microsoftnokia - strategic innovation for the newly merged entity - by noam bernstein

STRATEGIC INNOVATION EXERCISE – NOAM BERNSTEIN 1

STRATEGIC INNOVATION ANALYSIS for A NEWLY MERGED ENTITY OCTOBER 23, 2013


Created by Noam Bernstein http://www.linkedin.com/pub/noam-bernstein/1/ab0/651 https://www.vizify.com/noam-bernstein

Enjoy!

http://www.linkedin.com/pub/noam-bernstein/1/ab0/651









https://www.vizify.com/noam-bernstein




STRATEGIC INNOVATION EXERCISE – NOAM BERNSTEIN

us/default.aspx-http://www.microsoft.com/en

http://www.forbes.com/sites/forbesleadershipforum/2013/09/04/microsoft-and-nokia-a-marriage-made-in-hell/

-microsoft-/why04/09/2013http://www.forbes.com/sites/nigamarora/ phones/-nokias-buy-to-stupid-not-was

/7000020161-quit-or-down-double-was-it-acquisition-nokia-http://www.zdnet.com/microsofts

3

http://www.microsoft.com/en-us/default.aspx
























http://www.forbes.com/sites/nigamarora/2013/09/04/why-microsoft-was-not-stupid-to-buy-nokias-phones/























http://www.zdnet.com/microsofts-nokia-acquisition-it-was-double-down-or-quit-7000020161/




















STRATEGIC INNOVATION EXERCISE – NOAM BERNSTEIN Innovation Exercise 4

Where should play to win?


Assets filter (customers, channels, knowhow)

Core Microsoft

Core Far out

Opportunity trends (size & time)

Time

Size

Capital filter (advantage)

Time to ROI

Cap

ital

Ne

ed

ed

?

Innovation Exercise 5

To sift through hype & rumor, data driven frameworks synthesizing external opportunity with internal capabilities & assets should be applied


Customers

Fit to Microsoft Customer

Fit

to N

oki

a C

ust

om

ers

Geographies

Fit to Microsoft

Fit

to N

oki

a

Channels

Fit to Microsoft Channels

Fit

to N

oki

a C

han

nel

s


Customers are today, more than ever, at center; channels & regions are still very real, hard won assets; these criteria help filter & focus where to innovate


Microsoft remains a multi-product powerhouse brand in homes & offices of millions of users worldwide, despite recent devices & performance

http://www.forbes.com/companies/microsoft/

http://www.forbes.com/companies/microsoft/


Microsoft led early on in the computer software services arena; Today it competes with giants in many arenas; Apple & Google are strongest

https://www.google.com/finance

1990-today

2008 -today

Microsoft Apple Google

https://www.google.com/finance


qtr.png-2013-June-vendors-smartphone-Windows-/IDC08/2013i.forbesimg.com/chuckjones/files/-http://b


Microsoft’s sheer scale affords it patience towards a longer term horizon; Today a mere 3.1% of market, Windows Phone is expected to reach 10.2% in 2017

Today, 8.7 million Windows Phone smart phones make 3.1% In 2017, Windows Phone is forecast to reach 10.2%

http://b-i.forbesimg.com/chuckjones/files/2013/08/IDC-Windows-smartphone-vendors-June-2013-qtr.png




















http://www.forbes.com/companies/nokia/ finan.png113http://allaboutwindowsphone.com/images/news/misc/q


Nokia, pioneer of cellular phones, failed to identify the smart phone revolution; No longer leader, Nokia still hold major market share in many global markets

http://www.forbes.com/companies/nokia/

http://allaboutwindowsphone.com/images/news/misc/q113finan.png



STRATEGIC INNOVATION EXERCISE – NOAM BERNSTEIN Innovation Exercise million/-8-5-with-2013-1q-for-revenue-in-billion-7-7-hits-/nokia18/04/2013http://www.engadget.com/ 11

Nonetheless, and far from US hype, the Lumia smart phone sold 61.9 million units (a feat few companies worldwide are capable of)

http://www.engadget.com/2013/04/18/nokia-hits-7-7-billion-in-revenue-for-q1-2013-with-5-8-million/



































Heritage, capabilities, assets; driven by a strong user-centered DNA, Nokia’s distinct design & color identity, is produced, distributed & sold worldwide


