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Sales and Services Nokia Suzhou tele Manufa cturing Sales and Services ? GSM system and equipment ? Mobile handsets ? Mobile handsets ? GSM 900/1800 work services ? Mobile switches ? Wireless applications, solutions and services ? Digital multimedia terminals ? GSM base station ? Cellular work transmission products SAMSUNG010605BJkickoff2 26 FINANCIAL PERFORMANCE 1. Background information ? Location ? Registered capital ? Management team ? Equity structure ? Starting year ? Number of employees ? Era analysis 4. Value chain strategy 5. Organization and ownership 6. Financial performance ? Focus on – Marketing, advertising and promotion – Distribution (channel and sales force) ? Organization structure ? Ownership structure ? Sales ? Profit 2. Strategy 3. Product/market ? Mission ? Vision ? Corporate strategy ? Market position ? Key product offerings ? Key customers ? Value proposition ? Geographic focus ? Pricing SAMSUNG010605BJkickoff2 27 ?Nokia?s sales in China grew 31% and its operating profit grew 26% in 2000, among which, mobile handsets contributed to 59% of the sales and 70% of the profit. ?Mobile handset plays an increasingly important role in Nokia?s product portfolio, as it represents 59% of the sales in 2000 from 54% in 1999. ? Nokia has secured an operating margin of 22% in mobile handsets, the highest margin in the mobile handset industry in China, due to highly efficient operations that keep the cost down to minimum, even though intensive petition has driven the operating margin down from 24% in 1999. KEY MESSAGES FINANCIAL PERFORMANCE SAMSUNG010605BJkickoff2 28 NOKIA SEES 30% GROWTH IN SALES AND OPERATING PROFIT WHERE MOBILE HANDSETS CONTRIBUTE MORE THAN 50% Revenues in China Operating profit in China 1 , 1 1 41 , 5 9 72,052 2,697 2000 Mobile handsets USD millions 262356406 512 1999 2000 31% 26% 1999 Mobile handsets Source: Nokia Press Release, IDC, McKinsey Analysis 。s ORGANIZATION IS MAINLY PRODUCT FOCUSED WITH A NARROW PRODUCT PORTFOLIO AND COORDINATED SALES AND MARKETING Nokia international Nokia Beijing mobile munication Nokia Dongguan mobile phone Nokia Fujian mobile munication technology Nokia Beijing Hangxing tele Nokia Dongda tele technology Nokia Zhongxin digital technology Nokia Chongqin tele Marketing Nokia China office Nokia China office Sales Service Manufa cturing Sales and Services Manu facturing Ramp。s FASHION PHONES PERFORM BETTER IN SOUTH CHINA AND LARGE CITIES North region East region South region China average Beijing Shanghai Shenzhen Guangzhou 45755788Market share Percent, 2000 Source: McKinsey Analysis SAMSUNG010605BJkickoff2 15 31 30 302429 302810 9 911107 772125 243028Tier 1 Tier 2 Tier 3 Tier 4 Nokia Motorola Others NOKIA IS RELATIVELY WEAK IN THE IMPORTANT 4TH TIER CITY MARKET Percent market share, 2000 Ericsson Siemens 18% 19% 23% 40% Tier size as % of total 100%= Million units Source: McKinsey Analysis SAMSUNG010605BJkickoff2 16 0%5%10%15%20%25%30%35%40%Source: Retail Audit, McKinsey analysis AND THIS WEAKNESS IN 4TH TIER CITIES SPANS MOST PROVINCES Percent market share, Nokia Market share Percent Province Tier 1/2/3 city Tier 4 city SAMSUNG010605BJkickoff2 17 VALUE CHAIN STRATEGY 1. Background information ? Location ? Registered capital ? Management team ? Equity structure ? Starting year ? Number of employees ? Era analysis 4. Value chain strategy 5. Organization and ownership 6. Financial performance ? Focus on – Marketing, advertising and promotion – Distribution (channel and sales force) ? Organization structure ? Ownership structure ? Sales ? Profit 2. Strategy 3. Product/market ? Mission ? Vision ? Corporate strategy ? Market position ? Key product offerings ? Key customers ? Value proposition ? Geographic focus ? Pricing SAMSUNG010605BJkickoff2 18 ? N