convergence strategy: il caso nokia
DESCRIPTION
L’ing. Carzaniga presenta la Convergence Strategy adottata dalla Nokia.TRANSCRIPT
Nokia Convergence Strategy
MUMM Conference Day 2007Rome, 9th May
Background scenario
• Lower Global Average Selling Price => lower Margins
• Mature Markets (Europe and North America): one digit growth => tough competition for Brand switchover and investments for loyalty
• High Subsidy by Telecom Operators => tough negotiations and strong consumers’ attitude to lower prices
• Booming Markets (China, India and Latin America) but low range products => low Margins
• Faster commercial product lifecycle => high Investments in R&D
• Mix of financial investments coming from Multi-Businesses Companies
• Quite strong Convergence demand coming from Mobile and Fixed Operators
Actual Business Models are still effective to have two digits Operating Margin in MP Industry?
No! New Value Added Businesses are necessary
Convergence is the main driver to enter in new Businesses
Convergence is not a pure sum of two different needs/industries
Convergence is something more:
new Categories, new Businesses, new Experiences, new Benefits, new Markets
• Digital Contents
• High capacity Memories, fast Processors, longlasting batteries
• Stable and fast Operating System for Mobile Phones
• Wider Transmission Band (GPRS, UMTS, HSPA, …)
Technology
Consumers
Legislation
Competition
•“everything, everytime, everywhere”
•Needs of customization (ring tones, wallpapers, UI, cover, etc..):
• Everybody has a MP
• Deregulation
• Liberalization
• Margin erosion
• Tough Negotiations
Dri
vers
for
Converg
en
ceWhat’s Convergence
Nokia Convergence Strategy: General Approach
Networks
Experiences
Tech
nolo
gy
Mobile
Business
Wi-Fi/Wi-Max
Push e-mail
VoIP
UMA
Multimedia
MPix
MPEG4
MP3
Carl Zeiss
High Touch
Design
New Material
Form Factor
Sport
New Material
SW Features
Convergence Strategy: New Requisites
• Complementary Strategy => Experience completion:
• High End User Price
• Not compelling Features
• Not recognized Brand in the new Business
• Frontal Attack Strategy => Product substitution
Strategies
Competition
Partnerships
Acquisitions
• Competitor now Partner: Siemens
• New Competitors: Apple, Sony PSP, Nintendo, Nikon, etc…
• Co-Opetitors: Microsoft, Canon, HP, BleckBerry, Tom Tom, Yahoo
• Fundamental to complete the new Business Value Proposition and to gain credibility:
• Carl Zeiss, Gaming Publishers, Epson, Kodak, Adobe, IBM, Oracle, JBL, Sennheiser, Bose, Top of the Pops, Tom Tom, Route 66, Skype, Flickr,Google
• Loudeye (OD2), Gate5, Intellisync .....and more to come
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What is our starting point?
Vision and MissionIn a world where everyone can be connected,
we take a very human approach
to
technology.
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Towards the four billion milestone
Source: Global brand tracking data ex Japan-Korea. Brand preference weighted by population.
#2 CompetitorNokia Others2004 2005 Q2’06
Global Brand Preference %
Brand Preference by Area
China
APAC
Latin America
N. America
MEA
Europe
39 43 45
Nokia wins consumers hearts and minds by 4:1 margin…
Italy
Source: Interbrand Corp, Business Week, July 2006
1.
2.
3.
4.
5.
7.
8.
9.
10.
Value Change 2005
vs. ’06-1%
-5%
+5%
+4%
-9%
+14%+12%
+5%
+6%
+9%
6.
… and is one of the most loved and fastest growing brands in the world.
Nokia:• Brand Number 6
• First European Brand
• First non-US Brand
• First Telco Brand
Why is this important?
Because great brands help grow gross margin…
ASP
Volume
MarketPressure
…while building long term brand equity.
?
…and while we are all the same …we have
different needs
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“I expect the new global consumer segmentation model to re-install our reputation as having the best consumer understanding in the industry”
Olli-Pekka Kallasvuo – August 2005
Nokia’s Consumer Segmentation is of key strategic importance
Global segmentation• Continuously refreshable research
• 10 billion data points
• 77,000 Consumers x 1.5 hour interview
• 21 countries
• 122 questions
• Understanding of: Values, Beliefs, Attitudes, Lifestyle
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Nokia Consumer Segmentation: a two dimensional space - the Axis
Rational Aspirational
High Involvement
Low Involvement
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Vertical Axis – based on behavior High
Involvement
Low Involvement
How do consumers actually behave?
