#ИМЯ?

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• -competing in the third vawe business insights

Outi Sutinen, Senior lecturer University of
Applied Sciences, Department of Business
and Information management
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Visiting lecturer

• Name Outi Sutinen
• Education
• MBA, Vaasa University, Finland International
  Business
• Professional Career
• Senior lecturer at Oulu University of Applied
  Sciences, department of International Business
• Marketing director, Baltic States, LOrèal
• Marketing director and Exports Area Manager,
  sales person in various food stuff organizations
  in Finland and France
• Head of Oulu Export association

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Presentation structure

• Introduction
• Case Nokia company presentation
• Market dynamics and Research development
• The Nokia approach
• Future challenges

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Introduction

• Where do I come from?

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Oulu a Nokia town
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How Nokia and Oulu are connected?

• Why Nokia came just from Finland?
• teleoperator market was not concentrated to only
  1 national company like in many other European
  countries gt more competitiongt more innovation
• Oulu University department of engineering played
  a central role in the developement of Nokia
  technology

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• The founding of Oulu University in 1958
• is regarded as the preparation for the Oulu
  high tech industrial clusters formation, and the
  establishment of universitys Department of
  Electronical Engineers in 1965 as the starting
  point (1975 orientated in electronics, mobile
  telecommunications and IT personal interests of
  former professors Juhani Oksman and Matti Otala)

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• 1973 Nokia radio producing company started in
  Oulu
• 1974 VTT National Technical Research Centre of
  Finland comes to Oulu
• Foundation of an electric laboratory
• innovation environment further improved
• Today Oulu is important production and RD center
  for Nokia and Nokia as a anchor company has
  attracted a variety of other companies which
  together make an important IT cluster in a global
  level (Oulu Technology Village)

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Oulu -the Finnish Phenomena

• A finnish center of high tech
• NOKIA
• TECHNOPOLIS SCIENCE PARK
• MULTIPOLIS-METROPOLIS NETWORK
• PROJECT
• STRONG NETWORKING BETWEEN COMPANIES, UNIVERSITY,
  POLYTECHNIC VTT

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(No Transcript)
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What do you know Nokia?

• Origins of Nokia?
• Procduct range
• Where the products of Nokia are made?

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Nokia in Brief

• How old is Nokia?Nokia's roots go back to 1865,
  when the Nokia wood-pulp mill was founded. In
  1967, upon the merger of three separate
  companies.
• Some important dates
• 1981 Nordic Nordic Telephone (NMT), the first
  international mobile phone network, is built
• 1991 GSM- a new mobile standard opens up
• Nokia equipment is used to make the worlds
  first GSM call

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Nokia in Brief

• Mobile revolution 1992-1999
• 1992 Jorma Ollila becomes CEO of Nokia
• (access to international finance markets)
• 1994 Worlds first satellite call made using a
  Nokia GSM handset
• 1998 Nokia becomes the leader in mobile phones

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Nokia in brief

• Nokia 2000-today
• 2002 First 3G phone, 6650
• 2003 Nokia launches N-Gage mobile multiplayer
  game
• 2005 The billionth Nokia phone-a Nokia 1100-is
  sold in Nigeria
• Today market leader (40 market share 4/4
  quarter 2007 Nokias market share exceeded the
  combined shares of its next three biggest
  competitors Samsung, Motorola and Sony Ericsson.
• (http//www.nytimes.com/2008/01/25/technology/25no
  kia.html)
• Is today worlds 5th most valued brand

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Nokia Mobile phones production
FINLAND
GB
GERMANY
HUNGARY
CHINA
ROMANIA
SOUTH-COREA
INDIA
MEXIQUE
BREZIL
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Nokia in Brief

• World largest manufacturer of mobile devices
• Head office in Finland
• Appr. 60 000 employees in 128 nationalities
• R D centers in 11 countries (31 of staff work
  in RD)
• Production facilities in 9 countries

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Nokia Today
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Market dynamics

• Which are the market trends in mobile markets?
• What are the critical succes factors in winning
  the business?

