESTEL ANALYSISPESTEL Political Factors Every country has its own rules and regulations NOKIA had to stop its business in some cases due to strict regulations Taxation policy, government stability and employment laws varies from country to country In some countries NOKIA has to follow minimum wage laws (i.e. India) Awaiting developments following the results of US Elections (Trump’s victory) NOKIAPESTEL Economical Factors NOKIA leaves great impact on the economy of Finland Finland’s government helps NOKIA to secure the jobs of the workers. The consistent change of the exchange rates across the world affects the business The recession on the global economy and the bad economic situation have a negative influence on the interest rates Increase of the borrowing amount from the banks in order to carry out business activities NOKIAPESTEL Social Factors NOKIA has to understand the new trends in the market Technological developments are made quickly in the European markets The company has to understand the nature of people (i.e. some people need innovative features while some other are looking for a simple and inexpensive solution) Better understanding of the emerging markets’ culture is crucial in order the company to meet their demand NOKIAPESTEL Technological Factors Various other competitors are introducing new handsets with latest technological developments Improvement of the quality of internet, camera, e-mail, call record is essential for NOKIA Partnership of Microsoft increased the trust of the clients New technologies leave their impact on minimizing costs Need of new technological developments on online gambling, MP3 players and high definitions Tvs NOKIAPESTEL Environmental Factors Moral obligation to deal with the issue of global warming The company should take care while disposing phones, accessories and lithium batteries in order to ensure safety and protection of the atmosphere Globally the rules and the regulations about environmental consciousness has become more strict NOKIAPESTEL Legal Factors NOKIA should protect its products and new technologies with patent applications Avoidance of copying ideals of features of other companies Ascertain that various plants follow the working rules and regulations and nothing is happening against the law NOKIA should give proper attention to the privacy of its customers NOKIA5 Forces Analysis (PORTER) Barriers to entry Rivalry between ele) vey else hc ec} Threat of Power of suppliers Substitutes NOKIA5 Forces Analysis (PORTER) Breech kartsy eat of substitutes ees gana yt Pesaran ayes! +Secure Patents +Strong brand identity of existing players “High expected retaliation “High capital requirements (high RED, marketing and PR coss, etc) “Increased buyers volume *Buyers now have more options due to increased numberof competitors (Apple, ‘Samsung, Google, etc) *Low buyer inclination wo substinute *High price ~ performance ratio Low bargaining power “High diferentiation of inputs *Low switching costs +strong brand identity Low product differentiation “Ent of companies from emerging counties NOKIAConsumer Market Segmentation Certo) Sirsines Emons Actinrers. Sshors_—Sirsinws plains Aekinents Shivers Sardis trates ry el i phones Large Markets with high penetration opportunities Large Markets with moderate penetration opportunities Markets with low penetration opportunities NOKIAMajor Accounts Market Segmentation So Pte ees aed cd Maries withhich penevationepperuntis ign vestment opneruntes Markets withlow peresaton opperturitis Moderate inesment epmortunties Low inestment opportunites NOKIACritical Success Factors (CSF) ret Cee Cir) Multinational Data Networks Economies of scale Intemational marketing Network coverage Telecommunications equipment Alter sales support Seminars for the customers Phones and Tablets Brand awareness Development of applications and emphasis of operating systems Good price-quality ratio Innovation technologies Strong R&D department Strong added value of new technologies for the customer NOKIAConclusion Analysis of External Environment Moderate industry’s attractiveness * High growth rates * Innovation and knowledge-intensive activities = High competitor's strength = High investment demand Opportunities * Penetration in undeveloped-emerging markets * 5G data networks in Western Europe, USA, etc. * Development of technologies regarding digital health application and hardware * loT creates great potential Need for critical strategic decisions = Alliances, distribution center, etc. = Economies of scale NOKIASWOT Analysis Weaknesses ey Sel ay See reac ote ee Qreataies ae cee Network Pee ener Petes een Bare ec? een eres eee et ec vem Peer ear limited number of era euee rs NOKIAStrengths Nokia has a well known brand name that has huge impact on technological world Huge experience in turnover strategies Global presence (about 150 countries) Acquisition of Withings will be a huge asset in the