Windows Phone/ Mobile

Lumia Smart Phones

50% market share of feature phones

Windows

Office (Business)

xBox (Live/360)

Kinnect

SkyDrive Bing Skype

Windows Store

Yammer

Outlook.com

MSN

Azure (Business)

Global Distribution

Nokia Networks

Nokia Equipment

Handset & Hardware

design Low cost Manufacturing

Nokia BetaLabs

“Here” Apps

Windows Explorer

Global User research

Design Identity

Business Channel

Internet Explorer

The Lumia+Windows Phone collaboration represents a fraction of the potential; Smart combinations range over products, services, users, channels & regions


“What SHOULD be done”

Industry Analysis

Trends

Products, Assets & Capabilities

Products Assets & Capabilities

“What they CAN do, BETTER”


With such a broad portfolio of products, assets & capabilities to work with, an external industry & trend hypothesis is a more pragmatic focus method

Best Innovation Areas External need hypothesis Internal focus filter

1 2

3


To be at the right place at the right time should synchronize offerings to users & channels, “on trend”


Millenials (& digital natives)

Macro-economic crisis

Emerging economies

The “long tail” Frugal Innovation


Macroeconomics, technology & culture are interacting, impacting consumption around the world, and the way companies support it


Augmented Reality

Smartphone commoditizing

Big Data hedging (search social & location)

Consumerization of Business IT

Internet of Things


Within and near Microsoft’s activity areas, expressions of macro trends pose early signs of potential nascent categories & risky maturing markets


Assets filter (customers, channels, knowhow)

Core Microsoft

Nokia Others Lumia

Need New

Core Microsoft

Core Far out

Opportunity trends (size & time)

Time

Size

Capital filter (advantage)

Time to ROI

Cap

ital

Ne

ed

ed Expensive &

long term

Other can do too

Others can do faster

Too risky

Smart phones

?


Growing trends attract everyone; however for Microsoft, longer term horizons, requiring larger capital, will filter out & beat constrained competition


Customers

Fit to Microsoft Customer

Fit

to N

oki

a C

ust

om

ers

Geographies

Fit to Microsoft

Fit

to N

oki

a

Channels

Fit to Microsoft Channels

Fit

to N

oki

a C

han

nel

s

Winners

Forget about it


Leveraging Nokia’s user-centered approach, on Microoft’s huge business & consumer user base, through existing channels, in best regions


Focus Avoid

When? longer-term macro trend targets short term ‘sprints’

Where? growing, value add markets,

through owned channels commoditized markets

How? leveraging scale & capital arenas where small can win

What? integrated solutions software + hardware

look beyond smart phones

Who? future business workers more of the same

Strategically recommending that Microsoft pair internal strengths & assets to growing long term external trends, avoiding weaknesses

STRATEGIC INNOVATION EXERCISE – NOAM BERNSTEIN .jpg02-13-26-04-featurephones-smartphones-/idc04/2013http://www.blogcdn.com/www.engadget.com/media/ Innovation Exercise 21

While preparing to capture larger cycle patterns, Microsoft should remember to tactically leverage waning markets, such as non-smart phones, to the fullest

http://www.blogcdn.com/www.engadget.com/media/2013/04/idc-smartphones-featurephones-04-26-13-02.jpg



















To create “own-able” tech platforms & new categories, the best innovation areas cluster large scale HW&SW integration at low cost with global distribution,

Internet of Things Frugal Innovation

Nokia hardware Microsoft Cloud

HW Product & Users Millenials

Augmented Reality ‘Here’ by Nokia

Consumerization of IT Emerging economies

Nokia hardware Business cloud

IT-Net of Business Things Augmented Reality Things Cloud enabled Things


Things

Atoms

Senses

Nokia, ‘Internet of Things’ & ‘Transplantable Tech’ are self-disrupt opportunities; Microsoft can recreate itself – software & hardware with a ‘twist’

STRATEGIC INNOVATION EXERCISE – NOAM BERNSTEIN INNOVATION EXERCISE 24

microsoftnokia - strategic innovation for the newly merged entity - by noam bernstein

Business

roi capital

time opportunity

nokia channels

smart phones

size amp

channels amp

windows phone

assets amp