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Market trends

• 1. consumer taste divergence/fashion business
• From high tech to fashion business customer is
  the key
• Consumers look for experience - not just
  technology
• Fragmenting market segmentsgt more and more models

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Fashion and phones
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Market trends

• 2. Shortening life cycles
• Customers tastes wary quicky gt shorter product
  life cycles

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Shortening life cycles of mobile phones
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Product Life Cycles mobilephones
Typical life cycle 1-2 years
Development 1-2 years
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Product Process RD in the Innovation Life
cycle (based on M.L. Patterson, 93)

• Cash flow

Product is Released to production
(Mostly Product RD)
Positive Cash flow
Net Profit period
Opportunity occurs
Negative Cash flow
Break Even time
Project Becomes extinct
Time
Product Definition and Plans freeze
Project Activity begins
(mostly process RD)
Opportunity Is perceived
First customers are satisfied
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3. Globalisation

• Geographical and consumer diversity differences
  in consumer behaviour and taste
• Role of Asia growing, namely China and India,
• BRIC countries (Brasil, Russia, China and India
  getting stronger)
• Globalisation affects business
• China Phenomena gt companies go to cheap labour
  countries
• India Phenomena gt companies are no more just
  addressing costs but try to get best partners
  globally and see opportunities in networking
• ! 20 of worlds software outsoursed to India

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• Companies go where the market is
• New division China contributed more than
• 25 to global growth in 2007 (India 9)
• For example Exports and production
• Nokia sold in 2007 77.8 million cellphones in
  Asia, the Middle East and Africa in the quarter,
  nearly double the 42.3 million sold in Europe and
  North America. In China, Nokias fastest-growing
  high-volume market, it sold 20.2 million phones,
  an increase of 38.4 percent over a year earlier.

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4. Technolgy war- new technologies and constant
improvements

• Examples
• internet convergence
• Non - cellular wireless
• Usability-customer friendliness aspect in
  technology growing
• Compatibility of technologies
• New added performaces just the imagination as a
  limit (Nokia Free music, free navigationNokia
  acquired a USA based Navteq, an American maker of
  digital maps, and has joint-venture with Siemens
  in wireless networks
• competition today setting standards first
• (like, Microsoft , Intel.)

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Challenges that Nokia has to meet and the Nokia
Response

• Understand consumer needs and variety
• Response decentralized RD in 11 countries
• Be first in the market and set standards
• Response Nokia has a strong history in being
  innovator-firsting the markets
• For example 13.11.2006 worlds first commercial
  WCDMA900 data call on 900 MHz band- advantages
  2-4 times larger coverage area
• Wideband Code Division Multiple Access

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Product innovation N95

• Response new launches,
• New technologies
• Customer friendly
• N95
• Now attacking Us markets

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Nokia fostering Innovation- how?

• The vision of Nokia of Inclusive environment
• emphasis on cultural/individual differences
• diversity was seen as a key to success gt
  increased creativity, mirrored market place,
  improved attraction and retention of human
  resources
• 1997 Nokia Code of conduct was introduced to
  support inclusive environment
• commitment to equal opportunity openess
• The Nokia Way
• efforts to promote teamwork individual
  responsability

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Secrets of Nokias success
BOLD STRATEGIC INTENT - seizing the opportunities
INNOVATION THROUGHVALUE CHAIN
FLAT ORGANIZATION
ENTREPRENEURIAL SPIRIT
collective leadership
global R D networks
competition cooperation
CUSTOMER SATISFACTION
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Nokia New Values 2007 Worked Down to Top
worldwide in Nokia Way Cafés

• Achieving together
• Trust, cooperation, sharing, openness, networking
• Engaging you
• Listening, client, employee, partner, consumer,
  development
• Passion for Innovation
• Dream, passion, courage, future
• Very Human
• Close to humanity, respect, customer friendliness

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Nokia secret flat team organisations- working
with cross-functional teams

• Cross-functional Team Defined
• Cross-functional team is a group of employees
  from various functional areas of the organization
  research, engineering, marketing, finance.
  human resources, and operations, for example
  who are all focused on a specific objective and
  are responsible to work as a team to improve
  coordination and innovation across divisions and
  resolve mutual problems.