sector of Digital Health Strong strategic advantage in wireless and wireline services after the acquisition of Alcatel Lucent Highly qualified personnel NOKIAWeaknesses Criticism for poor customer support and sales services High long-term interest-bearing liabilities and short-term borrowings Recovering after huge mobile devices/operating system failure The company took long time to enter in mobile phone market and it has lost huge market share Concern for employees and public image not clearly stated NOKIAOpportunities Mobile users will be more than 9bn in 2020, and mobile data users will be over 4bn by the same time Cloud computing is expected to be massive by 2020. According to todays data Cloud computing generate more than $45bn. Nokia share price is around 4.33$ (27/11/2016) and considered very attractive for the investors. ETA Devices acquisition targets to improve battery efficiency and considered as a core project for NOKIA. Nakina acquisition targets to enhance Network and Cyber security (due to researches, the number of Hackers will be at an all time high by 2020) The company can introduce its products in the newly emerging markets NOKIAThreats The rivalry between competitors will be massive in all respective sectors Many technological giants Unstable economical and geopolitical environment Environmental rules and regulations Dependent on a limited number of customers and large multi-year agreements (Network Infrastructure sector) Possibility of unsuccessful implantation of new strategic plans NOKIAConclusion SWOT Analysis Nokia’s biggest strength is the culture An organization with long history which knows how to escape from difficult decisions and survive Lot of opportunities to increase the earnings from the new strategy about new technologies Cloud and IoT is the future if aren’t the present Preservative investments in startups like Withings or Nakana systems which means low price acquisition with high ROI Selective investments in colossus like Alcatel Lucent The vision is a hard issue. We don’t know if the organization could understand fully the vision of new Nokia. Nokia tries to create an easier way of life. Finally in a liquid market battlefield is very difficult to recondition the strategy plan immediately and be the leader. NOKIAStrategic Position Analysis NOKIAMISSION rit GOAL Nace Pt METRIC oration Micon This element is transversal and perennial Reread Cee LN ‘The key indicators for measuring the success of your objectives. een tency Poetencetg aid ea er ed eee et) ou) Cae ane66 Mission statement “Shaping the future of technology” Nokia is shaping the technologies at the heart of our connected world, to transform the human experience NOKIA66 Vision “To expand the human possibilities of the connected world” At Nokia, we are shaping the future of technology to transform the human experience. NOKIAhttpsy/www.youtube.com/watch?v=R5nxtkDzZUA NOKIAObjectives ry m Leading in network Expanding in adjacencies Diversifying by providing infrastructure, and gaining software network performance and converging mobile, fixed, leadership for network flexibility for large-scale IP and optical networks, optimization, service enterprises optimized by and for the innovation, and customer Cloud experience enhancement CMa ea es ele nea adden taiteaome ieee new pockets of revenue growth for network vendors Leveraging new business opportunities created through the Internet of Things models and createhttps://www. youtube.com/watch ?v=GoJOZOnJaMcStrategy “Differentiation strategy with focus to innovation, new technologies, security and quality of service” NOKIATactics Focus on social Networking and other Cloud —based Services that are increasingly accessed through mobile devices Enhance Cloud —based applications and promote loT Services and products in order to evolve the ongoing digitization of business processes as well as people’s lives Take seriously into consideration the needs for enhanced network and application security and privacy to protect individuals, businesses, public services and national interests Converge disparate Network technologies in orderto enhance network performance and profitability and simplify networking services Focus on open-source ecosystems through application programming interfaces ("APIs") in order to decouple from hardware, NOKIAResources and Skills Perens fetch: Continuous Training, Easy access to R&D equipment Constant renewal of technological equipment Various patent Applications, Geographical Diversity of T Network, Bell Labs support Human Resources Recruitment, Management, Providing direction Specialized staff (I), Unique Organizational culture, Specific technological environment, The Finnish model of industrial relations (IR) Tong term liabilities and borrowing, Strong Net cash and other liquid assets almost bn Finance Financial support for R&D dollars, Finnish Subsidy system for innovative companies Broad advertisement