el modelo delta: tres alternativas de posicionamiento estratégico (arnoldo hax, mit sloan)
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Estrategia DigitalEstrategia DigitalApril 24, 2008April 24, 2008
Arnoldo C. HaxArnoldo C. HaxAlfred P. Sloan Professor of Alfred P. Sloan Professor of
Management EmeritusManagement EmeritusM.I.T.M.I.T.
El ModeloEl Modelo DDELTA:ELTA:
EL MODELO DELTATres alternativas de
posicionamiento estratégico
EL MODELO DELTATres alternativas de
posicionamiento estratégico
Consolidación del Sistema• Economía del Sistema• Dominio del Mercado
• Participación de empresas complementarias
Solución Integral al Cliente• Economía del cliente
• Cooperación• Participación del cliente
Mejor Producto• Economía del producto
• Rivalidad• Participación del producto
…… a a travtravéés s de un de un uso efectivo uso efectivo de la de la
tecnologtecnologííaa
EL TRIANGULOCasos de posicionamiento estratégico
EL TRIANGULOCasos de posicionamiento estratégico
SOLUCIÓN INTEGRAL AL CLIENTE
MEJOR PRODUCTO
CONSOLIDACIÓN DEL SISTEMA
Estándares de propiedad registradaMicrosoft, Intel
Liderazgo en costoSouthwest Airlines,
Nucor
Mercado dominanteeBay, Yellow Pages
Amplitud horizontalFidelity
Canal exclusivorural Wal-Mart
DiferenciaciónSony Wega
Redefir la relación con el clienteSaturn
Integracióncon el cliente
EDS
Propuesta de valor
Segmentación de clientes
Agenda estratégica
Clasificación de clientes
1
23 6 45
Posicionamiento estratégico
Conjunto Integrado de competencias
“From” “To”
Scope
Misión
System Lock-In
Total Customer Solution
Best Product
TraTier 1: Exclusive PartnerTier 2: Strategic/Integrated PartnerTier 3: Project Solution SeekersTier 4: Body Shoppers
Desde la Segmentación de Clientesa la Agenda Estratégica
Desde la Segmentación de Clientesa la Agenda Estratégica
Current Sony VC Competencies and Desired Sony Current Sony VC Competencies and Desired Sony VC CompetenciesVC Competencies
Tier 5: High Quality VC Seeker• Large, middle, small size firms who need “differentiated & best products with very high quality”• These seekers pursue not heavy usage but very high quality & differentiated functions• Wide product line-up range for many affiliated offices• Needs guarantees of connectivity between old VC model & new VC model• Product reputation & brand power necessary
Tier 1: Total Office Solution Seeker• International & large firms, large educational firms who need “total office solution”• Sony could provide all solutions including many kinds of products besides VC products, customized system software, system design with system integrators• Long run service & maintenance for all system• Customized VC products• Very long term relationship
Tier 6: Price Seeker• Large, middle, small size firms who need affordable products• These seekers pursue product price rather than quality• Necessary for wide product line-up range for many affiliated offices
Tier 4: Heavy-Use Seeker• Large, middle, small size firms who need “heavy product usage”• Effective customer service for products rather than system• VC vendor could provide long run product support including software version-up & updated functions• Needs guarantees of connectivity between old VC model & new VC model• Collaboration with potential customers to fix VC specifications
Tier 3: Negotiated Solution Seeker• Large, middle, small size firms, large education firms, & large exhibitions who need “customized solution or products”• VC vendors could provide customized solutions or products including appropriate or customized VC products in each office, customized system software, system design with system integrators.• Long term relationship• Occasional special projects
Ideal Customer
Segmentation
System Lock-In
Total Customer Solutions
Best Product
Tier 2: Total VC Solution Seeker
• International & large firms, large educational firms, & large exhibitions who need “total VC solution”• VC vendors could provide solutions including appropriate VC products in each office, customized system software, system design with system integrators• Long run service & maintenance for all system• Customized VC products• Long term relationship
Competencies of Sony VC BusinessCompetencies of Sony VC Business
Differentiation• Strong brand power• Totally well-balanced product line-up• Advanced Audio & Video technology• Sophisticated product design• Connectivity with other Sony products (I.e. memory stick)• Sophisticated CCD Video camera (All competitors purchase it from Sony)• Time to market• Launch product for 80 countries• Quality (Video, audio, & product itself)• Collaboration with huge potential customers• High R&D spending
Dominant exchange• Patents & dominant manufacturing CCD camera for all competitors’ products
Horizontal breadth• Multiple channels (direct, resellers, distributors, system integrators)• A complete set of product & service offerings with Sony VC, other Sony products, system software & system integration• Complementor development
Low cost• Powerful Sony procurement system• Economies of scale with other Sony consumer products• Efficient supply chain system• High yield manufacturing technology• Experienced electronics technology to reduce components• High development capability to reduce product development time• Experienced quality assurance system
Customer integration• Joint forecasting & planning with suppliers, distributors & resellers• Collaboration with distributors & resellers• Collaboration with System software integrators• Periodic introduction & seminars for customers• Continuous customer support by dedicated web page for customers
Customer engagement• Collaborative product development with potential customers• Event to hear customer needs through periodic promotion events• Sales campaign to sales channels over the world• Special sales promotion to potential large customers
Sony Competencies
System Lock-In
Total Customer Solutions
Best Product
Proprietary standard• Patents
Exclusive Channel• Advantage with regulators of 80 countries through world-wide developed sales channels• Advantage with IETF & IEEE that make specification of video transmitting technology• Offering products, system software & system integration all together will discourage switching• Sales & service channel for 80 countries
Competencies of Competencies of Polycom Polycom VC BusinessVC Business
Differentiation• Strong brand power• Totally well-balanced product line-up• Advanced Audio & Video technology• Sophisticated product design• Connectivity with other Sony products (I.e. memory stick)• Sophisticated CCD Video camera (All competitors purchase it from Sony)• Time to market• Launch product for 80 countries• Quality (Video, audio, & product itself)• Collaboration with huge potential customers• High R&D spending• Outstanding experiences for VC & Audio conference as communication company• Long history dedicating VC business• Sophisticated functions for customer satisfaction• Great connectivity to other products
Dominant exchange• Patents & dominant manufacturing CCD camera for all competitors’ products• Lead to fix next generation’s communication protocol
Horizontal breadth• Multiple channels (direct, resellers, distributors, system integrators)• A complete set of product & service offerings with Sony VC, other Sony products, system software & system integration• Complementor development• Very detailed sales manual book for multiple channels• Detailed comparison chart to compete with Sony & Tandberg• Attractive cash back system Company policy “customer’s satisfaction first”• Annual big event to motivate horizontal players
Low cost• Powerful Sony procurement system• Economies of scale with other Sony consumer products• Efficient supply chain system• High yield manufacturing technology• Experienced electronics technology to reduce components• High development capability to reduce product development time• Experienced quality assurance system
Customer integration• Joint forecasting & planning with suppliers, distributors & resellers• Collaboration with distributors & resellers• Collaboration with System software integrators• Periodic introduction & seminars for customers• Continuous customer support by dedicated web page for customers• Hundreds of employees for sales & customer services• Not product business but “solution business”
Customer engagement• Collaborative product development with potential customers• Event to hear customer needs through periodic promotion events• Sales campaign to sales channels over the world• Special sales promotion to potential large customers• A lot of innovative programs to make good relationship with distribution channels• Company policy “good relationship with customers!”
