1、SAMSUNG010605BJ-kickoff2CONFIDENTIALMobile Handset Competitor Analysis:NokiaSAMSUNG ELECTRONICS CHINA(SEC China)August 20,2001This 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 prior writ
2、ten approval from McKinsey&Company.This material was used by McKinsey&Company during an oral presentation;it is not a complete record of the discussion.SAMSUNG010605BJ-kickoff21OVERVIEW OF COMPETITOR ANALYSIS FRAMEWORK1.Background informationLocationRegistered capitalManagementteamEquitystructureSta
3、rting yearNumber of employeesEra analysis4.Value chain strategy5.Organization and ownership6.Financial performanceFocus onMarketing,advertising and promotionDistribution(channel and sales force)Organization structureOwnership structureSales Profit 2.Strategy 3.Product/market MissionVisionCorporate s
4、trategyMarket positionKey product offeringsKey customersValue propositionGeographic focusPricingSAMSUNG010605BJ-kickoff22KEY ISSUES TO PROBE-NOKIAStrategyProduct/marketValue chainstrategyOrganization&ownershipFinancialperformanceHow does Nokia position itself now and in 2005?What are Nokias product
5、and value delivery 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
6、 geographic 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 WOFE
7、s in 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-kickoff23BACKGROUND INFORMATION1.Background informationLocationRegistere
8、d capitalManagementteamEquitystructureStarting yearNumber of employeesEra analysis4.Value chain strategy5.Organization and ownership6.Financial performanceFocus on Marketing,advertising and promotion Distribution(channel and sales force)Organization structureOwnership structureSales Profit 2.Strateg
9、y 3.Product/market MissionVisionCorporate strategyMarket positionKey product offeringsKey customersValue propositionGeographic focusPricingSAMSUNG010605BJ-kickoff24NOKIA IS RELATIVELY A LATE-COMER TO CHINA;HOWEVERIT HAS GROWN RAPIDLY TO BECOME A MARKET LEADER IN MOBILE COMMUNICATIONBackgroundImplica
10、tionLocationBased at Finland,with offices in China,e.g.BeijingChina is Nokias strategic location because it is Nokias second largest market,second only to USInvestmentInvested more than USD1.7 billion in China BusinessTwo main business units:Nokia network and Nokia mobileStartingFirst office in Chin
11、a in 1985,first JV in China in 1994Employees60,000 staff in 130 countriesMore than 20 offices in China,7 JVs,1 WOFE and 1 R&D center with over 5500 staffHistoryStarted business in China since 1950s1985 saw first office in Beijing,supplying fixed line networksSupplied analog NMT 450 system and termin
12、al in 1986Supplied transmission system,optical cable and electric cables in later 1980sSupplied analog ETACS system and terminals in 1989Supplied GSM system and terminals in 1990sLeader in mobile communication globally and in ChinaAl though a relatively later-comer to China,has invested heavily in i
13、ts Chinese businessFocused product lines with Nokia network offering mobile,broadband and IP network infra-structure,and Nokia mobile offering mobile handsetsSource:Nokia Press ReleaseSAMSUNG010605BJ-kickoff25STRATEGY1.Background informationLocationRegistered capitalManagementteamEquitystructureStar
14、ting yearNumber of employeesEra analysis4.Value chain strategy5.Organization and ownership6.Financial performanceFocus on Marketing,advertising and promotion Distribution(channel and sales force)Organization structureOwnership structureSales Profit 2.Strategy 3.Product/marketMissionVisionCorporate s
15、trategyMarket positionKey product offeringsKey customersValue propositionGeographic focusPricingSAMSUNG010605BJ-kickoff26NOKIA POSITIONS ITSELF AS A LEADING PRODUCT AND SYSTEM SUPPLIER IN THE FAST GROWING MOBILE COMMUNICATION INDUSTRYVisionTo lead mobile communication through the integration of mobi
16、litywith internet and the innovation of new service modelsProductValue delivery systemStrategyFocuses on mobile communication products and aims to be a total solution provider in mobile communicationRegularly introduces consumer-oriented products with emphasis on designs and functionsBuilds strong l
17、ocal alliance through JVs with Chinese partners and R&D centers with Chinese universitiesBuilds exclusive specialist shops to bring one-step solutions to end usersBuilds fixed and mobile service stations with wide geographic coverage including rural areasSource:Nokia press ReleaseSAMSUNG010605BJ-kic
