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Understanding the CompetitionJanuary, 2008
Michael Danke713 940 1063
Page 2
Quick Survey
Does IBM make PCs?- Yes- No
Does the word “Celiac” mean anything to you?- Yes- No
Page 3
Bio
University of Houston – BBA – Marketing Andersen Consulting Grant Thornton (Consulting) Neste Trifinery Petroleum Services University of Chicago – MBA Continental Airlines IBM
- Business Innovation Services e-business Strategy and Design Strategic Intelligence Institute for Business Value
- Business Consulting Services Strategy and Change (Solutions)
- Organizational Design and Effectiveness- Operational Strategy
BCS Strategy – Staff
- Global Business Services GBS Strategy – Staff
- IBM HQ Market Intelligence – Competitive Intelligence
IBM Stock Price date of hire $117.92 IBM Stock Price 1/9/08 $98.31 Surviving the dot-com crash with a job at
a technology company – priceless.
Page 4
Here’s how one company’s marketing function is organized…
All the Market Intelligence groups looks at the evolving market space, just from different perspectives.
SALES MARKETING
Market Data Services and
Analytics
Opportunity Analysis
Market Research
Market Intelligence Practices
Competitive Intelligence
Industry, Service Line
and Geography
Market Intelligence
Page 5
How can Competitive Intelligence be useful?
“Most of his competitors, but especially the Eastern-bloc teams, are known to study tapes of Greg Louganis, who has dominated the sport for the last ten years. He was just sixteen when he won a silver medal in Montreal in 1976 and became the One to Watch. Since then, he has been the One to Beat, and to that end, they fret over the tapes, freeze frame his dives and analyze the parts. But they cannot come up with the impossible sums that judges award Greg Louganis.
“The Soviets and the Chinese seem to have developed programs that teach Louganis techniques to every one of their divers,” says Louganis’s coach, Ron O’Brien. “[The communist countries] have developed an acrobatic, a mechanical copy of Greg. They haven’t been successful at teaching a rhythmic, dancelike quality.”
The Sports Writing Handbook, Chapter 6, page 92 (Fensch)
Greg Louganis diving at the 1984 Olympic Games in Los Angeles.© Focus on Sport/Getty Images
Page 6
Key Intelligence topics involve areas at the core of business – or at least in areas where key decisions are being made
Dif
ficu
lty
of
Qu
esti
on
Easy
Ridiculous
Company-wide Small part of business
Reported Financials
Strategy statements
News in the press or on
the web
Court filings
Public filings (patents)
Price of an acquisition
A list of owned real estate, including
value
Executive personal contact information
Internal win/loss reviews
Terms of Contracts/
Rates
Internal business processes (utilization
calculation)
Apples to apples comparisons when companies are not organized similarly
List of every client, type of work done,
project revenue
How are they going to decide which
direction to pursue in a very narrow market
Level of specificity
Moving up and to the right usually
involves increasing
amount of time and cost
The time and cost of gathering information does not necessarily
equate to strategic
usefulness
Page 7
Most of the job is a pretty straightforward exercise, but…
Taking shortcuts in collecting information could send you to the dark side.
HP/WSJ example Business conduct
guidelines SCIP guidelines
Questions are things like “What is their strategy?” “Who are their customers?” “What are they selling”
Usual deliverables include newsletters, emailed answers to questions, competitor overviews and competitor deep dives (on a topic)
People aren’t real interested in what happened more than 91 days ago – they would rather have you tell them what’s coming next…
…and that’s where analysis comes in
Page 8
How to try and build a business case for a golf tournament
Assignment – try to understand where upcoming asset investment or big deals might be made.
“I know this will be tough, so think outside the box.”
I know they meet with groups of clients Maybe I could go where they are and
hang out at the hotel/bar/Starbucks and observe how careless they might be with business information. (Many execs feel free to make loud cell phone calls or work on a plane, for example)- Annual meeting is over and - Executives were not based in an office, but- They were holding a golf tournament…
“You want to go where?
Page 9
Business Applications
IT Infrastructure
Application Infrastructure
Business Operations
Business Strategy
Client Core Competency
R&DClient Core Competency
OperationsClient Support Activity
Finance FunctionClient Support Activity
Human ResourcesClient Support Activity
Marketing
1940sArthur AndersenAudit and Tax
1950sArthur
AndersenAdministrative
Services
Single Process Automation
1950sArthur
AndersenAdministrative
Services
Single Process Automation
1950sArthur Andersen
Administrative Services
Multiple Process Automation
1970sArthur AndersenAdministrative
Services
Multiple Process AutomationBack Office
1980sArthur Andersen
Management Information ConsultingMRP/ERP
Client Server
1990sAndersen Consulting
Business Integration
1990sAndersen Consulting
Industry Vertical Applications
2000sAccenture
Outsourcing
2000sAccenture
Outsourcing
2000sAccenture
Industry VerticalOutsourcing
2000sAccenture
Client Core CompetencyOutsourcing
2000sAccenture
Outsourcing
What’s Left?
What’s Left?
Earnings review: How Accenture grows
Page 10
23 January 2008(as Michael predicted) Accenture to Acquire Maxamine and Memetrics, Expanding Digital Marketing Sciences Services
NEW YORK; Jan. 23, 2008 – Accenture (NYSE:ACN) has acquired Memetrics Holdings Pty Limited and has agreed to acquire the business of Maxamine Inc., expanding its digital marketing sciences services capabilities. Memetrics and Maxamine are privately held companies that provide testing and optimization services to help companies improve the marketing effectiveness and financial returns from their websites and other digital marketing investments. Terms of the agreements were not disclosed.
Maxamine, founded in 1997, scans websites to identify implementation problems which undermine online marketing performance. Its services provide guidance to help clients improve website optimization, enhance customer experience, and decrease privacy-related and other risks.
Page 11
What do you have for breakfast?
We need to reduce our box size to reduce
our costs!
Operations – Brand – Category – Market Intelligence
We don’t want to look expensive
for our size
It would increase the amount of
product that will fit on the shelf
What about the trend toward
green?
“Reducing our package size by 10% lessens our yearly impact upon the
earth by saving over 700,000 gal. of water,
500,000 KWh of energy and 75 tons of paperboard.”
RESULT: The “EnviroBoxTM”
Page 12
If you understand the business drivers, you can actually draw out a lot of information
Manufacturing throughput Estimates of cycle times Manufacturing efficiency in
terms of energy and water consumption
Rough size and capabilities of suppliers needed
Potential impact of their promotions (when combined with scanner data)
Rough idea of profitability (when combined with commodity costs)
How many boxes of cereal do they sell?Number Unit Notes
2.500 Ounces Weight of Box2.778 Ounces Weight of Box before reduction0.278 Ounces Weight savings per box
75 Tons Total Paperboard Savings2,400,000 Ounces Total Paperboard Savings8,640,000 Boxes Cereal Sold Per Year
How much cereal is that?8,640,000 Boxes Cereal Sold Per Year
10.6 Ounces Cereal per box5,724,000 Pounds Cereal
How much Revenue is that?8,640,000 Boxes Cereal Sold Per Year
3.99$ Dollars Retail Price34,473,600.00$ Dollars Revenue