某咨询-NOKIA制胜美国市场报告(英文)

某咨询—NOKIA制胜美国市场报告(英文)FINGERPRINT–NOKIARationaleFocusedonhighgrowthcategories(e.g.,mobilephones,digital)AnticipatedshifttodigitaltechnologyintheU.S.beforecompetitorsanddirectedresourcestooptimizeopportunity;tailorsproductstotargetcustomers(e.g.,fashioncoversforyoungersegment)Somedifficultytoattractingtop-tierlocalseniormanagementduetoglassceiling(e.g.,allseniorleadershipinFinnish0;FinnishmanagersusedtomanageU.S.operationsSucceedsinattractingtopengineersbecauseofattractiveproductsLocalmanagershavelimitedautonomyandaccountabilityexistsattheunitlevel,butheadofficeretainsfinalinputDifficultytranslating“TheNokiaWay”toU.S.(“Theculturedoesn’thavethesamerichnessorvalueasitdoesinEurope”)Devotessufficientresourcestolocalorganizationtowininmarket(e.g.,providedresourcesforU.S.towininmobilephonesegment)Outsourcesnon-coretechnologies(e.g.,microprocessorsfromIntel,componentsformMotorola)andusesstandardcomponentstosaveonR&Dspendandreactfastertochangingtechnologiesthanitscompetitors;leveragespartnershipsformoreefficientR&D(e.g.,JVwithCisco,Geoworks,HP)N/ACreatesbroaddistributionreachthroughnumerous,innovativerelationshipswithretailersanddistributors(e.g.,Sears,AT&Twirelessservices,Tandy)Developsandlaunchesinnovativemarketingcaigns(e.g.,firsttotargetconsumersratherthanprofessionals)Successfullyalliesandacquirestogaincapabilities(e.g.,jointventurewithTandyfordistribution,acquisitionofMobiratoenterpromisingmobilephonearea)HighLowEncouragessharingofbestpracticesbuthasnotbeenverysuccessfulatdoingsotodate1NOKIAKeyfactsLargest1-3yearrevenuesgrowthofcompetitorsLargestmobilephonemanufacturerandsecondlargestproviderworldwide(behindEricsson)ProductsMobilephonesGSM/DSCnetworksCompetitorsEricssonMotorolaTimeline18651990sDevelopedintoconglomerate(flooring,TV,footwear,etc.)untilrefocusingonhighgrowthmobilephonesegmentinlate1980sand1990sDivests

non-corebusinesses19951999AmericasROWEURRevenues

$BillionsStockappreciation(1998-99)NokiaS&PS&Pcelland

wirelessindexCAGR%CapabilitiesFirsttousemassmarketersasdistributors

(e.g.,sellingmobilephonesinRadioShack)Usesalliancesfordistributionchannels(e.g.,AT&TWirelessServices,Sears)Adoptsconsumerratherthanprofessionalfocusinmarketing,unlikecompetitorsUsesalliancesinR&Dtogrowdevelopmentcapabilities

(HP,Cisco,Geoworks)OrganizationAutonomyprovidedtoseniorleadershipinlocalsubsidiariesTopmanagementisallFinnish;obstacletohiringtopU.S.talentStrongemphasisoncorporatevaluesandculturewith“TheNokiaWay”–teamwork,innovation,production;difficulttoimplementinU.S.Excellentopportunitiesforadvancement-fastcareertracks,earlyresponsibility,rotationprogramsHierarchyandbureaucracyreducedYoung,innovative,non-rigidleadershipstyleRatedinFortunetop100firmstoworkforintheU.S.ProductGrewmobilephonesegmentfrom16%oftotalsalesin1991to66%in1999Alliedtogainproductexpertise(e.g.,Motorolatostandardizetechnology,CiscoandHPtodevelopnetworkproducts)Technologydesigninnovator;firsttomarketwithmanyproductinnovationsTailoredproducttotargetkeycustomers(e.g.,phoneswithfashionable,changeablecoverstoattractyoungsegment)BackgroundLeversforsuccess19.86.2Foundedaspapermill58%CAGREntersU.S.throughTandyJVGrowsmobilebusinessinU.S.19881983AcquiresMobira1981Operates