• Replace phone every 6 months• Tend to pay higher price for mobile• Tend to buy from well known brands• More design driven purchasing behavior
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Horizontal Axis – based on attitude
Rational Aspirational
What do consumers want ?
I use my Mobile Phone as a fashion accessory
I would prefer a mobile phone that is great looking rather than having the latest features
I would be willing to own different Mobile Phone in different situations
I am embarrassed if my Mobile Phone looks outdated
I would like to keep up to date with the latest fashion trends
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Key Attitudes: the quadrants
Rational Aspirational
High Involvement
Low Involvement
Mobile Phone as empowerment tool
Mobile Phone trend leaders
Mobile Phone trend followers
Mobile Phone only when necessary
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Italian Segmentation Model
Young Explorers (10.3%)
Technology Stylists (5.2%)
Style Leaders (5.3%)
Style Followers (6.3%)Family Providers (12.5%)
Life Jugglers (6.3%)
Pragmatic Leaders (3.4%)
Life Builders (8.9%)
Image Seekers (0.0%)
HIGHERINVOLVEMEN
T
Simplicity Seekers (34.3%)
Mature Acceptors (5.6%)
Technology Leaders (3.4%)
LOWERINVOLVEMEN
T
RATIONAL ASPIRATIONAL
(non-existent in Europe)
Key consumer need around modernity the latest and best– technology is a key driver.
Key consumer need around style / fashion. Design conscious consumers. Require well designed stylish products
More mainstream segments, but tend to be younger in demographics. Slower technology adoptionMore rational
attitudes. Key consumer need is the device as a tool for empowerment
Less involved with mobile telephony and consumer need is around a basic communication device
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Global Segment SizesItaly
Wave 1
Italy
Wave 2
Young Explorers (7.9%) 6.9%10.3
%
Technology Leaders (6.1%)
3.6% 3.4%
Technology Stylists (6.4%)
1.1% 5.2%
Style Leaders (10.6%) 4.5% 5.3%
Image Seekers (7.2%) NE NE
Style Followers (6.3%) 6.7% 4.8%
Family Providers (10.3%)
21.6%
12.5%
Simplicity Seekers (13%)
28.1%
34.3%
Mature Acceptors (7.6%)
1.9% 5.6%
Life Jugglers (3.8%) 7.1% 6.3%
Pragmatic Leaders (7.1%)
6% 3.4%
Life Builders (13.9%)12.4
%8.9%
Italy Re-Fresh Segmentation Map
Young Explorers
Technology Leaders
Technology Stylists
Style Leaders
Style FollowersFamily ProvidersSimplicity Seekers
Mature Acceptors
Life Jugglers
Pragmatic Leaders
Life Builders
Image Seekers
SI = Statistically Insignificant NE = Non Existent
Globally, 11.1% of market has moved
onto or above horizontal involvement axis (= most segments
above axis have grown)
Four categories to help people navigate
Young Explorers (7.9%)
Technology Stylists (6.4%)
Style Leaders (10.6%)
Style Followers (6.3%)Family Providers (10.3%)
Life Jugglers (3.8%)
Pragmatic Leaders (7.1%)
Life Builders (13.9%)
Image Seekers (7.2%)
Simplicity Seekers (13%)
Mature Acceptors (7.6%)
Technology Leaders (6.1%)
RATIONAL
ASPIRATIONAL
Smart and collaborative business solutions
AchieveNokia Eseries
Achieving together
LiveDesign and style leadership
Inspiring the sensesConnec
t Essence of Nokia through balance of style and proven benefits
Connecting simply
Innovation and technology leadership
ExploreNokia Nseries
Sharing discoveries
Improve marketing yield
Sharing DiscoveriesAchieving Together
Connecting Simply
Nokia connects people through very human technology to help them feel
close
We believe life is better
when shared
We believe everyone
achieves more when
working together
We believe experiences are more valuable
when shared
WHATWe
Believe
WHATWe
Promise
…expressed through Nokia Connecting People
EXPLORE
Connect
ACHIEVECONNECTLIVE
We believe people need
inspiration to bond even deeper
Inspiring Senses
…expressed through Nokia Connecting People
1 Nokia brand4 Categories2 Sub-brands
With distinct tonalities, not multiple personalities.
What this means for us•Sustainable industry leadership
•Optimal product portfolio offering per category
•Improved marketing yeald
by in-depth understanding of consumer needs per segment
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Thank you