Proprietary standard• Patents• Communication protocol so that all other competitors should adapt that
Exclusive Channel• Advantage with regulators of 80 countries through world-wide developed sales channels• Advantage with IETF & IEEE that make specification of video transmitting technology• Offering products, system software & system integration all together will discourage switching• Sales & service channel for 80 countries
Best Product
Polycom Competencies
System Lock-In
Total Customer Solutions
Source: Popsi Narasimhan, “Hewlett-Packard Company”, 15.902 research paper, Fall 2005
HP - Viewed Through the Delta Model
hp
Total Customer Solutions
System Lock-In
Best Product
Customer Integration
• Long-term vision
• Exceed customer expectation
• Strong regional, national & growing international presence - doing business in 178 countries
• Community involvement - grants to schools & other institutions, charities, scholars, etc.
• Rise to occasions like the recent Tsunami, Katrina, SE Asian Earthquake, etc. by donating cash & products & by encouraging employees to donate & match their contributions.
Low Cost Pricing
• Consumer goods & even low-end servers, PCs & other systems are priced very low - Dell & HP/Compaq play a see-saw game almost every quarter when it comes to pricing & overall revenue
• Printers are practically given away
• Services & solutions sold used a global delivery model using a combination of in-store, off-store & near-store to offer the best price for customer
Differentiation
• Achieve high sales by offering broad assortment of innovative products, services solutions at relatively low prices
• Offer specific targeted solutions to each customer segment - consumer, enterprise, public-sector
• Focus on catering to regional requirements, e.g.N. American solution offering maybe different than one for Asia-Pacific or Europe.
Dominant Exchange
• Owning the industry’s largest IT Supply Chain havs the ability to “mandate” suppliers to out-perform, set standards, meet other IT needs by challenge/motivation
• Tough bargainer with suppliers/partners
• Play a leading part in many standards-setting bodies (e.g. RFID, EPC Global, W3C, etc.).
Proprietary Channel
• Non-Stop (Tandem) Platform proprietary; e.g. 95% of World Stock exchanges, 2 out of 3 credit card transactions, mobile & telecomm exchanges, public safety 911 systems
• Printers & supplies
• Customers using specialized system flavors like HPUX, Tru 64 and FAX have a lot invested in it & are locked-in.
Reduce Customer Experience
• Total-customer experience is something HP prides itself on & it actively measures this using metrics
• Go to market using the best solution which may be a partner’s product on HP platform
• Create the best customer experience using the best team - one face to the customer & one throat to choke idea
• Demo-days & other shows to help people understand & enjoy the technology coming out of HP Labs
Exclusive Channel
• Sold direct, online, & via technology, software, systems integration & channel partners
Horizontal Breadth
• PDA, PC, Notebook, camera, printer, ink, scanner, server - big & small, storage, software, solutions & services to name a few
• Financial services & leasing options offered for customers in need.,
Source: Popsi Narasimhan, “Hewlett-Packard Company”, 15.902 research paper, Fall 2005
HP - Viewed Through the Delta Model
hp
Total Customer Solutions
System Lock-In
Best Product
Customer Integration
• Long-term vision
• Exceed customer expectation
• Strong regional, national & growing international presence -doing business in 178 countries
• Community involvement - grants to schools & other institutions, charities, scholars, etc.
• Rise to occasions like the recent Tsunami, Katrina, SE Asian Earthquake, etc. by donating cash & products & by encouraging employees to donate & match their contributions.
Low Cost Pricing
• Consumer goods & even low-end servers, PCs & other systems are priced very low - Dell & HP/Compaq play a see-saw game almost every quarter when it comes to pricing & overall revenue
• Printers are practically given away
• Services & solutions sold used a global delivery model using a combination of in-store, off-store & near-store to offer the best price for customer
Differentiation
• Achieve high sales by offering broad assortment of innovative products, services solutions at relatively low prices
• Offer specific targeted solutions to each customer segment - consumer, enterprise, public-sector
• Focus on catering to regional requirements, e.g. N. American solution offering maybe different than one for Asia-Pacific or Europe.
Dominant Exchange
• Owning the industry’s largest IT Supply Chain havs the ability to “mandate” suppliers to out-perform, set standards, meet other IT needs by challenge/motivation
• Tough bargainer with suppliers/partners
• Play a leading part in many standards-setting bodies (e.g. RFID, EPC Global, W3C, etc.).
Proprietary Channel
• Non-Stop (Tandem) Platform proprietary; e.g. 95% of World Stock exchanges, 2 out of 3 credit card transactions, mobile & telecomm exchanges, public safety 911 systems
• Printers & supplies
• Customers using specialized system flavors like HPUX, Tru 64 and FAX have a lot invested in it & are locked-in.
Reduce Customer Experience
• Total-customer experience is something HP prides itself on & it actively measures this using metrics
• Go to market using the best solution which may be a partner’s product on HP platform
• Create the best customer experience using the best team -one face to the customer & one throat to choke idea
• Demo-days & other shows to help people understand & enjoy the technology coming out of HP Labs
Exclusive Channel
• Sold direct, online, & via technology, software, systems integration & channel partners
Horizontal Breadth
• PDA, PC, Notebook, camera, printer, ink, scanner, server -big & small, storage, software, solutions & services to name a few
• Financial services & leasing options offered for customers in need.,
Source: Popsi Narasimhan, “Hewlett-Packard Company”, 15.902 research paper, Fall 2005
HP - Viewed Through the Delta Model
hp
Total Customer Solutions
System Lock-In
Best Product
Customer Integration
• Long-term vision
• Exceed customer expectation
• Strong regional, national & growing international presence -doing business in 178 countries
• Community involvement - grants to schools & other institutions, charities, scholars, etc.
• Rise to occasions like the recent Tsunami, Katrina, SE Asian Earthquake, etc. by donating cash & products & by encouraging employees to donate & match their contributions.
Low Cost Pricing
• Consumer goods & even low-end servers, PCs & other systems are priced very low - Dell & HP/Compaq play a see-saw game almost every quarter when it comes to pricing & overall revenue
• Printers are practically given away
• Services & solutions sold used a global delivery model using a combination of in-store, off-store & near-store to offer the best price for customer
Differentiation
• Achieve high sales by offering broad assortment of innovative products, services solutions at relatively low prices
• Offer specific targeted solutions to each customer segment - consumer, enterprise, public-sector
• Focus on catering to regional requirements, e.g. N. American solution offering maybe different than one for Asia-Pacific or Europe.
Dominant Exchange
• Owning the industry’s largest IT Supply Chain havs the ability to “mandate” suppliers to out-perform, set standards, meet other IT needs by challenge/motivation
• Tough bargainer with suppliers/partners
• Play a leading part in many standards-setting bodies (e.g. RFID, EPC Global, W3C, etc.).
Proprietary Channel
• Non-Stop (Tandem) Platform proprietary; e.g. 95% of World Stock exchanges, 2 out of 3 credit card transactions, mobile & telecomm exchanges, public safety 911 systems
• Printers & supplies
• Customers using specialized system flavors like HPUX, Tru 64 and FAX have a lot invested in it & are locked-in.