asaconglomerate1960s2CONTENTSCompanyoverviewU.S.marketentrystrategyProductsCapabilitiesOrganization3NOKIACOMPANYBACKGROUNDFounded1865,inFinland,asapulpandpapermillEnteredU.S.in1983,whencellularservicewasjustlaunchingintheU.S.Globalemployees55,260;inU.S.10,500CEO:JormaOllila(Finnish)MostseniormanagersforU.S.:Kari-PelekaWilska,PresidentofAmericasRichGeruson,HeadofUSASalesandMarketingforNokiaMobilePhonesKeydivisions:MobilePhones,NokiaNetworks,CommunicationsProductsMarketcap:$193.3billion(asofOctober27,2000)Keyindustryoffocus:Mobilephones(65%of1999totalsales)Number1mobilephonemakergloballyNumber2GSM/DCSmobilephonenetworksprovidergloballyCompetitors:Motorola,Ericsson4COMPANYEVOLUTION

Source: InternationalDirectoryofCompanyHistories1800sFounded1865inFinlandaspulpandpapermanufacturerConstructsownpowerplantsasindustrybecomesenergyintensive1960sMergeswithFinnishRubberWorksandFinnishCableWorksin1966aspartofdiversificationplanBeginstodesignandmanufacturedataprocessing,industrialautomation,andcommunicationssystemsNokiaconglomerateconsistsofintegratedcableoperations,electronics,tires,andrubberfootwearMakesfirstpublicshareofferingin19661970sOilcrisisin1973reducesrelianceonexports(timberproductsandmachinery)toSovietUnion(12%ofsales)KariKairamo,appointedCEOin1975,realizesthatforNokiatogrowithastoexpandabroad;expandsNokiainScandinaviaandEuropeSellsswitchingsystemsunderlicensefromallocated(French)Helpsdesignworld’sfirstinternationalcellularsysteminthe1970s1980sAcquiresnearly20electronicscompaniesoverthedecadeandcompleteskeymergersAcquiresMobira(Finnishmobilephonecompany)in1981,togainfootholdingrowingmobilephonesegmentMergesSalora(largestTVmanufacturerinScandinavia)andLuxor(Swedish-stateownedelectronicsandcomputerfirm)in1984Throughthe‘80s,manufacturesOEMequipmentforHitachi;Ericsson,NorthernTelecom,Granada,IBMEntersU.S.,in1983throughJVwithTandyCorporationtosellNokiaphonesunderTandynameLaunchesfirstproduct(mobilephones)marketedinternationallyunderNokiabrandnamein1986Nokiahasevolvedsubstantiallysinceitsfoundation,movingfromaFinnishpapermill,toadiversifiedFinnishconglomeratetoaglobalwirelessleader.1990sAggressivelygrowsmobilephonebusinessintheU.S.BuysTandy’sshareofJVin1993tofullyownfactoriesinU.S.andSouthKoreaSignssignificantcontractstoincreasedistributionchannels(e.g.,AT&TWirelessServices)ConglomeratephaseExpandsinScandinaviaandEuropeAcquiresandallysintomobilephonesandU.S.AllystostrengthenU.S.position5TimeHorizon1DrivecoregrowthHorizon2BuildmomentumofemerginggrowthenginesHorizon3SecurefutureoptionsProfit“Wearenowbenefitingfromthevisionarytechnologicalsolutionswemadeyearsago;thelong-termsuccessofourcompanyrequiresconstantagilityinpositioningourselvesinthis

dynamicindustry.”–JormaOllila,CEO“Toidentifywhatisrequiredinthelongtermyouneedthecompetenciesandtheproducts;gettingtherightfocusisthe

toughpart.”–JormaOllila,CEO“TheCEOhastounderstandthedynamicsofeachbusinessthecompanyisin;inordertounderstandwherethefuturelies.”–JormaOllila,CEO