and discount policy, In__‘Global Presence, Brand Awareness, Variety of Sales & Marketing depth market segmentation services Trustworthy relationships with suppliers, Innovative devices, intellectual property Production Economies of scale, Outsourcing produc Personal consultantforenterpries, Online “Operations supportaystem” ar aservice After Sales Support ~ 5) Pe oii customer support makes costs both lower and more predictable NOKIADinstictive skills (KAY) Relations Architecture Reputation International & Domestic Public Relations, Relationships with staff, Relationships with carriers in the industry High end technology, Quality products and services, Strong brand awareness Innovation Strategic Elements Highly skilled and specialized staff, Innovathons (Innovation Competition by Nokia Bell Labs) Ownership of Bell Labs, Withings, Nakina, ETA System, Alcatel Lucent NOKIAUnique Elements Bell Labs Bell Labs, considered research arm, produces disruptive innovations for the next phase of human existence. This Kuman'challenge has been thecharter for Bell Labs for 90 years and ledto a wealth of industry redefining innovations, eight Nobel Prizes and countless other honors. Bell Labs is pioneering the Future X projects, which are thirteen distinct new technology solutions—each of these aims to ensure that tomorrow's networks will be high-performing, low-cost, efficient, personalized and always-on. Withings Making the most of innovation, technology and design, Withingsinventssmart products and apps that fit into any lfestylethat lets you trackuhat matters s you can improve you everyday well-being and aim for better long term health The missions simple: For individuals and families to benefit from the connected heath revolution Patents and Alliances Intellectual property assets are fundamental to Nokia, which now controls three distinct P portfolios: the Nokia Networks, Alcatel Lucent and Nokia Technologies portfolios, The first two are of particularrelevance to the Networks business. Nokia Networks portfolio includes approximately 10.000 individual patents, Alcatel Lucent Portfolio approximately 47.000 individual patents Alliance with HMD Global for the production of Nokia branded mobile devices NOKIAStakeholder needs and Expectation of Nokia: Stakeholders are those groups and people who are interest of business and organizational activities. Nokia is one of the largest companies, so its stakeholders are major part of Nokia Corporation. NOKIAInternal Stakeholders Shareholders: Nokia always try to do better for them. Shareholders arrange the major part of capital for organization development as they part of owner of an organization. Shareholders receive share of profit, bonus, and dividend as well as reward. Its company policy to give them bonus share, dividend, premium share as they are feel secured to invest money more. Employees: Nokia regularly involve employees in discussions about issues such as corporate values, career and competence development, performance, diversity and work-life balance that's meet employee's need and expectations. Suppliers: Suppliers are very effective role for an organization. Nokia understand the important of them and try to meet their needs and expectation such as early payment, advanced payment, competitive value, communication regularity, preference of product etc. NOKIAExternal Stakeholders Customers: Nokia increasingly engage with customers on issues related to sustainability, Network operators - Nokia's biggest customers - expect to meet high standards of corporate responsibility in their own operations and increasingly in their supply chain. Nokia continues to receive enquiries and assessment requests about social and environmental performance from their operator customers. Nokia respond to those requests through its normal customer account management interface. Government: Nokia is operating their business in world wide. Nokia always obey the government rules and regulation and pay tax vat as per government rules. Nokia create a giant employment all over the world and it is a government basic expectation from a company. Local Community: Nokia is always promised to help all kind of local community all around the world Nokia sponsored for AIDS hospital, cancer hospital, all kinds of national game. Nokia sponsors many research collaborations with industrial and academic partners. Nokia's goal is to strengthen co-operation between researchers and academics. Competitors: All companies in the industry are impacted by the way others conduct business. In many cases competitors also have a strong interest in your business when you target the same types of customers. Competitors may also be stakeholders in a similar way as your business partners regarding industry-wide promotions and lobbying efforts with governmental officials. NOKIABusiness Community Nokia works in collaboration with other companies on key issues through