Reduce Customer Experience
• Total-customer experience is something HP prides itself on & it actively measures this using metrics
• Go to market using the best solution which may be a partner’s product on HP platform
• Create the best customer experience using the best team -one face to the customer & one throat to choke idea
• Demo-days & other shows to help people understand & enjoy the technology coming out of HP Labs
Exclusive Channel
• Sold direct, online, & via technology, software, systems integration & channel partners
Horizontal Breadth
• PDA, PC, Notebook, camera, printer, ink, scanner, server -big & small, storage, software, solutions & services to name a few
• Financial services & leasing options offered for customers in need.,
Source: Popsi Narasimhan, “Hewlett-Packard Company”, 15.902 research paper, Fall 2005
HP - Viewed Through the Delta Model
hp
Total Customer Solutions
System Lock-In
Best Product
Customer Integration
• Long-term vision
• Exceed customer expectation
• Strong regional, national & growing international presence -doing business in 178 countries
• Community involvement - grants to schools & other institutions, charities, scholars, etc.
• Rise to occasions like the recent Tsunami, Katrina, SE Asian Earthquake, etc. by donating cash & products & by encouraging employees to donate & match their contributions.
Low Cost Pricing
• Consumer goods & even low-end servers, PCs & other systems are priced very low - Dell & HP/Compaq play a see-saw game almost every quarter when it comes to pricing & overall revenue
• Printers are practically given away
• Services & solutions sold used a global delivery model using a combination of in-store, off-store & near-store to offer the best price for customer
Differentiation
• Achieve high sales by offering broad assortment of innovative products, services solutions at relatively low prices
• Offer specific targeted solutions to each customer segment - consumer, enterprise, public-sector
• Focus on catering to regional requirements, e.g. N. American solution offering maybe different than one for Asia-Pacific or Europe.
Dominant Exchange
• Owning the industry’s largest IT Supply Chain havs the ability to “mandate” suppliers to out-perform, set standards, meet other IT needs by challenge/motivation
• Tough bargainer with suppliers/partners
• Play a leading part in many standards-setting bodies (e.g. RFID, EPC Global, W3C, etc.).
Proprietary Channel
• Non-Stop (Tandem) Platform proprietary; e.g. 95% of World Stock exchanges, 2 out of 3 credit card transactions, mobile & telecomm exchanges, public safety 911 systems
• Printers & supplies
• Customers using specialized system flavors like HPUX, Tru 64 and FAX have a lot invested in it & are locked-in.
Reduce Customer Experience
• Total-customer experience is something HP prides itself on & it actively measures this using metrics
• Go to market using the best solution which may be a partner’s product on HP platform
• Create the best customer experience using the best team -one face to the customer & one throat to choke idea
• Demo-days & other shows to help people understand & enjoy the technology coming out of HP Labs
Exclusive Channel
• Sold direct, online, & via technology, software, systems integration & channel partners
Horizontal Breadth
• PDA, PC, Notebook, camera, printer, ink, scanner, server -big & small, storage, software, solutions & services to name a few
• Financial services & leasing options offered for customers in need.,
Source: Popsi Narasimhan, “Hewlett-Packard Company”, 15.902 research paper, Fall 2005
HP - Viewed Through the Delta Model
hp
Total Customer Solutions
System Lock-In
Best Product
Customer Integration
• Long-term vision
• Exceed customer expectation
• Strong regional, national & growing international presence - doing business in 178 countries
• Community involvement - grants to schools & other institutions, charities, scholars, etc.
• Rise to occasions like the recent Tsunami, Katrina, SE Asian Earthquake, etc. by donating cash & products & by encouraging employees to donate & match their contributions.
Low Cost Pricing
• Consumer goods & even low-end servers, PCs & other systems are priced very low - Dell & HP/Compaq play a see-saw game almost every quarter when it comes to pricing & overall revenue
• Printers are practically given away
• Services & solutions sold used a global delivery model using a combination of in-store, off-store & near-store to offer the best price for customer
Differentiation
• Achieve high sales by offering broad assortment of innovative products, services solutions at relatively low prices
• Offer specific targeted solutions to each customer segment - consumer, enterprise, public-sector
• Focus on catering to regional requirements, e.g. N. American solution offering maybe different than one for Asia-Pacific or Europe.
Dominant Exchange
• Owning the industry’s largest IT Supply Chain havs the ability to “mandate” suppliers to out-perform, set standards, meet other IT needs by challenge/motivation
• Tough bargainer with suppliers/partners
• Play a leading part in many standards-setting bodies (e.g. RFID, EPC Global, W3C, etc.).
Proprietary Channel
• Non-Stop (Tandem) Platform proprietary; e.g. 95% of World Stock exchanges, 2 out of 3 credit card transactions, mobile & telecomm exchanges, public safety 911 systems
• Printers & supplies
• Customers using specialized system flavors like HPUX, Tru 64 and FAX have a lot invested in it & are locked-in.
Reduce Customer Experience
• Total-customer experience is something HP prides itself on & it actively measures this using metrics
• Go to market using the best solution which may be a partner’s product on HP platform
• Create the best customer experience using the best team -one face to the customer & one throat to choke idea
• Demo-days & other shows to help people understand & enjoy the technology coming out of HP Labs
Exclusive Channel
• Sold direct, online, & via technology, software, systems integration & channel partners
Horizontal Breadth
• PDA, PC, Notebook, camera, printer, ink, scanner, server -big & small, storage, software, solutions & services to name a few
• Financial services & leasing options offered for customers in need.,
Source: Popsi Narasimhan, “Hewlett-Packard Company”, 15.902 research paper, Fall 2005
HP - Viewed Through the Delta Model
hp
Total Customer Solutions
System Lock-In
Best ProductCustomer Integration
• Long-term vision
• Exceed customer expectation
• Strong regional, national & growing international presence - doing business in 178 countries
• Community involvement - grants to schools & other institutions, charities, scholars, etc.
• Rise to occasions like the recent Tsunami, Katrina, SE Asian Earthquake, etc. by donating cash & products & by encouraging employees to donate & match their contributions.
Low Cost Pricing
• Consumer goods & even low-end servers, PCs & other systems are priced very low - Dell & HP/Compaq play a see-saw game almost every quarter when it comes to pricing & overall revenue
• Printers are practically given away
• Services & solutions sold used a global delivery model using a combination of in-store, off-store & near-store to offer the best price for customer
Differentiation
• Achieve high sales by offering broad assortment of innovative products, services solutions at relatively low prices
• Offer specific targeted solutions to each customer segment - consumer, enterprise, public-sector
• Focus on catering to regional requirements, e.g. N. American solution offering maybe different than one for Asia-Pacific or Europe.
Dominant Exchange
• Owning the industry’s largest IT Supply Chain havs the ability to “mandate” suppliers to out-perform, set standards, meet other IT needs by challenge/motivation
• Tough bargainer with suppliers/partners
• Play a leading part in many standards-setting bodies (e.g. RFID, EPC Global, W3C, etc.).
Proprietary Channel
• Non-Stop (Tandem) Platform proprietary; e.g. 95% of World Stock exchanges, 2 out of 3 credit card transactions, mobile & telecomm exchanges, public safety 911 systems
• Printers & supplies
• Customers using specialized system flavors like HPUX, Tru 64 and FAX have a lot invested in it & are locked-in.