Source: Annualreports;pressclippingsLEADERSHIPCOMMITMENTACROSSTHREEHORIZONSWhenplanningNokia’sfuturedevelopment,CEOJormaOlliladistinguishesclearlybetweenthreewaves.ThefirstwaveemphasizesthecontinuousexploitationofNokia’scorebusinesses.ThesecondwaverequirestheidentificationofcapabilitiesandproductsthatwillhaveimpactonNokia’ssuccessintheimmediatefuture.Finally,thethirdwavedeterminesthecompany’sfuturedirectionthroughsettingaspirationsandplacingoptions.6PLANNINGACROSSTHREETIMEHORIZONSProfitHorizon1Horizon2Horizon3DrivecoregrowthBuildmomentumofemerginggrowthenginesSecurefutureoptionsProducts•Boostmobilephonesalesthroughbrand-buildingefforts•Makeproductextensionssuchas“Swatch-likeneon-coloredmobilephones”•Expandproductrangethroughnewfeaturesandcomplementaryaccessories,suchasphonecoversordifferentbatterysizes•CreateR&Dalliancesforproductdevelopmentinwirelessdatatransmissionandterminaltechnology•Increasesalesoffixedandcellularnetworktopublictelecomoperators•Winprivatetelecomoperatorsasnewcustomers•Launchfirstwirelessproducts(e.g.,Nokia9000Communicator,aportablewithphone,fax,email,Internetaccessallinone)Markets•FurtherpenetrateScandinavia,partsofWesternEurope•ImprovepositioninginAsia/Pacific,US,otherEU-countriesthroughstrongerdistributionnetwork•PrepareforfullderegulationoftelecomindustryandentryintoremainingmarketsTimeHorizon1DrivecoregrowthHorizon2BuildmomentumofemerginggrowthenginesHorizon3Securefutureoptions

Source: McKinseyanalysis7SENIORMANAGEMENT

Source: AnnualReport

Spent6months

intheU.S.in1999

Spends50%of

histimeinSilicon

Valley8*AsofJanuary2000 Source: EpsicomBusinessIntelligenceNOKIAORGANIZATIONALSTRUCTURE“IaminfluencedbytheAmericanwayofmanagingcompanies;solvingproblemsthroughorganisingandmotivatingpeople,ratherthanseekingatechnicalsolution.”–JormaOllilaNokiaGroupJormaOllila,CEOHeadofficefunctionsCFOInternationalTradePolicyTechnologyResearchCenterGeneralCounselHumanResourcesCommuni-cationsInternationalTradeAffairsNokiaNetworksNokiaMobilePhonesNokiaCommunicationsProductsNokiaMultimediaTerminalsNokiaIndustrialElectronicsNokiaVenturesNokiaResearchCenterNokiaInternetCommunicationsNokiaVenturesFundInternalVenturingUnitNokiaWirelessBusinessCommunicationsNokiaWirelessSoftwareSolutionsNokiaIPApplicationandConnectivityPlatform9WorldtelecomequipmentindexS&P500NokiaNOKIASTOCKPRICECOMPARISON$Thousands

Source: DatastreamValue198819891990199119921993199419951996199719981999Nokiaclearlyoutperformsthemarketanditscompetition.10Asia-PacificEurope19951996199719981999NOKIASALESBYREGIONEuroMillionsNokia’ssalesinNorthAmericahavegrowndramaticallyinthelate90’swithaCAGRof58percent,whileEuropeancontributiontosaleshasdiminishedsteadilyshrinking.NorthAmerica6,1916,6138,84913,32619,772CAGR

Percent34372658

Source: Annualreports100%=11ROWFinland

(676)1991100%=EURO2,600ROW1999100%=EURO19,772Finland(395)Nokia’ssalesinFinlandhavefallendramaticallyasapercentageoftotalsales.

Source: AnnualreportsEuroMillionsNOKIA’SFINLANDSALESCOMPAREDTORESTOFWORLD12NOKIA’SINDUSTRYFOCUSANDPRODUCTMIXEuroMillions

Source: AnnualreportsSalesbyproductConsumerelectronicsCablesandmachineryMobileproductsTelecommuni-cations1991

100%=EURO2,600BasicindustriesNetworksolutionsMobileproducts1999

100%=EURO19,772Home,multimedia,andotherNokia’sproductsMobileproducts–fullrangeofdigitalandanalogcellularphones,wide-areapagers,aswellasaccessoriesandcomponentsformobilephonesNetworksolutions–telecommunicationsystemsandequipmentforbothfixedandmobilenetworks;principalproductsincludedigitalexchanges,transmissionsystems,andcellularsystems,whicharesoldtoPTT,publicutilities,newoperators,andcableTVcompaniesHome,multimediaandother–includesPCandworkstationmonitors,aswellasinteractivedigitalsatelliteandcableterminalsIn1998,Nokiabecametheworld’slargestmanufacturerofmobilephones,selling40.8millionhandsets,andgrewsalesgrew51percentfrom1998to1999.“Threeyearsagowe

decidedtocreateatelecom-orientedcompany.Wehavebeenabletoimplementthechangesfasterthanweexpected.”–JormaOllila,FinancialTimes,