a number of industry organizations, such as: The Global eSustainability Initiative (GeSI): We participate in the Supply Chain Working Group, e- Waste Working Group and Climate Change Working Group. International Chamber of Commerce (ICC) World Business Council for Sustainable Development (WBCSD) Bank and Insurance Company: Nokia always meet the expectations of bank and insurance company. They are taking loan from bank and investing money for other issue as well and paying interest. Media: Nokia playing a vital role for increasing the media such as TV, newspaper, magazine and any other media. Nokia pays high rate of amount for promotion their product for advertisement with those media. NOKIACritical recourses and skills for Strategy Planning Management Expertise Financial Position Personnel Specialized Personnel Marketing Relations Architecture IT | 10. Building infrastructure BEL Le 11. Cost of services eae 12. Innovation efile) NOKIACritical recourses and skills for Strategy Future Projections High Strength and Influence Generally passive and litle involvement Moderate strength, very etfective role Great impact, High level of strength and influence Low Level of Influence High NOKIA Low strength but promotionis of high interestAlternative Strategies NOKIAStrategic Decisions Creation of Alternatives Which base Basic Strategies Low cost/ price Diversification * Focus + Mixed Which direction How Alternative methods + Organizational Growth + Acquisitions + Merges + Alliances + Consortium NOKIAGrowth Rates and Attitudes to Risk Existing Existing Markets New NOKIAAnsoff Matrix (Nokia 2016) Existing Markets New Existing CRO ena an ad reir elo miter ans F Creare CMa cere eaagsty Root ect Dorie a cn ear) EPRICE rad eee Meco y Pet Meee ewes Cae Bear sae Beene Cur cicns Pete nace ca Peer Coane cot Bere snteaken uae Pence Mn ae NOKIAStrategy Evaluation The analysis of Ansoff matrix helps Nokia to realize that if it remains in the existing market with existing products or try to grow init, it’s possible to be a wrong strategic decision. By following diversification strategy Nokia will create added value. Therefore Ansoff matrix does not work for Nokia’s example. The risk will be contained in diversification model (vertical & horizontal). NOKIAAlternative strategies Insurance plan strategy Nokia as an insurance data provider. As the average age in all continents is increasing, we need to have more facilities for the older people. At the same time, the health of these older people must be under monitoring and these people have to be active parts of society. In order to have good results in health care system, the premiums must be under regulations because of its structure. The premiums aren’t representative of the cost of health services. With this project the company is about to edit all the necessary data to be an insurance contributor for every individual citizen. Raedcatea B) “INSURANCE NOKIAAlternative strategies Insurance plan strategy Using Digital Health Nokia could create a huge data center with statistics and results for the users‘of digital health accessories. These data will be analyzed with the service package of Ultra-Broadband(56), Cloud services, IP Interconnectivity and Internet of Things. Ultra-Broadband(5G) as a data transport system: 5G broadband gives more choices to users of any hardware system. For example wearing a Withings watch, you can have real time data as blood pressure, or using the thermometer, temperature, saved automatically in a data center. Cloud Services as a data center: Cloud services are an unlimited “hardware” storage system and helps to save data almost free on the web. By using wearables all the data would be collected to the “data center” which is the cloud. NOKIAAlternative strategies Insurance plan strategy IP Interconnectivity as a secure provider: All data concerning health are highly secured. They must be transferred without human interruption. Furthermore, interconnectivity will help the applications to be more efficient. Finally using the IP interconnectivity, the important platform will be created in order to analyze all the data securely with the help of Nakana Systems. loT as a self-driving system: loT is the future of mobile devices. By the help of Withings, Nokia will have all the necessary real time data of any citizen. It can also predicts a disease problem like heart attack, saving that way the citizens life and at the same time helping insurance contributor from spending operating costs. Finally loT doll the procedures automatically, NOKIASFA Evaluation of Alternative Strategy Suitability(s) Feasibility(F Acceptability(A) Strategic Decision swoT Culture Resources _ Skills Stakeholders Risk Diversification ee “e wee wee tee ae Acquisitions ee Merges wee a ee ee ee + Alliances hie te eee ek ood * Consortium ee ry wee *e wok * nsurance plan ee ee eee tee tee tee Alliances +e + bee ** + tee NOKIAFinal Strategic