18、koff27NOKIA HAS CAUGHT UP WITH MOTOROLA AS MARKET LEADERS IN MOBILE HANDSETS SINCE 1999Monthly market share development(Percent of market in units sold)9899Jan 00Dec 00010203040NokiaMotorolaSiemens EricssonSource:IDC,McKinsey AnalysisSAMSUNG010605BJ-kickoff28UNLIKE ITS COMPETITORS,NOKIAS MARKET SHAR
19、E IS THE SAME AMONGST NEW AND REPURCHASE BUYERS313131282929101212877232121OthersNokiaEricssonSiemensMotorolaRepurchase BuyersNew BuyersTotal marketPercent of units sold,2000 4Q25%75%of Market100%Definition:New buyer:never bought mobile phone beforeRepurchase buyer:bought mobile phone before Source:I
20、DC,McKinsey analysisSAMSUNG010605BJ-kickoff29AMONG REPURCHASERS,NOKIAS CHURN RATE IS HIGH,BUT AT PAR WITH MOTOROLA Percent,2000 10633241566EricssonNokiaAlcatelOthersSiemensBrand bought by previous Nokia owners MotorolaSamsung11326326319MotorolaAlcatelOthersSiemensBrand bought by previous Motorola ow
21、ners NokiaSamsungEricssonSource:McKinsey analysisSAMSUNG010605BJ-kickoff210PRODUCT/MARKET1.Background informationLocationRegistered capitalManagementteamEquitystructureStarting yearNumber of employeesEra analysis4.Value chain strategy5.Organization and ownership 6.Financial performanceFocus on Marke
22、ting,advertising and promotion Distribution(channel and sales force)Organization structureOwnership structureSales Profit 2.Strategy 3.Product/marketMissionVisionCorporate strategyMarket positionKey product offeringsKey customersValue propositionGeographic focusPricingSAMSUNG010605BJ-kickoff211Nokia
23、 has a narrow product portfolio focusing on mobile communication 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 fashionableNok
24、ias fashion phones are relatively strong in major cities and the south region;however Nokia is relatively weak in the fourth-tier citiesKEY MESSAGES-PRODUCT/MARKETSAMSUNG010605BJ-kickoff212MOBILE HANDSET IS NOKIAs BIGGEST PRODUCT OFFERING AND ITS ESSENTIAL PART OF TOTAL SOLUTIONS IN MOBILE COMMUNICA
25、TIONNokia mobile handsetsNokia product offeringsNokia networkProductsNow and futureNokia 3310 for young peopleNokia 8210 for fashion chaserNokia 6210 WAP for business professionalNokia 7110 WAP with full Chinese interfaceNokia 9210 as personnel communicatorNokia 8310,6310 for GPRS and WAPMobile netw
26、orkBroadband networkIP networkLargest mobile handset supplier in the world with above average growth in sales and more than 30%global market shareViews mobile handset as a digital convergence point for multimedia servicesSupports blue tooth between mobile handset and PC in Nokia 6310 for mobile prof
27、essionalDevelop WCDMA handsets with DoCoMoDevelops homenet products such as multimedia terminals in Nokia ZhongxinProvides multimedia service network solutions for operators and ISP entering the mobile communication fieldsNokia network covers many cities and areas in China including Beijing,Shanghai
28、,Hong Kong and Taiwan etc.Aims to be a total solution provider for mobile communicationSAMSUNG010605BJ-kickoff213NOKIA EMPHASIZES ON CONSUMER-ORIENTED DESIGNS AND FUNCTIONSFashion BusinessBasicFunChangeable cover Sub-100gVoice-dialRecordingVibrationTri-bandWAPBuilt-in modemIR-portChinese inputLi-Ion
29、 batterySMS messagingGamesComposable/downloadable ringer tone82106210P7689L2000V998+L2000WWWFashionClassicPrice in China(RMB)26522878236918001435*1452Equivalent features,Nokia more fun/fashion vs.Motorola more functionsMotorola offers lower price models with similar features,tri-band and WAP*Nov.200
30、0 priceKey DifferencesSAMSUNG010605BJ-kickoff214WITHIN CHINA,NOKIAs FASHION PHONES PERFORM BETTER IN SOUTH CHINA AND LARGE CITIESNorth region East region South regionChina averageBeijingShanghaiShenzhenGuangzhou45755788Market sharePercent,2000 Source:McKinsey AnalysisSAMSUNG010605BJ-kickoff215313030
31、24293028109911107772125243028Tier 1Tier 2Tier 3Tier 4NokiaMotorolaOthersNOKIA IS RELATIVELY WEAK IN THE IMPORTANT 4TH TIER CITY MARKETPercent market share,2000EricssonSiemens18%19%23%40%Tier size as%of total100%=Million units 6.77.08.514.8Source:McKinsey AnalysisSAMSUNG010605BJ-kickoff2160%5%10%15%2
32、0%25%30%35%40%Source:Retail Audit,McKinsey analysisAND THIS WEAKNESS IN 4TH TIER CITIES SPANS MOST PROVINCES Inner MongoliaHunanYunnanAnhuiGuangdongFujianZhejiangHeijongjiangJilinHenanJiangxiHebeiShanxiLiaoningSichuanShandongJiangsuShanxiHubeiGansuGuizhouPercent market share,NokiaMarket sharePercent
33、ProvinceTier 1/2/3 cityTier 4 citySAMSUNG010605BJ-kickoff217VALUE CHAIN STRATEGY1.Background informationLocationRegistered capitalManagementteamEquitystructureStarting yearNumber of employeesEra analysis4.Value chain strategy5.Organization and ownership 6.Financial performanceFocus on Marketing,adve
