1

2

Delphi Packard Comm. Ops. Analysis

Options:

1. Sailing

2. Horse riding

3. Traveling

Driver: Mona Lisa Brookshire

Make: Clark Atlanta University

Model: Sales & Marketing

Year: 2nd Year MBA

Car # 25 - Panther

Supervisor: David Carnegie

3

August 11th 2004 AGENDA

Competitive Analysis

Marketing Research

Marketing Mix (4Ps)

Consumer Insights

SWOT/Synergy Analysis

Observations & Strategies

Delphi Packard Business Lines:

•DCS•E/EDS•DMS

Delphi Packard Competitors:

--Tyco

--Molex

--Yazaki

--Lear

--Sumitomo

--Yazaki

--Eaton

--Carling Technologies

--EAO

4

• Metrics

• Intro to Competitive Analysis Process

5

Enhance Market Share, Mind Share & Heart Share

Create a technology-driven e-catalog and

troubleshooting websitefor customers

Leverage automotive capabilities and form strategic

business partnerships

• Quality• Cost• Responsiveness• Adherence to Schedule (Manufacturing)• Technology• Global Footprint• System Approach• Development capability and service• Innovation• Integrity, Confidence and Trust• Learning Organization• Analytical Support• On-Site Support• Time to Market• Integration (Systems, Tools & Processes)• Conformance to customer specifications• Aligned Vision

Key Differentiators & Top 3

6

Market Opportunity Analysis Can the benefits of the market opportunity be articulated

convincingly to a defined target market?

Does the company possess critical capabilities and resources needed to deliver the customer benefits?

Can the company deliver the benefits better than any actual or potential competitors?

Ideal business: High Opportunities & Low threats e.g. Tyco

Speculative business: High Opportunities & Threats e.g. Yazaki

Mature business: Low Opportunities & Threats e.g. Sumitomo

Troubled business: Low Opportunities & High Threats e.g. EAO

7

Market Leader-New Uses-New Users-More Usage

E/EDS AGAINST SUMITOMO

Market Challenger-Flank-Frontal-Bypass

DCS AGAINST TYCO/MOLEX

Market Follower-Innovative Imitation-Clone-Adapt

DCS AGAINST YAZAKI

Market Nichers-Customization-Service-oriented-Quality-price specialist

DMS AGAINST EATON

Proposed Initiatives

8

Yazaki2.9%

Amphenol2.9%

Delphi4.5%

FCI5.1% Molex

6.5%

Tyco18.7%

JST2.4%

Other57.0%

Delphi3.6%

Other52.7%

Carling Tech6.0%

Eaton12.0%

EAO12.0%

Honeywell13.7%

MARKET SHARE

Commercial Vehicle Market $0.5B Connector Market $28B

E/EDS Market $20B

5.23B1.82B

1.26B

.81B

Lear 1.4B

60M

30M

60M

Other37%

Yazaki21%

Delphi24.0%

Sumitomo11%

Lear7%

1.4B2.2B

4.8B

4.2B

18M

9

Sales AnalysisBusiness Lines & Competitors Sales/Revenue RankingDCS 1,260,000,000 3TYCO 5,236,000,000 1MOLEX 1,820,000,000 2YAZAKI 812,000,000 4E/EDS 4,800,000,000 1LEAR 1,400,000,000 4SUMITOMO 2,200,000,000 3YAZAKI 4,200,000,000 2DMS 17,900,000 4EATON 60,000,000 1CARLING TECHNOLOGIES 30,000,000 2EAO 30,000,000 2

Connector Mean/Average 2,282,000,000 Median 1,540,000,000 Max 5,236,000,000 Min 812,000,000 EDS Mean/Average 3,150,000,000 Median 3,200,000,000 Max 4,800,000,000 Min 1,400,000,000 Commercial Vehicle Mean/Avg 34,475,000 Median 30,000,000 Max 60,000,000 Min 17,900,000

SALES/REVENUE NUMBERS (2003)

SALES/REVENUE ANALYSIS (2003)

10

2003 Sales/Revenue$ Millions

010000000200000003000000040000000500000006000000070000000

DMS Eaton CarlingTech

EAO

$ Billions

0

1000000

2000000

3000000

4000000

5000000

6000000

E/EDS Yazaki Sumitomo Lear

$ Billions

0100000020000003000000400000050000006000000

DCS Tyco Molex Yazaki

11

TYCOStrengths:Technology driven e-catalog & online support system

Booming healthcare business allows Tyco to offset lackluster performances in other business segments

Opportunities:Affiliation with Motorola enables joint developments on smart connections systems

Consistent development of products to match the architecture of future wiring harnesses

Weaknesses:Limited customization philosophies

Quality and integration capability concerns

Threats:OEMs are moving towards Dual Source philosophy to include more than one automotive supplier at a time

Lack of emphasis on ‘recognizable’ automotive connection systems in N.A.

12

MOLEXStrengths:Breakthrough in customization capabilities for system applications

Strong balance sheet with low debt-to-equity ratio provides internal funds for new investments and acquisitions

Opportunities:Acquisition of Cardell provides Molex with in-line connection system technology

New micro-connectors will enable customers to decrease package size

Weaknesses:Lack of high power applications & automotive portfolios

Several operations in recession-struck regions of North America

Threats:Limited product portfolio prevents Molex from supplying full vehicle architecture

Recent cut-backs in OEM expenditure on connectors

13

YAZAKI (DCS)

Strengths:Leading supplier of wire harnesses to all eleven Japanese automakers

Diversified customer base and strong global capabilities

Opportunities:Increasing GM business due to strong alliances with GM group companies, Subaru, Suzuki and Saab

Yazaki is able to choose its own components & design specifications for Toyota and other Japanese OEMs

Weaknesses:Limited marketing of connector technology

Weak engineering, design and product development in Europe

Threats:Poor performance with regards to reaction time is decreasing Ford interest in Yazaki products

Perception that the best technology is saved for Toyota

14

DCS Strategies/RecommendationsDCS Strategies/Recommendations Focus on smaller competitors with less than 5% market

share in the automotive supplier industry because true innovation usually comes from small, inconspicuous companies (e.g. JST, Amphenol, FCI etc.)

Follow patent applications: not all patents lead to products but patents still indicate a company’s direction

Monitor the trend and formation of business contracts and strategic alliances/joint ventures (especially global ones)

Incorporate a flexible and/or variable cost structure that focuses more on the relationships with individual OEMs (reduce fixed cost base and align capacity with changing market conditions)

Revamp business models, streamline operations globally and encourage new branding of products

15

LEARStrengths:Strong program management capabilities & product design technology

Robust new business backlog ensures significant revenue growth in the coming years

Opportunities:Successful joint ventures with TNK have increased Lear’s presence in the Asian markets as a whole.

Growth in emerging markets (especially in China & India)

Weaknesses:High level indebtedness and recent increase in SG&A costs due to high investment in foreign businesses

Vulnerable to increase in interest rates because of the increasing financial constraints on the company

Threats:Intense competition from global players can adversely affect Lear in the long run

Low customer diversification - 72% of its revenues came from the 3 top OEMs

16

SUMITOMOStrengths:Technology trendsetter (several Automotive Technology Labs established in 2001)

Successful joint ventures with Aisin Seiki, Denso & Toyota

Opportunities:Increased automotive business with GM

Sumitomo plans to increase production capacity by 50% with the creation of new factories in Suzhou (Shanghai) and Huizhou (Guangzhou)

Weaknesses:Notorious for low quotes in the beginning followed by price increases later

Slow introduction of new and innovative products

Threats:Limited presence in the North American automotive supplier market

Slow development of intelligent automotive systems has reduced the demand for EDS products

17

Strengths:Yazaki’s state of the art Learning Center facilitates advanced training in labs and classrooms on EDS systems

Scalable Nodal Active Power (SNAP) architecture with Johnson Controls has enabled Yazaki to remain a key tier-one supplier of EDS

Opportunities:Recent promotion of decentralized factories will facilitate continuous improvement

Positions itself as the global alternative to Delphi Corporation

Weaknesses:Customer complaints about Yazaki’s unwillingness to make product changes for customers

Decreasing sales from former main customer Nissan

Threats:Centralization has greatly increased transportation costs at global locations

Top OEMS are dissatisfied with Yazaki’s customization and design capabilities

YAZAKI (E/EDS)

18

E/EDS Strategies/RecommendationsE/EDS Strategies/Recommendations

Brand Delphi’s business lines with a specific value proposition and product function (e.g. Lear’s Intertronics)

Launch a user-friendly Asian website for the Japanese and Chinese market and incorporate a global communication platform

Leverage electronic capabilities (reduce weight and size), continually integrate wiring systems and implement miniaturization and/or customization systems (Focus on 80/20 ratio)

Launch innovative advertising campaigns to market new EDS technology and design applications

Connect with R&D and find out recent changes in OEM demands that could alter the business environment

19

EATON

Strengths:Strategic alliance with Dana Corporation culminated in the creation of the Roadranger online-support website in 1997

Recognized for superior products: Eaton Fuller AutoShift, Eaton VORAD Collision Warning System & Eaton Fuller Solo Clutch

Opportunities:New diverse product lines: Patented ULF Ultralite Valve, M-Series Pumps, FP-5000 Feeder Protective Relay, Powerfold 240 & Powerfold 204

Alliance with Nittan Valve of Japan has increased Eaton’s presence in Asia

Weaknesses:Revenue continues to decrease annually (since 2001) because of the poor performance of the Industrial and Commercial Controls Segment

Declining sales in the fluid power division and truck division continues to affect the company’s operating profit

Threats:Eaton has fallen prey to unstable market conditions in Asia due to the high percentage of restructuring initiatives focused in China & Japan

Declining sales in the fluid power division and truck division continues to affect the company’s operating profit

20

CARLING TECHNOLOGYStrengths:User-friendly eLibrary and product catalog allows customers a wide variety of options

Carling’s Tool & Die division ensures that products are created without costly secondary modifications for each commercial vehicle client

Opportunities:Innovative new product line: Miniature and Sub-Miniature PC Mount Switches, Contura VP-Series Illuminated Indicators, Mirror Rotate Control and Flat Rocker Actuators

Launch of new user-friendly Chinese website to service its Asian OEM clients

Weaknesses:Limited marketing of commercial vehicle electronic and switch components

Weak efforts to gain global presence in Europe and Asia

Threats:Overdependence on American market (over 77% of sales)

Mounting costs of recent acquisitions have backfired and continue to threaten the profitability of the company in the short term

21

EAOStrengths:EAO Competence Centers focus on three successful modules: Form, Fit & Function in order to meet commercial vehicle design and engineering requirements

Recognized for its Zero-Fault Rating with SMT placement/soldering lines and PC-controlled test equipment in the commercial vehicle industry

Opportunities:TOCUS guarantees Total Customer Satisfaction and ensures the value propositions of competence, reliability and competitive edge

Recent launch of HMI products with customized switches featuring touch sensitive technology include the Series 56 pushbuttons (suitable for partially sighted, handicapped and disabled users)

Weaknesses:Limited presence in the United States and Asian markets

Poor development, design and engineering capabilities in the Asian market

Threats:Total reliance on the European commercial vehicle market

Eaton’s commercial vehicle segment brings in the lowest amount of revenue to the company each year

22

DMS Strategies/RecommendationsDMS Strategies/Recommendations Penetrate a new market niche and name some products

according to innovative OEM product lines (e.g. subtle reference to Chrysler’s winning 300 flagship Sedan)

Build volume in lower cost production locations and reduce material cost by identifying cheaper alternative resins and metals

Introduce corporate-wide design implementation incentives for employees that come up with product design patents and/or ideas

Incorporate Six Sigma and Lean methods to examine new ways in which DMS can improve processes to eradicate waste, defects and variability on the manufacturing side as opposed to focusing primarily on the engineering aspect of the business

Investigate emerging technologies, let go of unprofitable programs and promote R&D expenditure to focus on alternate business lines

23Make DecisionsMake Decisions

Present Present FindingsFindings

Develop the Develop the Research Research

PlanPlan

Define the Define the problemproblem

Collect & Collect & Analyze Analyze

InformationInformationDelphi

METHODOLOGY

24

DRIVING TOMORROW’S TECHNOLOGY

Delphi Corporation

Competition

OEM

25

Information Sources

• Syndicated Data: AC Nielsen/IRI Reports• Global Insight/World Markets Research Center• Internal Financial Data• Customer/Retailer Data• Business Source Premier/Data Monitor• Trend Reports• Customized Research (qualitative & quantitative)