09/07/199513SUBSIDIARYLOCATIONSANDRESEARCHCENTERSNOTEXHAUSTIVE(5)(2)(3)(1)(3)(14)(3)(1)(4)(1)(17)(2)(3)(1)(5)(1)(2)(1)(5)(6)(3)(1)(3)(4)(2)(2)(2)(2)(2)(1)(2)(2)(2)(6)(1)(2)(3)(3)(1)(1)(1)(9)(7)(2)(2)(1)(1)(1)(1)(1)(1)(2)(1)(1)(1)(1)(1)(6)(7)(3)(2)ResearchNokiacoversanexpansivegeography.14CONTENTSCompanyoverviewU.S.marketentrystrategyProductsCapabilitiesOrganization15STORYLINEAtthebeginningofthe1980’sNokiawasstilladiversifiedcompany,relyingpredominantlyonEurope(particularlyScandinavia)todrivesalesHowever,thecompanyrealizedthatsignificantgrowthwouldbedependentonbuildingamajorpresenceintheU.S.market,inhighreturnsegmentsTodosotheyacquiredMobira(Finland)in1981togainafootholdintherapidlyemergingmobilephonesector.TheyrapidlygrewthisopportunityintheU.S.throughaseriesofOEMrelationships(GTE,Delco,SouthwesternBell,BellAtlantic)andajointventurewithTandyCorporationin1983Nokialaunchedtheirownbrandmobilephonein1986andpursuedaggressivebrandingandalliancestrategies(e.g.,RooftopCommunications,Compaq,AT&TWirelessServices)tosolidifytheirpresence16Nokiawasthefirstplayertousemassmarketdistributionchannelsfortelecommunicationsequipment.

Source: InternationalDirectoryforCompanyHistories,AnnualReports,pressclippings1992Beginstoaggress-ivelymarketownbrandedproducts198319921993199519971983CellularservicelaunchedinU.S.;JVwithTandyCorp.tosellNokiaphonesthrough6,000RadioShackstores;JVincludesjointownershipoffactories1992NokiaandTandyCorp.openamobilephonefactoryinTexas;NorthandSouthAmericanmarketsarehalfofglobalmobilephonesmarket199619941997CFOofNokiadeployedasHeadofU.S.business;U.S.subsidiaryseesimmensegrowthfrom1997-991993AcquiresTandy’sshareinbothmanufacturingcompanies;overall,operates5factories;continuessellingthroughTandyretailformatsDe-emphasizesconsumerelectronicsbusiness1995NewdistributionfacilityopenedinFortWorth,TXGrantedlicensetoAmericanPortableTelecom(privatecellularnetworkoperator)forPCS1,900MHzproduct1996SignssignificantcontractswithAT&TWirelessServices,SprintSpectrum,andPowertel1986Launchesownbrandproductglobally1988Divestsflooring,paper,rubber,andventilationsystemsbusinesses19861988Earlyandmid-eightiesAggressivelysoughtandsignedOEMdealswithnumerousU.S.companies(e.g.,GTE,Delco,etc.)TIMELINEOFKEYEVENTSINNOKIA’SU.S.BUSINESS17CONTENTSCompanyoverviewU.S.marketentrystrategyProductsCapabilitiesOrganization18Nokiamadebigbetsastowhichtechnologieswouldemerge,redirectingresourcesandcompanyfocustoemphasizethesecategories.PRODUCTSTRATEGY“Thechoiceoffocusisextremelyimportant.Weconstantlystrivetomakesurewearefocusedontargetedmarketsinwhichthegrowthrateismuchhigherthanthatofthetotalmarket,Nokia’saimistogrowsomewhatfasterthanthetargetedmarketsdo.”

