Nokia

NOKIA CEO’S DILEMMA

Hitesh Malhotra

NOKIA LOSING MARKET SHARE Nokia plans to build a new global mobile ecosystem; Windows Phone would

serve as Nokia's platform. Nokia stock was down 4.1 percent at 6.715 euros by 1429 GMT on a flurry of

analyst downgrades Nokia estimated market share shrunk to 31 percent in the fourth quarter of last

year Nokia has a long product development cycle. Nokia has renewed an approach to capture volume and value growth to

connect “the next billion” to the Internet in developing growth markets Nokia has focused investments in next-generation disruptive technologies;

Meego and Nokia Research Center Nokia has a new leadership team and organizational structure with a clear

focus on speed, results and accountability

Focused competitors taking market share with: -An entire ecosystem -Several price ranges -Production/Innovation The new version of Windows Phone OS is still under construction. Microsoft’s share of the U.S. smartphone platform market dipped 1.7 percent

between October 2010 and January 2011, from 9.7 percent to 8.0 percent

Situation

Complication

Key Issue

Can Nokia keep its leading position in the market?

Issues Analysis

1

1.1

1.2 2.1

2.2

3.1

3.2

Can Nokia keep its leading position in the market?

Will Nokia benefit from partnership with

Microsoft?

Can Nokia’s Windows Phone

dominate the smart phone market?

Can Nokia’s partnership

with Microsoft increase

revenue and market share?

Will Microsoft help Nokia

regain trust in its investors?

Is outsourcing operating system

cheaper than developing in-

house

Is Windows Phone going to create an

ecosystem (as its rivals)?

Can Nokia benefit from reorganizing

its corporate structure?

Could Nokia apply the new

structure successfully?

Can the Windows platform

compete with the already established

OS?

1.2 2.1 3.1

2 3

Work Plan

LENGTH OF THE PROJECTNumber Activities Assigne

d To 1 2 3 4 5 6

1 Market Research Takuya

2 Conduct a research for the stock trend Clara

3 Research on investors evaluation Teodora

4 Analysis of the current growth Prat

5Research on Nokia’s

strategy with their R&D decision

Prat

6Research on Nokia’s

strategy with Symbian OS phone

John

7 Research on Windows Phone app market Takuya

8Research on Windows Phone market share in comparison

with other OSTeodora

9 Competitive Analysis Prat

10 Financial Statement Analysis Clara

Issues Analysis

Nokia can regain its leading position in the market

1.Nokia will benefit from the partnership with Microsoft.

2.Nokia will benefit from reorganizing its corporate structure.

3.Nokia’s WP7 can dominate the smart phone market.

Issues Analysis

1. Nokia will benefit from its partnership with Microsoft

1.1 Nokia’s partnership with Microsoft will increase revenue and market share1.2 Microsoft will help Nokia regain trust in its investors

1. Nokia will benefit from the partnership with Microsoft

1.1 Nokia’s partnership with Microsoft will increase revenue and market share

1.2 Microsoft will help Nokia regain trust in its investors

1. Nokia will benefit from the partnership with Microsoft

2. Can Nokia benefit from reorganizing its corporate structure

2.1 Outsourcing operating system is cheaper than developing in-house.

2.2 Nokia can apply the new structure successfully

2. Can Nokia benefit from reorganizing its corporate structure?2.1 Outsourcing operating system is cheaper than developing in-house

2. Can Nokia benefit from reorganizing its corporate structure?2.1 Outsourcing operating system is cheaper than developing in-house

Cost of acquiring WP7 for one handset= $6.99

Cost for converting 461 million = $6.99X 461 = $3.2 billion which is less than Nokia’s R&D expenditure of $3.9 Billion in 2010

2. Nokia can benefit from reorganizing its corporate structure2.2 Nokia can apply the new structure successfully

Its cheaper to execute outsourcing than to develop

Existing Symbian users are looking for WP7 features

Nokia can capture additional market share of WP7 users.

3. Nokia’s WP7 will dominate the smart phone market

3.1 Windows Phone is going to create an ecosystem (as its rivals)3.2 The Windows platform can compete with the already established OS

3.1 WP7 is going to create an ecosystem (as its rivals)

3. Nokia’s WP7 can dominate the smart phone market

Can the Windows platform compete with the already established OS

3.1 WP7 is going to create an ecosystem (as its rivals)


3.2 The Windows platform can compete with the already established OS


Summary

Nokia can regain its leading position in the market

1.Nokia will benefit from the partnership with Microsoft.

2.Nokia will benefit from reorganizing its corporate structure.

3.Nokia’s WP7 can dominate the smart phone market.

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Nokia