34、rtising and promotion Distribution(channel and sales force)Organization structureOwnership structureSales Profit 2.Strategy 3.Product/market MissionVisionCorporate strategyMarket positionKey product offeringsKey customersValue propositionGeographic focusPricingSAMSUNG010605BJ-kickoff218Nokia is not
35、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 Telecommunication Equipment Factory,Bright Point,Express Fortune,and Tech
36、 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,Nokia also develops exclusive specialist shops in order to provide“one-ste
37、p”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 serviceKEY MESSAGES-VALUE CHAIN STRATEGYSAMSUNG010605BJ-kickoff219NOKIA IS STRONG AT MARKETING,SALES AND SERV
38、ICE,BUT WEAK AT TECHNOLOGYManufac-turing and supply chainSales and distributionMarketing and branding R&DStrengthsLevers for improvementEstablished R&D center in 98/99 in Beijing for China market,with 150 research staffStrong in low end developmentGood product quality and designWeaker position in hi
39、gh end segment and high end technologyPosition in low end under attack Scalable local productionOptimized logisticsCountry-wide distribution channels and strong channel management High retailers preferenceLower rating of retail support Retailer preference not translating into higher market shareStro
40、ng brand awareness and preferencePromotes“technology based on people”Awareness and preference lower than MotorolaBrand in young market under attack Low technology image ServiceHighly efficient customer service system with 250 service stations and mobile service stations for rural areas Good pre-and
41、after sales service,e.g.“one hour repair”serviceSAMSUNG010605BJ-kickoff220.on Nokiaon MotorolaNOKIA HAS REPUTATION GAP AS TECHNOLOGY LEADER,AND TARGET DIFFERENT CUSTOMER SEGMENTS FROM MOTOROLANokia hasgood productdesignsNokia phonesare for female oryounger peopleNokia is second toupgrade productsMot
42、orola productsare more formalMotorola alwaysintroduces newtechnology to themarket firstLoyal useris white-collarworker.on technology leadership and innovation.on design on typical loyal usersSAMSUNG010605BJ-kickoff221NOKIA DISTRIBUTES THROUGH SIX FIRST-TIER RESELLERS AND DEVELOPS EXCLUSIVE SPECIALIS
43、T SHOPSNokia Channel StructureLate entry to the China market with less historic overheadFlat distribution channelsDevelops exclusive specialist shopsProvides after-sale servicesSource:China Computer JournalVendor1st-tier resellersConsumers2nd-tier resellersRetailers/retail chain stores6%3%91%22%33%3
44、6%6%33%58%RationalesNokia employs PTAC,CellStar,Beijing Telecommunication Equipment Factory,Bright Point,Express Fortune,and Tech Glory as its 6 first-tier resellersNokia requires resellers to report the promotion plan and product ordering plans a quarter in advance,and since the demand for handsets
45、 tends to fluctuate across promotional programs,this inflexible strategy generally limits the potential gain when market demand changes across promotionsClose to 900 retail shops and counters country-wide,with 50%growth from 1999Form exclusive specialist shop to provide one-step solution to end user
46、s SAMSUNG010605BJ-kickoff222ORGANIZATION AND OWNERSHIP1.Background informationLocationRegistered capitalManagementteamEquitystructureStarting yearNumber of employeesEra analysis4.Value chain strategy5.Organization and ownership6.Financial performanceFocus on Marketing,advertising and promotion Distr
47、ibution(channel and sales force)Organization structureOwnership structureSales Profit 2.Strategy 3.Product/marketMissionVisionCorporate strategyMarket positionKey product offeringsKey customersValue propositionGeographic focusPricingSAMSUNG010605BJ-kickoff223Nokia has 7JV and 1 WOFE in China,among w
48、hich 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 setup JVs and WOFEs in China include building local alliances,localizing manufacturing to meet domestic market demand and inc
49、rease exports,and technology transfer encouraged by the Chinese governmentWith a narrow product portfolio,Nokias organization is product focused with coordinated sales and marketing effort across JVs that manufacture the same productsKEY MESSAGES-ORGANIZATION AND OWNERSHIPSAMSUNG010605BJ-kickoff224N
50、OKIA HAS 7 JVs AND 1 WOFE IN CHINA,AMONG WHICH 2 JVs ARE DEVOTED TO MOBILE HANDSETSMain driversBuilds successful alliance with Chinese partnersLocalizes manu-facturing for major productsMeets domestic market demandand increases exportsRealizes technology and skill transfer in development,manufacturi