Reduce Customer Experience
• Total-customer experience is something HP prides itselfon & it actively measures this using metrics
• Go to market using the best solution which may be a partner’s product on HP platform
• Create the best customer experience using the best team - one face to the customer & one throat to choke idea
• Demo-days & other shows to help people understand & enjoy the technology coming out of HP Labs
Exclusive Channel
• Sold direct, online, & via technology, software, systems integration & channel partners
Horizontal Breadth
• PDA, PC, Notebook, camera, printer, ink, scanner, server -big & small, storage, software, solutions & services to name a few
• Financial services & leasing options offered for customers in need.,
Source: Popsi Narasimhan, “Hewlett-Packard Company”, 15.902 research paper, Fall 2005
HP - Viewed Through the Delta Model
hp
Total Customer Solutions
System Lock-In
Best Product
Customer Integration
• Long-term vision
• Exceed customer expectation
• Strong regional, national & growing international presence -doing business in 178 countries
• Community involvement - grants to schools & other institutions, charities, scholars, etc.
• Rise to occasions like the recent Tsunami, Katrina, SE Asian Earthquake, etc. by donating cash & products & by encouraging employees to donate & match their contributions.
Low Cost Pricing
• Consumer goods & even low-end servers, PCs & other systems are priced very low - Dell & HP/Compaq play a see-saw game almost every quarter when it comes to pricing & overall revenue
• Printers are practically given away
• Services & solutions sold used a global delivery model using a combination of in-store, off-store & near-store to offer the best price for customer
Differentiation
• Achieve high sales by offering broad assortment of innovative products, services solutions at relatively low prices
• Offer specific targeted solutions to each customer segment - consumer, enterprise, public-sector
• Focus on catering to regional requirements, e.g. N. American solution offering maybe different than one for Asia-Pacific or Europe.
Dominant Exchange
• Owning the industry’s largest IT Supply Chain havs the ability to “mandate” suppliers to out-perform, set standards, meet other IT needs by challenge/motivation
• Tough bargainer with suppliers/partners
• Play a leading part in many standards-setting bodies (e.g. RFID, EPC Global, W3C, etc.).
Proprietary Channel
• Non-Stop (Tandem) Platform proprietary; e.g. 95% of World Stock exchanges, 2 out of 3 credit card transactions, mobile & telecomm exchanges, public safety 911 systems
• Printers & supplies
• Customers using specialized system flavors like HPUX, Tru 64 and FAX have a lot invested in it & are locked-in.
Reduce Customer Experience
• Total-customer experience is something HP prides itself on & it actively measures this using metrics
• Go to market using the best solution which may be a partner’s product on HP platform
• Create the best customer experience using the best team -one face to the customer & one throat to choke idea
• Demo-days & other shows to help people understand & enjoy the technology coming out of HP Labs
Exclusive Channel
• Sold direct, online, & via technology, software, systems integration & channel partners
Horizontal Breadth
• PDA, PC, Notebook, camera, printer, ink, scanner, server - big & small, storage, software, solutions & services to name a few
• Financial services & leasing options offered for customers in need.,
Source: Popsi Narasimhan, “Hewlett-Packard Company”, 15.902 research paper, Fall 2005
HP - Viewed Through the Delta Model
hp
Total Customer Solutions
System Lock-In
Best Product
Customer Integration
• Long-term vision
• Exceed customer expectation
• Strong regional, national & growing international presence -doing business in 178 countries
• Community involvement - grants to schools & other institutions, charities, scholars, etc.
• Rise to occasions like the recent Tsunami, Katrina, SE Asian Earthquake, etc. by donating cash & products & by encouraging employees to donate & match their contributions.
Low Cost Pricing
• Consumer goods & even low-end servers, PCs & other systems are priced very low - Dell & HP/Compaq play a see-saw game almost every quarter when it comes to pricing & overall revenue
• Printers are practically given away
• Services & solutions sold used a global delivery model using a combination of in-store, off-store & near-store to offer the best price for customer
Differentiation
• Achieve high sales by offering broad assortment of innovative products, services solutions at relatively low prices
• Offer specific targeted solutions to each customer segment - consumer, enterprise, public-sector
• Focus on catering to regional requirements, e.g. N. American solution offering maybe different than one for Asia-Pacific or Europe.
Dominant Exchange
• Owning the industry’s largest IT Supply Chain havs the ability to “mandate” suppliers to out-perform, set standards, meet other IT needs by challenge/motivation
• Tough bargainer with suppliers/partners
• Play a leading part in many standards-setting bodies (e.g. RFID, EPC Global, W3C, etc.).
Proprietary Channel
• Non-Stop (Tandem) Platform proprietary; e.g. 95% of World Stock exchanges, 2 out of 3 credit card transactions, mobile & telecomm exchanges, public safety 911 systems
• Printers & supplies
• Customers using specialized system flavors like HPUX, Tru 64 and FAX have a lot invested in it & are locked-in.
Reduce Customer Experience
• Total-customer experience is something HP prides itself on & it actively measures this using metrics
• Go to market using the best solution which may be a partner’s product on HP platform
• Create the best customer experience using the best team -one face to the customer & one throat to choke idea
• Demo-days & other shows to help people understand & enjoy the technology coming out of HP Labs
Exclusive Channel
• Sold direct, online, & via technology, software, systems integration & channel partners
Horizontal Breadth
• PDA, PC, Notebook, camera, printer, ink, scanner, server -big & small, storage, software, solutions & services to name a few
• Financial services & leasing options offered for customers in need.,
Source: Popsi Narasimhan, “Hewlett-Packard Company”, 15.902 research paper, Fall 2005
HP - Viewed Through the Delta Model
hp
Total Customer Solutions
System Lock-In
Best Product
Customer Integration
• Long-term vision
• Exceed customer expectation
• Strong regional, national & growing international presence -doing business in 178 countries
• Community involvement - grants to schools & other institutions, charities, scholars, etc.
• Rise to occasions like the recent Tsunami, Katrina, SE Asian Earthquake, etc. by donating cash & products & by encouraging employees to donate & match their contributions.
Low Cost Pricing
• Consumer goods & even low-end servers, PCs & other systems are priced very low - Dell & HP/Compaq play a see-saw game almost every quarter when it comes to pricing & overall revenue
• Printers are practically given away
• Services & solutions sold used a global delivery model using a combination of in-store, off-store & near-store to offer the best price for customer
Differentiation
• Achieve high sales by offering broad assortment of innovative products, services solutions at relatively low prices
• Offer specific targeted solutions to each customer segment - consumer, enterprise, public-sector
• Focus on catering to regional requirements, e.g. N. American solution offering maybe different than one for Asia-Pacific or Europe.
Dominant Exchange
• Owning the industry’s largest IT Supply Chain havs the ability to “mandate” suppliers to out-perform, set standards, meet other IT needs by challenge/motivation
• Tough bargainer with suppliers/partners
• Play a leading part in many standards-setting bodies (e.g. RFID, EPC Global, W3C, etc.).
Proprietary Channel
• Non-Stop (Tandem) Platform proprietary; e.g. 95% of World Stock exchanges, 2 out of 3 credit card transactions, mobile & telecomm exchanges, public safety 911 systems
• Printers & supplies
• Customers using specialized system flavors like HPUX, Tru 64 and FAX have a lot invested in it & are locked-in.