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Example from Nokia India Great place to work

• Nokia HR department closely tracks every
  employee's progress. Every September, Nokia
  employees across mobile phones, networks and two
  RD divisions set up teams comprising 6-8
  employees. Each of these cross-functional teams
  has employees from marketing, sales and
  logistics, who would already have submitted a
  performance rating of themselves, the company,
  the division and so on, on various parameters.
  The teams are told to formulate an action plan
  and improve on the parameters with the lowest
  scores. The HR department coordinates this
  exercise and reviews progress every quarter.

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Nokia working with cross-functional teams

• new product development projects are run by a
  cross-functional teams to ensure that all
  viewpoints are heard and given proper weight
  throughout the life of the project.
• The team is composed of people that represent the
  various functional areas important to the success
  of the product
• Nokia has strong networks with suppliers and
  research institutes, very often teams are
  multinational and operate mainly virtually

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• Nokia Spirit supporting cross-functional teams
• The Nokia culture is the same world over. Sanjay
  Bhasin, director (India strategy) who has spent
  two years in Finland and a year in London
  observes "Nokia is a melting pot of people,
  based on the egalitarian society that exists in
  Finland." Nokia also offers a lot of opportunity
  for its employees to work globally.
• Comment Finnish culture is about taking
  responsability, low control, having low power
  distance, high trust and growing in work
  large responsabilities- and equality-team leaders
  normally rotate in Nokia

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New Focus deeper in Internet where

• New business models
• Roles of actors are mixed
• Work societies and ways to work change
• (Nokia follows very closely people at workgt
  innovations)
• Need for agility, knowhow and speed grow

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• Globalisation China phenomena gt you have to
  focus on costs sometimes difficult decisions
• Nokia response production in 9 countries latest
  factory was opened in Chennai, India, move from
  Bochum (Germany) to Romania Jucu

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Nokia manufacturing strategy cost leader

• Plants in Brazil, China, Finland, India, Germany,
  Hungary, Mexico, the Republic of Korea and UK,
  new plant to be opened in Romania
• Flexible global manufacturing network
• Quick response logistics
• No inventories (moved to suppliers)
• Highly automatized production
• Focus on ITC systems and production platform
  flexibility
• Stong supplier relationships (eg. Perlos (phone
  cover manufacturer deliveres just on 4 hour
  notice) high trust

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Future Challenges

• Which kind of future challenches can you imagine
  Nokia will face?
• Which do you think are the worst competitors for
  Nokia along different criteria?
• Design
• Price
• Service offering
• Other, which
• What do you think will be happening in this
  market in the close future- which kind of new
  launches do you predict? And in Spain?

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Summary

• Nokia is working in a very dynamic market
• Attention to speed to the market gtRD
• Attention to customer needs and design
• Nokia excells both in low cost models as well as
  high end
• Attention to new technologies gt to set the
  standardsgt deeper to Internet and wireless
  innovations
• New partners (Siemens, )
• Attention to logistics optimation gt production
  costs and flexible manufacturing
• Attention to Asia and BRIC countries
• CLIENT is the key (Nokia has learned its
  lessons)
• In Nokia the inspiration and spirit of
  organization makes the difference achieving
  together!
• Muchas gracias!

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Sources and Recommended addresses

• http//www.nytimes.com/2008/01/25/technology/25nok
  ia.html) (market share)
• http//www.businessweek.com/magazine/content/07_32
  /b4045401.htm (brand value)
• www.virtualfinland.fi
• www.tekes.fi
• www.vtt.fi
• www.oulu.fi
• www.arvopaperi.fi/extra/esitykset/rahapaiva07/ko
  nnos_raoul.pdf
• http//www.growtalent.com/gptw/no8.htm