Decisions Acquisitions: Proceeding to acquisitions may create problems because of the adaptation of new companies in the culture of Nokia, Furthermore, the fact that the candidate company could be bought from a Nokia’s competitor is a threat. Insurance plan: Insurance plan is a great opportunity for Nokia’s future strategy. Insurance plan is a low risk strategy because it will start, at the same time, that the services are in growth. Insurance plan fits perfectly with the culture of European Continent and is very close to stakeholders’ philosophy (high-end technology and health services). NOKIAFinal Strategic DecisionsFinal Strategic DecisionsStrategy evaluation with SFA and SFA 6M rankings Insurance plan matches alternative strategy according to the SFA ranking system. Our team believes that the market is almost ready for insurance plan and this could be achieved with the support of stakeholders. More than ever, technology can predict serious diseases and this will help not only Nokia but the whole society. Investments, must be continuous, in the strategy of insurance plan. The last results of Q3 are moderate, and we believe that announcing an entrance to the Insurance sector, will attract more investors and help the stability and growth of Nokia’s share rate. NOKIAImplementation of Strategy NOKIAMcKinsey 7s Framework be shared valuesEssential Changes using 7s Framework (1) Preto: Peto mcr) Prey Strategy Transparency ara He : ‘Alignment + + + Spreading ae +H + Structure Delegation of power aH HH + Horizontal structure ” 4 4 Networking + + + ‘Systems Budget + pas 4 Information Systems + 4 + Business Analytics + +H + Security + +H “Essential Changes using 7s Framework (2) Pere etic) eee) Difficulties ets Statt Specialized executives + 4 + Motivation HH os +H ‘Skills Training + at + Weaknesses “ ae +H Synergies ae pee ne style Supportive Leadership He ae +H Develop leadership sills ” pee eae ‘Shared Values Consistency Ht Ht +H Customer Oriented + pees + ‘Aignment with strategy cas ae +HHuman-Oriented alternative approach (Ghoshal)Implementing new strategy: Parties involved eolagParties involved Top Management The role of top management is crucial to the strategic change. It is very important to create a “Guidance Team”, which will be responsible to inspire and guide personnel throughout the change processes. Vendors Vendor selection has to be very careful, and the expertise and culture of the vendor has to be considered before conclude an agreement. It has to be clear that the vendor will act as an advisor and not as an executive Mid-Senior Executives Middle managers are usually those who have the better understanding of the current culture of the organization and, in most cases, they can influence and inspire a large group of employees. Guidance Team “Guidance Team” will be the “cornerstone” of the change. They will be the link between top management and personnel of lower levels.Change Plan 7S change actions: Transfer a Project Manager from core Nokia’s business in order to accomplish the Insurance Plan project and disseminates the shared values. Hiring an extra Sales Manager and extra staff for the new Health Insurance department. Hiring executives from the Health Insurance sector to inform and educate the team will occupy the Health project. Req tes Sources: Plan cost: €10millions (hiring, educated, new department cost) Funding: Using available net cash NOKIAChange Plan Priorities: Select staff for the whole department. Create a business plan for the Health Insurance plan Be in touch with Insurance companies The acquisitions’ team have to continue its work, acquiring companies with high potential Implementation: Top management involvement and monitoring the progress of Project Managers. Create a new trend inside the company and motivate innovation around Health Insurance Plan, using human oriented leadership style. The new department will be structured with staff which is engaged with Insurance Plan and will help the creation of the business plan The group does not need to hurry, so all operations must be done in a structured way. NOKIATurnover difficulty to time Diticuity level Time NeodedReferences Hub pages, business and employment, business management and leadership 2012 www.hubpages.com Ukessays, Analysis of mobile phone manufacturer NOKIA 2016 www.ukessays.com/essays/marketing ‘Academic sample papers, Analysis of NOKIA 2015 www.bestessayservices.com Slideshare http://www. : HERES net/ 1 cost leadership strategy https://wwww.translatum.gr «OL tpeIc yeviés otpamyuKécy http://www, bluewavemag.com/ Aapdpdwon otparnyiKrig — Strategy Train http://st.merig.eu/ The rise, dominance, and epic fall - a brief look at Nokia's history http://www.gsmarena.com/ Statista — The portal for statistics https://www.statista.com/ “How Did Nokia’s Networks Business Perform?” - http://marketrealist.com Profits plummet at Nokia Networks - http://telecoms.com/ NOKIA