IIPM NEW-DELHI: Convergence of diversification

Thursday, March 27, 2008

Convergence of diversification

Now, Nokia wants complete dominance
The dawn of the New Year 2008 will mark Nokia, the

world leader in mobility and operating in 130 nations across the globe, adopting a new company structure. That’s when the company will have two reportable segments viz - Devices & Services and Nokia Siemens Networks. The current business group and the horizontal group structure in the device business will be replaced with Devices Services & Software and Markets. The strategy is meant to create an organisation which will be well aligned with future growth opportunities around converging internet and telephony services. “The convergence of mobile communications and internet industries is opening up new growth opportunities for us,” professes Nokia CEO Olli-Pekka Kallasvuo. The basis of the CEO’s prophecy is perhaps based on Nokia’s expectation that the newly proposed structure will prove to be effective in managing the device portfolio and streamline the marketing and production efforts. Perhaps Nokia is treading the same trodden path as traversed by the likes of Motorola and Apple. Nonetheless, it is a rational step as far as its endeavours to change with the changing times is concerned. Plans to divorce the supply chain, sales channel and marketing activities from the product division and further realign them into one unit are also on the anvil. With the focus clearly on the trio, the dream of Nokia, though in its infancy, is to be able to own the entire value chain and then sell it in entirety as a complete package to its customers.

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Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative