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DN's method for companies to develop new products for emerging markets

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  • 1. 2011 September EUFrederick RickmannEMERGINGMARKETS

2. Emerging Markets Welcome to a new program which is created to let companies continue with rapid global growth in a time of recession in western markets and in Japan. The focus of the program is to allow your company to create products and services better suited to the societies in the world where annual growth is still in or around double figures. DN is an international design and innovation company with offices in Denmark and Taiwan. From this global insight in design and strategy, we have created this program for major corporations to continue growth and success. 3. What you get from Charactistic of these markets is that they needproducts and services which are quite different the programfrom the mainstream ones developed for theUS and EU.There is also a corporate logic in harnessingthe dynamic of these markets where there isample space for your company to thrive andcontinue its success even when traditionalmarkets are in stagnation.In essence the program consists of:- Research in your new target markets- Re-innovation of products and services- Definition and specification- Co-development with your inhouse teams- Implementation and Launch 4. How it works case 1 Over the past decade, your products haveprobably been based on the countries of thedeveloped world, their standards and practices.These are not always the right ingredients foremerging economies. By redefining productsinnovatively, a new generation of possibilitiesarises. The Tata Nano was created to make a car affordable to people who had never owned one before especially in India, Tatas home market. 5. Tata Nano case 1 The logic of Emerging Market innovation is that normal product development is turned partly on its head. Market volume and sales price are defined first before product content.Sales Price 2000 US $ Good design is when you cant take more awaySome of the Nano designs many cost-reducinginnovations. 3000 US $The Nanos boot is only accessible from insidethe car, as the rear hatch does not open.One windscreen wiper instead 2No power steering3 nuts on the wheels instead of the usual 44000 US $Only one wing mirrorNo radio or CD player The Tata Nanos standard sales price inNo airbags in base modelIndia is 2,900 US $ in dec. 2010623cc engine has only 2 cylinders 5000 US $No air conditioning in base model The European version costs 6,000 US $The cars exterior was designed in Italy 6000 US $Data source: 300 m cars400 m cars 500 m carsA.T.Kearneys 6. DNs designs get B2B for the Chinese market B2B Electronics Hand-held industrial computers are developedin a competitive market where features rather Case 2 than actual user needs set the agenda. Byaddressing actual needs , costs can be cut toabout 50% and the market increased 3 fold.Western companies in US and Europe are oftenOne of Motorolas hand-heldmarket leaders and compete successfully bybarcode scannersusing advanced features to distance themselvesfrom Asian competition. Asian companies have atendency to follow the market leaders ratherthan carrying out original research usingvolume production as a price competitive factor.Markets in India, ASEAN and China of abouttriple the present size exist for re-thought handheld computersB2B also means Back to Basics 7. Netbooks case 3Netbook computers are an ideal example of design for Emerging Markets. Originally introduced by Asus this type of no frills computing had sales of 0.4 m in 2007, 35 m in 2009 and forcasts over 100 m by 2012The One Laptop Per Child [OLPC] non-profitproject was a similar exercise in creating a basiccomputer for emerging nations, but from the topdown. Originally set at 100 US $ per unit, theproject never reached production on a massscale and the price level remained about 200US $,Netbook computers reached the same pricelevels quicker giving the opportunity forcomputing to a wide range of societies.Due to the low prices, netbooks are also popularin developed countries 8. Achieving low prices. 1 Research what the users really need atthe most fundamental level.DNs 8 Principles 2 Get rid of features which are not needed.[Ignore what competitors do and beconstructively critical of western practice]3 Use mass production and high volumesto reduce prices even more and expandthe potential of the market4 Export to several markets concurrentlyto maximise volumes and reduce prices 9. DNs 8 Principles 5 Use market volume as the target.Reduce production costs to an extremelevel to suit the market but keep healthymargins.6 Use the highest hi-tech where costsallow. New hi tech is usually cheaper thanold low tech. In emerging economies awhole generation of technology can bejumped over.7 Get the cultural content right butmake it trendy and status enhancing8 Maximise demand through designoriginality and innovative simplicity 10. What you also get As mentioned with netbooks the developedmarkets are also hungry for innovative low costfrom the programproducts. So by opening up Emerging Markets,with low cost solutions, the developedcountries in the West also respond with interest and appealing market growth.The program is not only centred on corporatewell-being. Emerging societies are by theirdefinition emerging from poverty and oftenfrom poor social and economic organisation.Ethical trading standards and care for theplanet from your company go hand in hand withprogress in these communities.In addition, the responsible governance of yourown company has a positive knock-on effect inyour own society and local region throughstable employment and engaged staff. 11. A unique opportunity The demand in emerging nations for responsible no-frills products is large. for EuropeanSophisticated, intelligent solutions are sought when the price is right. European and Scandi- companies to enternavian values are greatly recognised and if these can be combined with attention to the new markets needs and economics of the new markets then significant growth can be achieved In these markets , where many products and service are being initiated for the first time to millions of consumers, there is the obvious opportunity to introduce new solutions. This is the chance now for also medium-sized companies to rapidly establish markets with their own new presence. For more inspiration on this aspect contact DN Group. See the last page. 12. Who on earth is DN? DN Group is an international design andinnovation consultancy . Some recent DN Clients From our offices in Denmark and Taiwan wehelp major international clients as well as Schneider Electriclocal start-up companies to innovate and to ZyXELgrow. By building innovative business strategies Procare Internationalwith companies like yours, we deliver market RTX Telecomsuccess through award-winning design inproducts, CBI graphics and branding. FLSmidth Tetra Pak HoyerThe wide variation of market knowledge NECexperienced together with our clients DSBpartnerships has contributed to our constantfocus on new-thinking at the very edge of CipherLabinnovation. Dali Loudspeakers ADLink Your success becomes our success - especiallythrough a long term partnership. 13. Emerging MarketsThe Emerging Markets program is one of DNsinitiatives to help our clients and otherinterested companies to reach new potential. Emerging Markets typical program modulesThe program is a catalyst for progress in that 1we co-work by stimulating new thinking and Mentoring: Defining the strategic visionexcellence in design and operations in your own Researching the target markets in-house staffs. The program itself is divided Strategic value creation New branding into a tailor-made modules to suit your ownspecific requirements and visions. 2 Development and Innovation Re-innovating products and service Marketing testingNew thinking starts at the top not at the User interface and appealbottom . So the first modules are mentoring Co-creation with inhouse marketing + R&D teamsmodules with management. Through R&D and 3marketing the modules take on a more Implementation Specifications, definition and aimsconsultative and guiding content. Launch Promotion Media coverage The bottom line is getting value onto themarket with wide customer and media appeal 14. Contact one of the below formore detailed information onhow the DN Emerging Marketsprogram can help yourcompany. DN Aps DN Aps Mejlgade 5016F 3 Baghuset 2.530 Ying Cai Road 8000 Aarhus CTaichung 40360Denmark Taiwanwww.dngroup.dkwww.dngroup.dk fr@dngroup.dkhwj@dngroup.dk+45 7022 1012 +886 4 2305 1011

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