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D center in 98/99 in Beijing for China market, with 150 research staff ? Strong in low end development ? Good product quality and design ? Weaker position in high end segment and high end technology ? Position in low end under attack ? Scalable local production ? Optimized logistics ? Countrywide distribution channels and strong channel management ? High retailers preference ? Lower rating of retail support ? Retailer preference not translating into higher market share ? Strong brand awareness and preference ? Promotes “technology based on people” ? Awareness and preference lower than Motorola ? Brand in young market under attack ? Low technology image Service ? Highly efficient customer service system with 250 service stations and mobile service stations for rural areas ? Good pre and after sales service, . “one hour repair” service SAMSUNG010605BJkickoff2 20 ….on Nokia ……on Motorola NOKIA HAS REPUTATION GAP AS TECHNOLOGY LEADER, AND TARGET DIFFERENT CUSTOMER SEGMENTS FROM MOTOROLA Nokia has good product designs Nokia phones are for female or younger people Nokia is second to upgrade products Motorola products are more formal Motorola always introduces new technology to the market first Loyal user is whitecollar worker ….on technology leadership and innovation ….on design … on typical loyal users SAMSUNG010605BJkickoff2 21 NOKIA DISTRIBUTES THROUGH SIX FIRSTTIER RESELLERS AND DEVELOPS EXCLUSIVE SPECIALIST SHOPS Nokia Channel Structure ? Late entry to the China market with less historic overhead ? Flat distribution channels ? Develops exclusive specialist shops ? Provides aftersale services Source: China Computer Journal Vendor 1sttier resellers Consumers 2ndtier resellers Retailers/retail chain stores 6% 3% 91% 22% 33% 36% 6% 33% 58% Rationales ? Nokia employs PTAC, CellStar, Beijing Telemunication Equipment Factory, Bright Point, Express Fortune, and Tech Glory as its 6 firsttier resellers ? Nokia requires resellers to report the promotion plan and product ordering plans a quarter in advance, and since the demand for handsets tends to fluctuate across promotional programs, this inflexible strategy generally limits the potential gain when market demand changes across promotions ? Close to 900 retail shops and counters countrywide, with 50% growth from 1999 ? Form exclusive specialist shop to provide onestep solution to end users SAMSUNG010605BJkickoff2 22 ORGANIZATION AND OWNERSHIP 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 23 ? Nokia has 7JV and 1 WOFE in China, among which 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 increase exports, and technology transfer encouraged by the Chinese government ?With a narrow product portfolio, Nokia?s organization is product focused with coordinated sales and marketing effort across JVs that manufacture the same products KEY MESSAGES ORGANIZATION AND OWNERSHIP SAMSUNG010605BJkickoff2 24 NOKIA HAS 7 JVs AND 1 WOFE IN CHINA, AMONG WHICH 2 JVs ARE DEVOTED TO MOBILE HANDSETS Main drivers ? Builds successful alliance with Chinese partners ? Localizes manu fa