Reduce Customer Experience
• Total-customer experience is something HP prides itself on & it actively measures this using metrics
• Go to market using the best solution which may be a partner’s product on HP platform
• Create the best customer experience using the best team -one face to the customer & one throat to choke idea
• Demo-days & other shows to help people understand & enjoy the technology coming out of HP Labs
Exclusive Channel
• Sold direct, online, & via technology, software, systems integration & channel partners
Horizontal Breadth
• PDA, PC, Notebook, camera, printer, ink, scanner, server -big & small, storage, software, solutions & services to name a few
• Financial services & leasing options offered for customers in need.,
Technology Partners
Software Partners
SystemIntegration
Partners
Channel Partners
Leveraging the best of the industryPartnerships and alliances
Source: Popsi Narasimhan, “Hewlett-Packard Company”, 15.902 research paper, Fall 2005
Gartner Magic Quadrant - December 2006
Source: Flavio Fomin, “Strategic Analysis of EMC Corporation”, 15.902 research paper, Fall 2007
Source: Fook-Chuen Ow, “The Delta Model Analysis of the Competitiveness of Singapore Inc.”, 15.902 research paper, Fall 2005
The Delta Model: Singapore’s Strategic Positioning
Current: Total Customer Solutions
Future:System Lock-In
Past: Best Product
Redefining Customer Relationship
• High quality human capital
• Entrepreneurship & innovative economy
• Long-term vision
• Competitiveness & flexibility
• World-class legal, regulatory & telecommunications infrastructure
Low Cost of Doing Business
• Low labor & business cost
• Low personal & corporate tax rates
• Avoid fiscal budget deficits
Differentiation - Value-Added Proposition
• Pro-market, pro-competition environment
• Efficient & effective government
• First-class business infrastructure
• Educated & trained labor force
Dominant Exchange
• Comprehensive networks of Free Trade Agreements
• Key node in the global network linked to all major economies
• Gateway into & out of Asia
Proprietary Channel
• International hubs for specific sectors like finance, commerce, trade & R&D
Customer Integration
• Expand international & regional trade networks
• Implement international best practices for accounting & compliance framework
Exclusive Channel
• External ties with major economies
• Network of Free Trade Agreements
• Gateway into & out of Asia
Horizontal Breadth
• Broad & diversified base of economic players
• Twin engines of economic growth in manufacturing & services
1980-1990s
1990-2000s 1960-1980s
2000-2010s
Source: Fook-Chuen Ow, “The Delta Model Analysis of the Competitiveness of Singapore Inc.”, 15.902 research paper, Fall 2005
The Delta Model: Singapore’s Strategic Positioning
Current: Total Customer Solutions
Future:System Lock-In
Past: Best Product
Redefining Customer Relationship
• High quality human capital
• Entrepreneurship & innovative economy
• Long-term vision
• Competitiveness & flexibility
• World-class legal, regulatory & telecommunications infrastructure
Low Cost of Doing Business
• Low labor & business cost
• Low personal & corporate tax rates
• Avoid fiscal budget deficits
Differentiation - Value-Added Proposition
• Pro-market, pro-competition environment
• Efficient & effective government
• First-class business infrastructure
• Educated & trained labor force
Dominant Exchange
• Comprehensive networks of Free Trade Agreements
• Key node in the global network linked to all major economies
• Gateway into & out of Asia
Proprietary Channel
• International hubs for specific sectors like finance, commerce, trade & R&D
Customer Integration
• Expand international & regional trade networks
• Implement international best practices for accounting & compliance framework
Exclusive Channel
• External ties with major economies
• Network of Free Trade Agreements
• Gateway into & out of Asia
Horizontal Breadth
• Broad & diversified base of economic players
• Twin engines of economic growth in manufacturing & services
1980-1990s
1990-2000s 1960-1980s
2000-2010s
Source: Fook-Chuen Ow, “The Delta Model Analysis of the Competitiveness of Singapore Inc.”, 15.902 research paper, Fall 2005
The Delta Model: Singapore’s Strategic Positioning
Current: Total Customer Solutions
Future:System Lock-In
Past: Best Product
Redefining Customer Relationship
• High quality human capital
• Entrepreneurship & innovative economy
• Long-term vision
• Competitiveness & flexibility
• World-class legal, regulatory & telecommunications infrastructure
Low Cost of Doing Business
• Low labor & business cost
• Low personal & corporate tax rates
• Avoid fiscal budget deficits
Differentiation - Value-Added Proposition
• Pro-market, pro-competition environment
• Efficient & effective government
• First-class business infrastructure
• Educated & trained labor force
Dominant Exchange
• Comprehensive networks of Free Trade Agreements
• Key node in the global network linked to all major economies
• Gateway into & out of Asia
Proprietary Channel
• International hubs for specific sectors like finance, commerce, trade & R&D
Customer Integration
• Expand international & regional trade networks
• Implement international best practices for accounting & compliance framework
Exclusive Channel
• External ties with major economies
• Network of Free Trade Agreements
• Gateway into & out of Asia
Horizontal Breadth
• Broad & diversified base of economic players
• Twin engines of economic growth in manufacturing & services
1980-1990s
1990-2000s 1960-1980s
2000-2010s
Source: Fook-Chuen Ow, “The Delta Model Analysis of the Competitiveness of Singapore Inc.”, 15.902 research paper, Fall 2005
The Delta Model: Singapore’s Strategic Positioning
Current: Total Customer Solutions
Future:System Lock-In
Past: Best Product
Redefining Customer Relationship
• High quality human capital
• Entrepreneurship & innovative economy
• Long-term vision
• Competitiveness & flexibility
• World-class legal, regulatory & telecommunications infrastructure
Low Cost of Doing Business
• Low labor & business cost
• Low personal & corporate tax rates
• Avoid fiscal budget deficits
Differentiation - Value-Added Proposition
• Pro-market, pro-competition environment
• Efficient & effective government
• First-class business infrastructure
• Educated & trained labor force
Dominant Exchange
• Comprehensive networks of Free Trade Agreements
• Key node in the global network linked to all major economies
• Gateway into & out of Asia
Proprietary Channel
• International hubs for specific sectors like finance, commerce, trade & R&D
Customer Integration
• Expand international & regional trade networks
• Implement international best practices for accounting & compliance framework
Exclusive Channel
• External ties with major economies
• Network of Free Trade Agreements
• Gateway into & out of Asia
Horizontal Breadth
• Broad & diversified base of economic players
• Twin engines of economic growth in manufacturing & services
1980-1990s
1990-2000s 1960-1980s
2000-2010s
Source: Fook-Chuen Ow, “The Delta Model Analysis of the Competitiveness of Singapore Inc.”, 15.902 research paper, Fall 2005
The Delta Model: Singapore’s Strategic Positioning
Current: Total Customer Solutions
Future:System Lock-In
Past: Best Product
Redefining Customer Relationship
• High quality human capital
• Entrepreneurship & innovative economy
• Long-term vision
• Competitiveness & flexibility
• World-class legal, regulatory & telecommunications infrastructure
Low Cost of Doing Business
• Low labor & business cost
• Low personal & corporate tax rates
• Avoid fiscal budget deficits
Differentiation - Value-Added Proposition
• Pro-market, pro-competition environment
• Efficient & effective government
• First-class business infrastructure
• Educated & trained labor force
Dominant Exchange
• Comprehensive networks of Free Trade Agreements
• Key node in the global network linked to all major economies
• Gateway into & out of Asia
Proprietary Channel
