Nokia Mobile Telecommunications 2002 STRATEGY DESIGN VISIONSTRATEGIC INTENT

Nokia Mobile Telecommunications ΑΔΑΜ ΚΟΣΜΑΣ ΜΑΙΟΣ 2002

STRATEGY DESIGN • • VISION/STRATEGIC INTENT INTERNAL ANALYSIS EXTERNAL ANALYSIS IMPLEMENTATION

RELATED DIVERSIFICATION(1) • OLD CORPORATE STRATEGY – GRADUAL CHANGE OF PRODUCTION LINE TO RELATIVE BRANCHES • OLD PRODUCTION LINE – CABLES PAPER WOOD – CABLE FACTORY DIVERSIFICATION TO ELECTRONICS – ‘ 90 s FOCUS IN TELECOM

RELATED DIVERSIFICATION(2) • Old branch were profitable • Diversification relied on old branches profits • Trial and error procedure – Electronic branch became profitable in ‘ 80 s – Focus on telecom due to low profits of electronic branch.

RELATED DIVERSIFICATION(3) • In 90 s Nokia withdraws from paper and cable production • Inter-organisational co-operations • Acquisitions(domestic market firstly)

RELATED DIVERSIFICATION(4) • Two strange key factors of success – public telecom operator – NMT • Big and advanced market • Offered business opportunities • Head start for competitors

Nokia • A leading end-to-end infrastructure supplier • World's largest manufacturer of mobile phones • More than 55 000 employees • Netsales USD 20 billion 1999 • Market capitalization value over USD 200 billion 7 © NOKIA TABD. PPT /15. 9. 1999/VS

Nokia Worldwide Sales offices R&D Production, incl. joint ventures

NOKIA GROUP BRANCHES • NOKIA MOBILE PHONES • NOKIA TELECOMMUNICATIONS • NOKIA VENTURE

STRATEGIC VISION • VISION’S DESCRIPTION IS SORT – “CONNECTING PEOPLE”

Customer Analysis • 18 -29 years of age • Mainstream product • 2 segments; Consumer/Business

Consumer Segment • Light Users • Medium Users • Heavy Users

Buying Behavior • Light/Medium users – Price – Low information search – Package deals • Heavy users – Functional & Psychological reasons – High information search

Business Segment • Functional motive – Battery life, capabilities, etc. • Buyers; Company or individual employees – Criteria • Employees; capabilities, brand • Company; price, capabilities, provider deals

Competitors Analysis • Asian Region • European Region • American Region

Market Analysis • 275 millions of phones sold in 1999 • Nokia’s share - 79 million units • 93% increase from 1998 • 50% more than in 1998

The Market is Changing Mobile vs. Fixed Subscribers (worldwide) (worldwide 2000 Mobile Fixed Data vs. Voice Traffic 1500 1000 500 0 1985 1988 1991 1994 1997 2000 2003 2006 Bits in the operator networks 2500 Data Voice 1985 1988 1991 1994 Sources : Nokia, ITU, Dataquest, EMC, Global Mobile (worldwide) 1997 2000 2003 2006

Internet Connectivity Outlook Millions 1, 400 1, 200 1, 000 800 More handsets connected to the Internet than PC's by end of 2003 ! Projected 1 billion Mobile Subscribers Projected PC's Connected to the internet 600 400 200 Projected WAP Handsets 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

From NMT to 3 G

Socio - Cultural • Unspoken Code of Conduct - Using phones in public venues. • Fashion Statement - Phones have become an accessory

Political - Legal • Medical device interference. • Health problems - memory loss, brain cancer. • Dangerous while operating a vehicle

SWOT Analysis • Strengths – Strong Organization – Great brand name recognition – One of best innovators in the Industry – Sets tone for the entire market technologically • Weaknesses – Large Organization – Different market operations • Control • Currency risks

SWOT Analysis • Opportunities – New Markets – Internet • Threats – Risk – Changing Technology – Increased competition • Asia • Europe • USA

BCG Matrix 60% 50% - Stars 45% 40% - Question Marks 35% 30% 25% 20% 15% - Cash Cows Dogs 10% 5 % 0 10 X 5 X 1 X 0. 5 X 0. 1 X

Pricing • 2 segments and systems • Cellular network providers – Selling high quantities in bulk – To price sensitive market • Individuals needing top line products – Not price sensitive – Newest technology – Newest design

Product • 18 new models in 1999 New demand driven • applications • services • devices and • design

Promotion • Consumer segment – Mass media; TV/papers/magazines – Co-op advertising – Internet – Sports events • Snowboarding World Cup • Adventure Sports – Boat/balloons

Promotion • Business Segment – Sales agents – Promotion targeted towards consumers

Product-Market Expansion Strategy • Currently in 130 different markets • Joint ventures/distributor agreements • Continue to expand as long as need and buying power exists. • Expansion of GSM and 3 G network. – China, UK, Philippines, Norway, Turkey

Europe is still leading the way…. Forrester Predicts That One in Three Europeans Will Access the Net Via Mobile Phone by 2004 AMSTERDAM, Netherlands--(BUSINESS WIRE) via News. Edge Corporation --Europe stands on the brink of a revolution in Internet access. By 2004, one-third of all Europeans -- more than 219 million consumers -- will regularly use their mobile phones to access Internet services according to a new Report from Forrester Research B. V. (Nasdaq: FORR). Although the sites that will host these services are already being built, it remains unclear whether mobile operators will provide free and open access to these sites. Europeans lead the world in mobile phone use, with more than 117 million people in the EU carrying mobile phones. Many of these phones are already being used for data -- Europeans pass more than 2 billion short message service (SMS) messages a month to chat and read sports scores. These two factors, plus the introduction of wireless application protocol (WAP) phones, will vault Europe into the lead for mobile Internet access. (continues…. ) dated: 1999 -12 -16

Differentiation

Diversification Information Entertainment WAP Development Voice e-mail Video e-shopping and banking

Concentrate on youth • Finnish teenagers send on average 100 messages per month • Up to 90%, on average 50% of the bill is SMS • Teenager bill '97 was $20 • Teenager bill '98 was $40 -$50

WE HAVE ONLY SEEN THE BEGINNING Thank you