Nokia Strategic Audit Presented by
Recommendation 2: Invest in Battery Alternatives Research
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- Recommendation 3: Make Enterprise Services Profitable, Or Sell It
- Recommendation 4: Improve Support for Third-Party Application Developers
- Recommendation 5: Leverage Brand Strength Into In-Car Communications
Recommendation 2: Invest in Battery Alternatives ResearchThe most frustrating experience for most cell phone users is repeated thousands of times each day. The message to their caller is always the same. It usually starts with, “Sorry, I may lose you. My battery is almost dead.” This experience is frustrating and inconvenient. Cell phone users want a cell phone battery that has a charge lasting a month or even longer. There are several companies including H2Volt, Nitto Denko, and Mechanical Technology (MDTL)60 that are developing new batteries using fuel cell technology. Some experts believe we are only two years away from having a cell phone prototype that is of equal size to lithium-ion batteries.61 Cell phone manufacturers have the opportunity to support the development of these products. Nokia could greatly benefit from alternative cell phone battery technology. Considering the fact that some of its emerging markets have limited infrastructure and in some cases third-world limitations, Nokia needs a cell phone battery that doesn’t require regular access to a wall outlet. Adequate electricity and accessible power is a barrier for many developing third-world countries. Since there are several companies who are advanced in their research and development it doesn’t make sense for Nokia to start its own R&D initiative. Instead, we recommend that they partner or purchase a controlling interest in one of the major companies who have promising technology. For example Mechanical Technology, an Albany, New York, based company has a battery that has been tested to last 90 hours of talk time. They currently have several high-powered partners including Duracell, the U.S. Air Force, and the U.S. Army. MDTL will need another cash infusion by 2008 in order to sustain its research. Their current stock price is a bargain at under $2.00 per share. The word is that they will be looking for another partner to provide capital. It makes sense for Nokia to step into the picture and develop this partnership and possibly take on a controlling interest in the company. Efforts to evaluate this partnership should begin immediately. Considering the existing technologies under development Nokia needs to move quickly. To gain controlling interest of this company they should expect to invest approximately $30 million.
Recommendation 3: Make Enterprise Services Profitable, Or Sell ItAs addressed in the Finance section of this report, Enterprise Services is the only division which runs at an operating loss. This situation is unsustainable. Enterprise Services should be given a mandate to become profitable in 36 months. By 12 months, ES should cut its operating loss by 40%, and by 24 months, 80%. Whether this goal is accomplished by growing revenue, cutting spending, or both, is a tactical question best left to group management, but the goal is aggressive, attainable, and quantifiable. If ES cannot become profitable in 36 months, Nokia should investigate options to sell that business. As described previously, there are reasons to run a business at a loss in the medium term, but those reasons don’t apply to Enterprise Services. Removing that business from Nokia’s portfolio would improve the company’s net margin by a full percentage point.
An open-source model may not be appropriate for handsets; even though there’s no evidence of open-source-based computers being less secure than their closed-source counterparts, we’d expect handset makers such as Nokia to have an instinctive fear of opening their platforms too much, out of an overabundance of caution. The first time people’s cellphones begin to crash mid-call, the maker of those phones is going to have a truly difficult time remaining a viable player in the market. At the same time, as multimedia players, PDAs, and cellphones all converge into a single platform, third-party application support becomes crucial. The platform which can do the most things, do them well, and do them simply, is likely to be the eventual winner. To compete in that world, Nokia must either spend truly astronomical sums of money on in-house R&D, or partner with third-party application developers to make their platform the platform of choice for a variety of tasks – of which some haven’t even been conceived yet. Support for this recommendation requires a department of about 30 people, mostly engineers skilled in technical marketing, who both understand the workings of the Nokia platforms and can represent the company in enabling third parties to create applications to run on those platforms. Recommendation 5: Leverage Brand Strength Into In-Car CommunicationsNokia should explore opportunities to team with automobile manufacturers to develop new communications devices. Nokia’s knowledge of communication technology may be leveraged into automobiles. Various wired or wireless methods may be employed to connect personal communication devices with vehicles. Volvo and Saab will be ideal candidates for pilot projects. Personal communication equipment has the potential to serve for security, location, monitoring, and many other user controlled functions. Automobiles are increasingly employing electronic controls. Drivers may personalize the function of their vehicles through the use of a single unit. An individual could use a single control in a variety of vehicles. The concept may be incorporated into fleet operations, law enforcement such as DUI, or parent/child oversight. Data collection opportunities also exist. Higher levels of automobile security may be achieved through new communications devices. This concept will bring new benefits to both Nokia and the automobile industry. The possibilities for a single in-car compatible communication device are virtually endless. Development of such a product will require six months to one year for feasibility level studies, including prototyping to establish a rough-working model prior to a year to facilitate production. The development period will take about a year and a half. Extending Bluetooth technology to the new equipment will require less time than developing completely new technology. This approach is in line with Nokia’s philosophy of leveraging existing technology. The development period will be similar to that of new car model development. The design will require a small project team of 10 to 12 employees – engineers, salespeople, and marketing representatives. Volvo is going after the ultra luxury mega-horsepower SUV with the XC60 model. They want to keep the title of North America’s best-selling European SUV. Volvo sells about one million XC90 SUVs annually. If ten percent of these vehicles were sold with our new in-car technology, the delivered cost will be $40 - $50. This new toy may be sold for $200. The new product will move into mainstream autos as the cost of production drops. Directory: indiv indiv -> Cell phone industry analysis indiv -> Industry analysis: wearable technology indiv -> Note From the Indivisible team indiv -> Chapter 4 Studyguide Fabula, Syuzyet and Style Fabula indiv -> On the Design of Intelligent Memory Functions for Virtual Meeting Places: Examining Potential Benefits and Requirements Version 11 indiv -> Gm 105 Strategic management Strategic Audit indiv -> Professor Emily Gilbert indiv -> Symbolic logic: Predicate Logic identity three ways of using the verb “To be” indiv -> Mirra Ginsburg Papers 1910 1999 20 linear feet in 38 boxes Biography/History Download 399.22 Kb. Share with your friends:
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