GN Netcom

Group 3
Introduction

GN Netcom is a leading global

specialist in the development,
production and marketing of headsets
for professional and consumer
markets.
History

Great Northern Telegraph’s primary

business was the construction and operation
of international telegraph networks.

GN Netcom dealt with the following

products:

◦ Headsets with microphones

◦ Amplifiers used in offices, call centers
◦ Headsets produced for consumers –
mobile phones in cars
Significant transitions

GN Danavox, the sister company of GN Great

Nordic acquired Resound Corporation and Beltone
electronics in 1999.

In 2000, 50 Danish employees were laid off due

to the shift in the production location.

Italso shifted its productions from Austria to

China.

In 2000, the increase in employment was marked

from 100 to 300 and relocation of 70%
production.
Significant transitions

The company was formerly known as GN

NetTest issued an IPO in 2001

It founded itself as NetTest in 2002 and

is headquartered in Brondby, Denmark
with additional offices in the United
States, China, France, Germany, Italy,
Singapore, Spain, and the United
Kingdom.
Significant transitions

The acquisition of UNEX in New

Hampshire and ACS in San Jose,
California.

The separate brands were maintained

while the operations were integrated.

The product was customized for the

European and North American markets.
Market Position in 2000

The global market leader was Platronics

followed by GN Netcom.

Afterthe acquisition of Hello Direct, GN

Netcom was estimated to hold around
25% of the global market.

In 2001, Platronics and GN Netcom

together controlled a total of 80 – 90% of
the worldwide market for headsets. This
resulted in a Duopolistic market.
Market Position in 2000

In an effort to establish a strong position

in Asia, GN Netcom kept it headquarters
in Hong Kong to coordinate Pacific
activities.

Sales in China had been growing at the

rate of 45%
GN Netcom Global Operations

GN Netcom wanted to diversify in the Chinese market

by establishing contact with many sub contractors in
Beijing and GN Resound.

The main objective was to reduce the production

costs.

The American market was not compatible to the

European Markets. GN Netcom maintained both UNEX
and ACS product in addition to the existing product
lines in North America.

GN Netcom’s main production in North America was

based in Nashua, New Hampshire. They had
outsourced to subcontractors in Guaungdong and four
original equipment manufacturers.
The Competitor

GN Netcom faced competition from

Plantronics.

Plantronics, Inc. introduced the first

lightweight communications headset.
New Challenges

GN needed to establish its own independent sales

network in China

GN Resound relocated more production to Xiamen

and China and closed facilities in Denmark and
Austria. This created a need to further expand
capacity in China.

NeilsChristianen succeeded Christian Tillisch as

CEO of GN Netcom. He had a total work
experience of 8 years before he became the CEO.
New Challenges

Christianenbrought a new management team to

GN which advocated strategy of continuous
improvement across the organization.

The various JV’s and acquisitions made by the

firm had to be properly integrated.

GN Netcom had to address its cost of its

operations with production in relative high wage
countries.

The geographical location of the company’s

distribution centers were not well located.
Questions