• International hubs for specific sectors like finance, commerce, trade & R&D
Customer Integration
• Expand international & regional trade networks
• Implement international best practices for accounting & compliance framework
Exclusive Channel
• External ties with major economies
• Network of Free Trade Agreements
• Gateway into & out of Asia
Horizontal Breadth
• Broad & diversified base of economic players
• Twin engines of economic growth in manufacturing & services
1980-1990s
1990-2000s 1960-1980s
2000-2010s
Source: Fook-Chuen Ow, “The Delta Model Analysis of the Competitiveness of Singapore Inc.”, 15.902 research paper, Fall 2005
The Delta Model: Singapore’s Strategic Positioning
Current: Total Customer Solutions
Future:System Lock-In
Past: Best Product
Redefining Customer Relationship
• High quality human capital
• Entrepreneurship & innovative economy
• Long-term vision
• Competitiveness & flexibility
• World-class legal, regulatory & telecommunications infrastructure
Low Cost of Doing Business
• Low labor & business cost
• Low personal & corporate tax rates
• Avoid fiscal budget deficits
Differentiation - Value-Added Proposition
• Pro-market, pro-competition environment
• Efficient & effective government
• First-class business infrastructure
• Educated & trained labor force
Dominant Exchange
• Comprehensive networks of Free Trade Agreements
• Key node in the global network linked to all major economies
• Gateway into & out of Asia
Proprietary Channel
• International hubs for specific sectors like finance, commerce, trade & R&D
Customer Integration
• Expand international & regional trade networks
• Implement international best practices for accounting & compliance framework
Exclusive Channel
• External ties with major economies
• Network of Free Trade Agreements
• Gateway into & out of Asia
Horizontal Breadth
• Broad & diversified base of economic players
• Twin engines of economic growth in manufacturing & services
1980-1990s
1990-2000s 1960-1980s
2000-2010s
Source: Fook-Chuen Ow, “The Delta Model Analysis of the Competitiveness of Singapore Inc.”, 15.902 research paper, Fall 2005
The Delta Model: Singapore’s Strategic Positioning
Current: Total Customer Solutions
Future:System Lock-In
Past: Best Product
Redefining Customer Relationship
• High quality human capital
• Entrepreneurship & innovative economy
• Long-term vision
• Competitiveness & flexibility
• World-class legal, regulatory & telecommunications infrastructure
Low Cost of Doing Business
• Low labor & business cost
• Low personal & corporate tax rates
• Avoid fiscal budget deficits
Differentiation - Value-Added Proposition
• Pro-market, pro-competition environment
• Efficient & effective government
• First-class business infrastructure
• Educated & trained labor force
Dominant Exchange
• Comprehensive networks of Free Trade Agreements
• Key node in the global network linked to all major economies
• Gateway into & out of Asia
Proprietary Channel
• International hubs for specific sectors like finance, commerce, trade & R&D
Customer Integration
• Expand international & regional trade networks
• Implement international best practices for accounting & compliance framework
Exclusive Channel
• External ties with major economies
• Network of Free Trade Agreements
• Gateway into & out of Asia
Horizontal Breadth
• Broad & diversified base of economic players
• Twin engines of economic growth in manufacturing & services
1980-1990s
1990-2000s 1960-1980s
2000-2010s
Source: Fook-Chuen Ow, “The Delta Model Analysis of the Competitiveness of Singapore Inc.”, 15.902 research paper, Fall 2005
The Delta Model: Singapore’s Strategic Positioning
Current: Total Customer Solutions
Future:System Lock-In
Past: Best Product
Redefining Customer Relationship
• High quality human capital
• Entrepreneurship & innovative economy
• Long-term vision
• Competitiveness & flexibility
• World-class legal, regulatory & telecommunications infrastructure
Low Cost of Doing Business
• Low labor & business cost
• Low personal & corporate tax rates
• Avoid fiscal budget deficits
Differentiation - Value-Added Proposition
• Pro-market, pro-competition environment
• Efficient & effective government
• First-class business infrastructure
• Educated & trained labor force
Dominant Exchange
• Comprehensive networks of Free Trade Agreements
• Key node in the global network linked to all major economies
• Gateway into & out of Asia
Proprietary Channel
• International hubs for specific sectors like finance, commerce, trade & R&D
Customer Integration
• Expand international & regional trade networks
• Implement international best practices for accounting & compliance framework
Exclusive Channel
• External ties with major economies
• Network of Free Trade Agreements
• Gateway into & out of Asia
Horizontal Breadth
• Broad & diversified base of economic players
• Twin engines of economic growth in manufacturing & services
1980-1990s
1990-2000s 1960-1980s
2000-2010s
Source: Fook-Chuen Ow, “The Delta Model Analysis of the Competitiveness of Singapore Inc.”, 15.902 research paper, Fall 2005
The Delta Model: Singapore’s Strategic Positioning
Current: Total Customer Solutions
Future:System Lock-In
Past: Best Product
Redefining Customer Relationship
• High quality human capital
• Entrepreneurship & innovative economy
• Long-term vision
• Competitiveness & flexibility
• World-class legal, regulatory & telecommunications infrastructure
Low Cost of Doing Business
• Low labor & business cost
• Low personal & corporate tax rates
• Avoid fiscal budget deficits
Differentiation - Value-Added Proposition
• Pro-market, pro-competition environment
• Efficient & effective government
• First-class business infrastructure
• Educated & trained labor force
Dominant Exchange
• Comprehensive networks of Free Trade Agreements
• Key node in the global network linked to all major economies
• Gateway into & out of Asia
Proprietary Channel
• International hubs for specific sectors like finance, commerce, trade & R&D
Customer Integration
• Expand international & regional trade networks
• Implement international best practices for accounting & compliance framework
Exclusive Channel
• External ties with major economies
• Network of Free Trade Agreements
• Gateway into & out of Asia
Horizontal Breadth
• Broad & diversified base of economic players
• Twin engines of economic growth in manufacturing & services
1980-1990s
1990-2000s 1960-1980s
2000-2010s
Putting it all Together -
How to capture the critical tasks of strategy
Value Proposition
Customer SegmentStrategic Thrusts
Customer Classification
1
23 6 45
Strategic Positioning
Bundle of Competencies
“From” “To”
Scope
Mission Statement
System Lock-In
Total Customer Solution
Best Product
From the Customer Segmentation to Strategic Agenda
TraTier 1: Exclusive Partner
Tier 2: Strategic/Integrated Partner
Tier 3: Project Solution Seekers
Tier 4: Body Shoppers
DMK: DMK: Outsourcing Information Technology from ChinaOutsourcing Information Technology from China
Task #1: Customer SegmentationTask #1: Customer Segmentation
Customer Segmentation
System Lock-In
Total Customer Solutions
Best Product
Tier 4: Body Shoppers• Transactional relationship to provide
supplemental staff without much end -client relationship
• Existing customers: IBM
Tier 3: Project Solution Seekers• Full project ownership and solution
delivery responsibility without established (but potential) for long-term client relationship
• Existing customer: Toyota, Honda, US prospects, Dept. of Transportation China
Tier 1: Exclusive Partner• Japan based orgs requiring
outsourcing of IBM mainframe applications
• Opportunity for customer lock-in• IBM JV• Existing customers: GE Japan, JBCC,
AIG
Tier 2: Strategic/Integrated Partner• Long term symbiotic partnership with
high value added• Existing customers: GE China, GE US,
Kawasaki, Unisys
Customer Segmentation
1. Combination of deep knowledge of mainframe applications and deep understanding of Japanese culture (not available to other companies in China.