–MattiAlahuta,President,MobilePhones

19Nokia’sacquisitionsintheU.S.wereprimarilytobroadenitsproductcapabilities.PRODUCTACQUISITIONS

Source: SecuritiesDataCorporationandpressclippings20CONTENTSCompanyoverviewU.S.marketentrystrategyProductsCapabilitiesOrganization21Developed,launchedandraninnovativeconsumergoodsmarketingcampaignsunliketheircompetitorswhowererunningprofessionalfocusedcampaignsEstablishedbrandnameintheU.S.throughcleverconsumersegmenttargeting(e.g.,extensiveadsonMTVtoreachyoungersegments)MarketingDevelopedrelationshipswithretailersanddistributorstobroadenanddeepenmarketpenetrationJVwithTandyCorporationtosellthroughRadioShackOEMmanufacturingforGTE,Delco,SouthwesternBell,BellAtlanticmobilesystemsandothersDistributionagreementwithSearsDistributioncontractswithAT&TWirelessServiceforNokiabrandedmobilephonesDistributionR&DcontrolledoutofFinlandLeveragedpartnershipsformoreefficientR&DCooperationwithGeoworkstodevelopnextgenerationwirelessproductsJVswithHewlett-Packard,Cisco,Geoworksforhigh-techproductdevelopmentLowinvestment,highreturnR&DstrategyprovidescompetitiveadvantagetoNokiawhocanreactfastertochangingtechnologiesthananycompetitorUseofstandardcomponentstoenableoutsourcingofnon-coretechnologies(e.g.,microprocessorsfromIntel,componentsfromMotorola,semi-conductorsfromAT&T)SimilarproductdesignallowsNokiatousethesameproductionlineformultipleproductsandenablesthemtoreactquicklytochangesindemandbyshiftingfromonemodeltoanotherR&DAlliances/partnershipsprovide

alargeportionofNokiacapabilitiesNokiahasdevelopedastrongcapabilityplatformintheU.S.;primarilydrivenbyalliancesandpartnerships.CAPABILITYPLATFORM22BRANDDEVELOPMENTStartingin1994,Nokiaincreasedcorporatebrandawarenessthroughvigorousadvertisingcaigns.

Source: Annualreports;pressreleases;pressclippings;companywebsiteNokia6100Seriesphone23Nokiakeptitsadvertisingconsumerfriendlyandeasytofollow,incontrasttotheircompetitorswhotargetedprofessionalsNOKIACOMMUNICATIONSTRATEGYSincetheearlyninetiesNokia’svaluepropositiontotheconsumerhasbeensingle-mindedon‘simplicity’and‘ease’ofusingmobilephonesThepropositionof‘simplicity’isfurtherenhancedbythetoneofvoiceandvisualsusedinthecommunicationThepropositionhasbeencommunicatedthroughalltheircommunicationeffortsbothinmassmediaandatpoint-of-sale24

Source: Pressarticles;annualreports;ECCHCollectionCaseStudyNokiaMotorolaEricssonPercentageofsalesR&DEXPENDITURES1995NokiaspendsrelativelylittleonR&D,but

stillachievesahighreturnonitsR&D

investmentthroughNumerousR&Dpartnershipswithoutsiderssuchasuniversities,andhigh-techcompaniesOutsourcingofnon-coretechnologies(e.g.,microprocessorsfromIntel,componentsfromMotorola,semiconductorsfromAT&T)FocusedR&Dprogramsconcentratingresourcesonfuturegrowthareas;e.g.,cellulardatatransmissionUseofcheapindustrystandardproductsasabaseratherthanmoreexpensivesystemsEverythirdNokiaemployeeworksinR&D.R&Dcentersexistin14countriesonfourcontinents.25JOINTR&DACTIVITIES“Wedonotaimtodoeverythingbyourselves;andwhenit’snecessaryweformpartnershipswithotherpioneersoftechnology;thismeansfocusingonwhatwearebestatandcomplementingitwiththeexpertiseofothers.”PartnercompanyProductsStartAT&T,U.S.GSMcomponents1989Qualcomm,U.S.CDMAtechnology1990Cicso,U.S.ATMnetworks1994Geoworks,U.S.Wirelessproducts1995Psion,U.S.SoftwareforGSM1996NokiahasbuiltextensiveR&Dpartnerships.Forexle,atthebeginningof1994,NokiasignedanagreementwithHewlett-PackardtocooperateinthedevelopmentofIntelligentNetworksystemsfortelecommunicationsoperators.TheagreementcentersaroundtheintegrationanddevelopmentofkeyINarchitectureelements.

