Precisely one year after GN Netcom’s CEO Toon Bouten presented his three-stage strategy plan, the results have started to materialize. The company lifted its earnings significantly compared to 2006, but GN Netcom’s mobile headset business still needs to improve.
Reengineer, Accelerate and Extend are the key words in the strategy intended to bring GN Netcom back on the road to profitable growth. Two months into 2008 GN Netcom can look back on a year of Reengineering.
Ambitious Reengineering Plan
"We started 2007 with an ambitious reengineering plan, and when I look back on the past 14 months I’m very pleased with the results of the focused and dedicated efforts of each and every one of our GN Netcom employees. Cost cuts, a general sharpening and simplification of processes, new product platforms, and a new supply-chain setup, in which all manufacturing and substantial parts of logistics are being outsourced, are some of the results of the reengineering plan. But we still have a long way to go, before we can move from being a good to an outstanding company," says CEO Toon Bouten.
The new supply chain set up, which is a cornerstone of GN Netcom’s restructuring process, will add flexibility and scalability, particularly to the Mobile headset business, improve customer service and further reduce supply chain costs and working capital.
Good Results in Contact Center and Office
While the contact center and office business produced good results in 2007, GN Netcom’s mobile business still needs to improve.
“The 2007 numbers were not satisfactory for our mobile headset business. We saw a general weakening of the market and we lost some market share in 2007, partly due to a sharp decline in the number of headsets sold to one large mobile phone manufacturer. However, GN Netcom is still the world’s largest provider of headsets to the mobile market with an estimated market share of approximately 20%. Last year, we won many major OEM programs with the three largest handset makers and our headsets were picked up by many of the major operators. Combined with the improved internal set up, this will help us make a major improvement this year,” Toon Bouten concludes.
And there is a sizable market for Bluetooth mobile headsets out there. The global market for Bluetooth-enabled headsets was estimated at 72 million units in 2007 and is expected to grow to 144 million units by 2010 reflecting unit growth of about 25% per annum over the next three years.
Accelerating the Business
Although the reengineering process will continue throughout 2008, GN Netcom will start to accelerate the business in the second half of this year in order to increase both revenues and profits. GN Netcom intends to accelerate growth rates with frequent launches of products featuring innovative design and technology that meet customer demands, and grow the business with existing and new customers without similar growth in cost levels, capital expenditure and working capital.