2. Very high level of quality (only CMM level 5 and Six-Sigma company in China) combined with all the other cost advantages available to Chinese companies not available anywhere else in the world.
Unique Competencies
IBM (as an h/2 and s/2 partner), existing clients, AccentureComplementors
Japanese Corporations, Japanese Government organizationsEnd Users
Direct, Referrals from highly satisfied existing clientsChannels
Japanese Corporations in Financial Services, Insurance, etc. industries
Customer
24x7 Maintenance of mission-critical mainframe legacy applications. Application extension through analysis, design and development of new, integrated modules.
Services
Critical partner to client providing highly integrated, customerspecific, high-value added turnkey solutions for legacy mainframe applications in Japanese market
Products
DescriptionCustomer Dimension
Business Dimension for Tier 1 - “Exclusive Partner”
• Value gained by customer: Superior ROI, improved time-to-market, Security, Resource stability
• Value gained by DMK: Exclusive long-term relationship, higher margins, predictable revenue
• Value shared by both: Shared IP, shared learning, shared risk
Value Appropriation
• Dedicated client-focused team immersed in all aspects of client’s culture
• Network integration to seamlessly extend client environment• Open communication of all relevant information on both sides• Executive sponsor, CEO oversight, an full corporate reach• CMM and Six-Sigma delivery methodologies for delivery• Value added reselling of hardware and software for one-stop-
shopping
Value Delivery Systems
Seamless extension of Client team with integrated culture, skilled technologists with deep understanding of clients business.
Experiences
DescriptionValue Proposition Element
Customer SegmentationValue Proposition for Tier 1 - “Exclusive Partner”
Customer SegmentationBusiness Dimension for Tier 2 - “Strategic Partner”
1. One of 12 exclusive outsourcing vendors or GE2. Six-Sigma/CMM level-5 quality combined with China’s cost
advantage.
Unique Competencies
Other GE partners, IBM, other software partners, AccentureComplementors
N/AEnd Users
DirectChannels
GE US, GE China, Kawasaki, UnisysCustomer
• T&M and Fixed price application development across multi-phase projects• Joint application development enabled through deep understanding of client culture and methodology• Dedicated retained teams as extension of clients IT organization
Services
Long-term relationship with client to provide customized and integrated solutions across multiple business units
Products
DescriptionCustomer Dimension
• Value gained by customer: Superior ROI, improved time-to-market, Security, Resource stability, Shared risk, Continuous improvement
• Value gained by DMK: Access to client network as sales channel, credibility, learning
• Value shared by both: Co-development of shared standards and processes
Value Appropriation
• Dedicated client-focused teams fully rained in clients methodologies and processes
• Joint development plans• Cross-training and periodic two-way knowledge transfer• Business Relationship Manager, CEO oversight and full corporate
reach
Value Delivery Systems
Integrated teams of skilled technologists with deep understanding of client’s business
Experiences
DescriptionValue Proposition Element
Customer SegmentationValue Proposition for Tier 2 - “Strategic Partner”
Customer SegmentationBusiness Dimension for Tier 3 - “Project Solution
Seekers”
Six-Sigma/CMM level-5 quality combined with China’s cost advantage.
Unique Competencies
IBM, GE, other software partners, AccentureComplementors
N/AEnd Users
• Direct• Consulting partners such as IBM• Strategic partners such as GE
Channels
Toyota, Honda, Department of Transportation China, US prospectsCustomer
T&M and Fixed price application development of discrete projectsServices
Individual project solutions without committed long-term relationship
Products
DescriptionCustomer Dimension
• Value gained by customer: Experimentation , learning, flexibility, reduced time-to-market, high quality, ROI
• Value gained by DMK: Opportunity for long-term relationship, ROI, learning
• Value shared by both: Shared learning in business domain and new technology
Value Appropriation
• Structured processes and teams with high quality of performance• Ability to quickly ramp-up on clients business and culture• Process for seamless transition at end of project• Dedicated project team manager with executive oversight
Value Delivery Systems
End-end-end delivery of a project with high quality and competitive price
Experiences
DescriptionValue Proposition Element
Customer SegmentationValue Proposition for Tier 3 - “Project Solution
Seekers”
Customer SegmentationBusiness Dimension for Tier 4 - “Body Shoppers”
1. Consulting partnerships2. Technology skill differentiation
Unique Competencies
N/AComplementors
CorporationsEnd Users
• Direct• Consulting partners such as IBM
Channels
IBM Japan, NECCustomer
• T&M and retained resources for fixed time durations• Provide specific technology development skills on projects
Services
Individual resources to supplement existing project teams and fill skills gaps (transactional)
Products
DescriptionCustomer Dimension
• Value gained by customer: Resources of demand and skills on demand
• Value gained by DMK: Opportunity to up-sell, learning, improved bonding
• Value shared by both: Exchange of skills
Value Appropriation
• Strong bench that can be tapped on demand• Mix of skills and expertise
Value Delivery Systems
Supplement team with individual resources and fill gaps with skill expertise
Experiences
DescriptionValue Proposition Element
Customer SegmentationValue Proposition for Tier 4 - “Body Shoppers”
Task #2: Firm as a Bundle ofTask #2: Firm as a Bundle ofCompetenciesCompetencies
DMK: DMK: Outsourcing Information Technology from ChinaOutsourcing Information Technology from China
Bundle of competencies analysis (current)
Low Cost1. Wage differential w.