Source: Pressclippings;pressreleases;InternethomepageNOTEXHAUSTIVE26President,NokiaTelecommunicationsÌNetworkandAccessSystemsDivisionObjectiveTojointlydevelopATM-based(broadband)servicesolutionsforcompetitivetelecomoperatorsinderegulatedmarketsthatprovideservicesfor•Corporatecustomers:needtoincreaseconnectivityacross

thecompany•Residentialcustomers:requireadvanceddataandvideo(multimedia)servicesCisco•Dataandprivatenetwork/corporateapplicationsknow-how(marketleaderinswitchedinternetworking;e.g.,routers,LAN,andATMswitchesNokia•Experienceintelecomoperatorbusiness•Expertiseinvoicetransmissioninfra-

structureandnetworkmanagement“Thiscooperationanswerstheneedforfasterbuildingofnewcompetencies,fasterR&Dcycles,andtherighttimingofproductlaunches.”

Source: Nokiapressrelease;pressarticlesNOKIA/CISCOR&DALLIANCE–EXAMPLEIn1995,NokiaandCiscoSystems,U.S.,establishedastrategicalliancetodevelopATM-basednetworkproductstoprovidetotaltelecomservicesolutionstocompanies.27

Source: PressclippingsNOTEXHAUSTIVENokiausedstrategicalliancestogainanumberofproductandmarketingcapabilitiesintheU.S.;Nokiawasparticularlyactivein2000.STRATEGICALLIANCES28

Source: PressclippingsSTRATEGICALLIANCES(CONTINUED)NOTEXHAUSTIVE29CONTENTSCompanyoverviewU.S.marketentrystrategyProductsCapabilitiesOrganization30ORGANIZATIONALLEVERSNokiahasmadeseveralmovesinthepastyearstobetteralignitsorganization31

Source: Annualreports;InternethomepageManagingtheflowExtensiverecruitingSelectsetofnewhires“Peoplearethemostcrucialresourceinmanaginggrowth;youhavetoconstantlyrecruitandintegratethebestpeopleintoyourculture.”“Teamwork–isoneofthebasicelementsofNokia,westresscommunicationandsocialskills,inadditiontoprofessionalexcellence.”• Recruitingeventsatinternationaluniversitiesandbusinessschools• CareeropportunityadsininternationalandregionalnewspapersandontheInternet• CreationofearlytiesthroughinternationalstudentexchangeprogramofferingtraineeplacementsinallNokiabusinessgroupsworldwide•Universitydegreepreferablyinscienceorbusinessstudies•Academicexcellence• Outgoing,confidentpersonalityabletosolveproblemsindependently,whileatthesametimeworkinateam“Mucheffortisinvestedinimprovinginductionprograms;butwe’vegottofindawaytoavoidbureaucracyandmaintainentrepreneurialspirit.”• QuicklyindoctrinatenewpersonnelintheNokiawayofdoingbusiness• InstillaspiritofcontinuouslearninginallnewemployeesNokiaviewspeopleasitsmostimportantasset.TALENTMANAGEMENTTECHNIQUES32“Wehaveachievedthebestresultsinunitswheretherehasbeenaclearemphasisoncontinuouslearning,improvingskillsandquality,ambitiousgoals,andalsorespectfortheindividual;ensuringthatthesevaluestakerootandflourishthroughouttheGroupisacentralthemepermeatingallofNokia’shumanresourcedevelopmentprograms.”–JormaOllila,CEO“NokiaWay”hasbeendifficulttoimplementintheU.S.--“Theculturedoesn’thavethesamerichnessorvalueasitdoesinEurope”CustomersatisfactionContinuouslearningRespectfortheindividualAchievement

Source: Internethomepage;annualreportsNOKIAVALUESNokia’sgrowthtargetsarewellbalancedwithitslongtermvalues.TheNokiaWay33“Weworkhard;10hours–andifnecessary–12hoursaday…wehavetomakesurethatwedon’tbecome…lazy.” –JormaOllila,CEO“Nokiaisanextremelytoughenvironment;peopleworklikehell;there’sanongoingjokethatNokiaprovidesfreeeyedrops,becauseitsemployees’eyesarealways

redduetolackofsleep.”“It’saswimorsinkmentality...butifyousurviveyoucanbepresidentofasubsidiaryafter3years.”“Yes,Nokiaisperformance-driven...butit’salsoafunplacetowork;forexle,ithasroomswithpooltableswheretheteamcangoandrelaxforawhile.”“Underperformersarenotfired;theystaywithNokia,butarereassignedtolessdemandingtasks...atleastinFinland;maybethat’sdifferentinforeignsubsidiaries.”“Oneimportantbrickinbuildingasuccessfulcompanyisthattheworkplaceisfunandthateverybodyknowswhytheyareworkingthere.”

–PetteriWaldea,NokiaCablePerformance-drivenculture......withcommunityfeel

Source: InterviewswithMcKinseyconsultants;pressclippingsNokia’scultureisstronglyorientedtowardsperformance,temperedbyacommunityatmosphereFORINTERNAL

USEONLYNOKIA’SGLOBALCULTURE(EUROPEANCULTURE)34Appendix1991annualreport“NokiaisaEuropeantechnologygroup.”1992annualreport“Nokiaisaninternationalelectronicsandelectrotechnicalgroup.”1993annualreport“Nokiaisaninternationaltelecom-municationsandelectronicsgroup”1994annualreport“Nokiaisaleadinginternationaltelecommunicationscompany.”Theevolvingfocusofthecompanyduringtheinflectionperiodisreflectedinthechangingannualreport.COMPANYDESCRIPTIONS

36ExistingcompetitivearenaMoveintonewcompetitivearenavs.ExistinggeographyExpansionintonewgeographiesvs.Existingindustrystructurevs.ImprovementofindustrystructureExistingvaluedeliverysystemvs.Innovationofvaluedeliverysystemvs.ExistingproductsandservicesInnovationofproductsandservicesExistingbusinessandcapabilityplatform• Continuouslystrengthenpositioninthetelecommunicationsmarket• Almost100%ofbusinessactivitiesconcentratedintelecommunications•91%of1995salesoutsideofFinland,comparedto52%in1988•StrongestgrowthraterecordedoutsideofEurope,especiallyin

Asia-Pacific•Newproductdevelopmentandextensionofexistingproductlinethroughnewfunctionalities(e.g.,pushintowirelessofficecommunicationthroughNokia9000Communicatorcombiningphone,fax,E-mail,andInternetaccessinoneportableunit)•Innovativeproductdesignattractingnewcustomersegments•Firsttousemassmarketdistributionchannelsfortelecommunicationsequipmentoutofneedtoquicklyachievehighcoverage(e.g.,sellingmobilephonesintheU.S.throughRadioShack)•StrategicalliancesinR&Dspeedinguptechnologicaldevelopment•Contributionstodevelopmentofindustrystandards;e.g.,EFRvoicecodedevelopedbyNokiaandtheUniversityofSherbrooke,Canada,madeindustrystandardforGSMandDCSin1995Growthwasfueledthroughpursuingmultiplegrowthpaths.

Source: Annualreports;McKinseyanalysis;pressclippingsPURSUINGMULTIPLEGROWTHPATHS

37

Source: Annualreports,McKinseyanalysisEXPANSIVEMINDSETTHROUGHSTRATEGICFOCUS

Unprofitablediversityin1986Aglobalforceintelecommunicationsin1996Non-telecomsalesdecreasedfrom70%–30%ofsalesTelecomsalesincreasedfromFIM2billion–25.8billionManufacturingfacilitiesin14countries,personnelin45countries,salesin120countriesUtilitysold1993-95Footwearsold1988Cablesold1996Chemicalssold1991TVssold1996TelecomequipmentElectricappliancessold1993-94Softtissuesold1990FinlandFrom......to38ChangefromanalogtodigitaltechnologyDevelopmentofcellularinfra-structureandequipmentGrowthopportunities......capturedbyNokia•Strongfocusondevelopmentanddesignofdigitalmobilephonestoachievehigh-marketpenetration•Earlyentryintothosemarketswherecellularnetworkswerefirstdevelopedtogainexperienceinhightechnicalandproductqua