Japan, US, EU andIndia
2. Large pool of skill inarea
3. Experience leveragingwork loads andresources profitably
Differentiation1. Japanese speaking
personnel2. Compatibility with
customer’s culture3. IBM Mainframe expertise4. Six-Sigma, CMM5
Redefining Experience1. Processes and
expertise at end-to-end projects
Customer Integration1. Dedicated teams2. Experience in
outsourcing3. IBM JV
Horizontal Breadth1. Mainframe & newer
languages expertise2. Multiple industry
verticals3. System development,
testing and maintenance
Exclusive Channel1. One of few firms with
low cost mainframeexpertise (customer’s low entry barriers)
2. High switching costs forfully integrated clients (customer’s high exit barriers)
Dominant Exchange1. No specific competence
that creates strong brokerage position
Systems Lock-In1. No specific competence
that creates industry standards
Bundle of competencies analysis (desired)
Low Cost
Differentiation1. English, western forms
Redefining Experience1. Integration with US,
EU IS providers
Customer Integration1. Recruit teams that can
easily integrate with customers across countries
Horizontal Breadth1. System design and
Architecture expertise2. Consulting expertise
Exclusive Channel
Dominant Exchange1. Opportunity to
create dominant exchange for Tier 1 customers
Systems Lock-In
Bundle of competencies analysisLow Cost (location specific)
• Chinese wages are not only below those of developed countries where DMK’s clients reside but also below India.• Over 100.000 technology and computer sciences graduates per year in Dalian make this region a contender for the long term. Also capacity for rapid operation upscaling
Differentiation (location specific)
• Large population (old immigrants from Japan) that can speak and are familiar with the social and business manners of that country
Low Cost (firm specific)
• Expertise in managing sudden changes in demand and supply profitably
Differentiation (firm specific)
• IBM mainframe expertise that comes from core team acquired when a Chinese bank was dismantled.• Six sigma certification and first company in China to get CMM5 certification
Bundle of competencies analysis
Redefining Customer Experience
• DMK has developed quite a remarkable level of expertise at carrying out end-to-end projects with smooth transition at end of project and tight cost management
Customer Integration
• Due to its expertise in Mainframe systems DMK has been able to integrate some of their customers’ key operations with its own
• Outsourcing from mainframe clients has also allowed DMK develop customer integration expertise that are transferable to other industries, functions and newer technologies
Horizontal Breath
• DMK’s strength in mainframes is complemented with expertise in newer programming platforms
• DMK is particularly strong at the development, testing and maintenance end of projects; developing design, architecture and consulting expertise is one of its challenges
• DMK business strengths lie in the financial and insurance sectors although it is slowly developing expertise in other verticals
Bundle of competencies analysis
Exclusive Channel
• DMK has been capable to develop some high barriers of entry for its competitors due to the limited amount of expertise available in mainframe systems at relatively low costs
• As DMK has integrated with its “main partners”, it has also created high barriers of entry for its competitors due to the high costs its clients would incur if they switched IS suppliers. These costs stem, mainly, from the highly tacit knowledge about the clients operations acquired through continuous interaction
Dominant Exchange
• DMK should pursue a dominant exchange position with selected Tier 1 customers
• One such position might be achieved if DMK developed strong coordination expertise between sub-contractors or specialists in China and IS firms or final customers in more developed markets
Systems Lock In
• DMK has not developed any industry standard that allows for a systems lock-in position
Task #3: The Mission StatementTask #3: The Mission Statement
DMK: DMK: Outsourcing Information Technology from ChinaOutsourcing Information Technology from China
DMK - Building the Outsourcing Model of the Future
• Analyzing, designing, developing, deploying, and maintaining software systems and solutions.
• Delivering the highest quality of service and unparalleled value
• Integrating seamlessly with complementary local service providers
• Servicing large and mid-sized corporations, government departments and non-profit organizations
• Through experienced, passionate and hard-working associates driven to provide outstanding service
• Focusing first on Japan, China and US, and expanding next into Europe and Latin American markets
Become the #1 provider of Business Process Outsourcing and IT Services in China:
The Transformation of DMKThe Transformation of DMK
1. Ability to build teams that can integrate seamlessly to form extensions of other service organizations2. Develop familiarity and comfort in business/professional relationships with other cultures based on geographic expansions3. Develop strength in technical design and knowledge of specific business domains for solutions development
1. High maturity in Software development process -First company to obtain SEI CMM level 5 certification in China.2. Six-Sigma certified project and operations managers to ensure data-driven analysis and predictability.3. Low cost of China-based delivery4. Japanese language and cultural strength
Unique Competencies
1. Horizontal Application frameworks such as Portal toolkits, Content Management toolkits, etc.2. Solutions frameworks such as wealth management solutions for financial services, employee portals as HR solutions, etc. that leverage competencies/expertise of strategic and exclusive partners
Technology base such as J2EE framework, Microsoft.NET framework, etc. for rapid code development
Product Scope
Integrated service that captures the entire value chain through strong collaboration with complementors at the high-end of the software services value chain
Lower end of software services value chain: Application development, system integration, system conversion/migration, maintenance and support
Service Scope
U.S. and U.K. expand into countries where language of business is non-English and where cost of IT services is higher than China. (Indian firms do not have language advantage while China-based firms have significant cost advantage.)
Japan and China with limited presence in the U.S.Geographical Scope
Business Consulting, IT Strategy/Architecture consulting firmsHardware and software product companiesComplementor Scope
Exclusive offshore service delivery partner-ships that allow white labeling of DMK services
Direct, Joint VentureChannel Scope
Expand to include mid-sized corporations, State and Federal government departments, non-profit organization
Large Corporations, Government departments in ChinaEnd-User Scope
Expand to include Service providers at the high-end of the software services value chain.
Primarily large corporations, Government departments of China
Customer Scope
FutureNow
Task #4: Strategic AgendaTask #4: Strategic Agenda
DMK: DMK: Outsourcing Information Technology from ChinaOutsourcing Information Technology from China
Strategic Agenda Organizational Units
Strategic Thrusts CEO
CFO
RP
US
RP
Chi
na
RP
Japa
n
VP O
pera
tions
VP H
R
VP S
ales
VP M
ktng
Performance Build Internal Capabilities
1 Invest in people, train and motivate. Hire outstanding talent. Develop strong technical design capabilities. 2 2 2 1 1 2 OE Attrition, # of recruits, per
2 Expand nationally leveraging government programs to develop global delivery centers throughout China. 1 2 1 1 2 2 2 OE
Growth in GDC, # of empprofit margin
3 W ork with exclusive channel partners to develop horizontal frameworks (portals, content/doc management) and industry specific solution sets (energy, publishing, financial serv ices) for rapid development. 1 2 2 2 1 2 1 I
Decrease in project execuin client satisfaction, increcompetitiveness
Solidify Core Markets4 Dominate IBM mainframe outsourcing market in Japan through
aggressing sales and marketing programs. 2 1 2 2 1 1 CT Increase in profitable mar
5 Strengthen strategic relationships (e.g. IBM, GE, Kawasaki, Unisys) through deep customer understanding/integration and continuous improvement. 1 2 1 1 1 2 OE
Increase in client satisfacsize of relationship and p
Build US market6 Develop strong direct-marketing program to target the intermediary
serv ice provider channel. 2 2 1 2 2 1 CTHigh quality sales leads inconsulting and IT service
7 Actively pursue US based Consulting/high-end IT Serv ice firms to become their exclusive prov ider of design, development, & maintenance serv ices 2 1 2 1 2 CT
Increase in US market sh# of exclusive partners an
8 Develop an engagement program with processes to ensure long-term, successful integration of offshore DMK team with local serv ice firm. 1 1 2 2 I
Client satisfaction, increaprofitability of client
Expand to other markets9 Expand to UK and test EU (Germany, France, Italy) using an
intermediary partnership network sim ilar to US-strategy. 1 1 2 2 1 1 2 BIncrease in UK market shpartners/projects
10 Enter and test the Latin American market (Brazil, Mexico, Chille) also through an intermediary partnership network. 1 1 2 2 1 1 2 B
Targeted relationships/prgeographies
Bus
ines
ess
Proc
esse
s
Strategic Agenda: Quality Tests
The agenda extends across all of DMK’s services, geographies and market segments including customers, end users, channels and complementors
Comprehensiveness
No material vulnerabilities have been identified at this time. Aligning execution with this strategic agenda will be critical to the success of DMK.
Vulnerability
The mission combined with clear strategic thrust energizes the organization with a common set of goals and flexibility to innovate and grow.
Motivation
Milestones established throughout the process allow for continuous monitoring and change in strategy if and as required.
Monitoring and Control
Performance measures for each thrust provides achievable but stretch goals for the organization.
Stretch
DescriptionDimension
top related