01 im assessment

7/28/2019 01 IM Assessment

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Innovation ManagementThe management of the economic application of

Universidad NacionalBogot, ColombiaDate: 16th March 2012

,to gain a competitive advantage


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Agenda

1. The Concept of Innovation Management

2. Corporate Assessment

3. Business Environment Analysis

0. Course Kick-Off

Industrieberatung Consultores EmpresarialesIM Uni Nacional/2012 March 2.2

4. Innovation Strategy

6. Innovation Fields

5. Innovation Process and Organization

7. Innovation Transfer and Controlling


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The objective of the lesson is to introduce an approach to get anoverview of the initial business situation of a company, to determinethe business position and to finally evaluate the potential of thecompany for innovation.

To analyze the strengths and weaknesses of the company we have toanswer the questions as follows:

On which market is the com an active?

Objectives of the lesson


Are there customers with similar needs and requirements?

How is the business situation of the company and which are the mostsuccessful business areas?

How is the position of the products and technologies?

What are the strengths and weaknesses in the business functions ofthe company?

What are the core competences of the company as a basis for the

achievements of the company?


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Market

Chances for companies

New consumer markets Consumer segments with

high growth Consumer demand not or

insufficient covered

New materials New manufacturing

rocesses


BusinessBusinessBusinessBusinessOpportunitiesOpportunitiesOpportunitiesOpportunities

Products/

Technologies

Competition

New competitors Weaknesses and business

gaps of competitors Substitutional products New business models

New technical standards New devices to be supplied


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Market

Corporate Assessment: Questions

Where to compete ?

With whomto compete ?

Analysis of the arenaof competition

Market Segmentation

Business Structure

Analysis of the position


Corporate

AssessmentProducts/

Technologies Competition

How to compete ?

Analysis of the corporateresources

Core Competences

compared to competition Portfolio Analysis

Benchmarking


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2. Corporate Assessment

1 Identification of homogenouscustomer groups

Overview of the initial situation

1

Milestones Results

2.12.12.12.1

2.22.22.22.2 Business Structure

Market Segmentation


3

4

5

Overview of the businessposition in terms of businessfunctions

of the business areas

Overview of the businessposition of the company in termsof products and technologies

2.32.32.32.3

2.42.42.42.4

2.52.52.52.5

Portfolio Analysis

Core Competences

Benchmarking

Determination of distinctive

competences


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Corporate Assessment

1

1

Milestones Results

2.12.12.12.1


Market Segmentation

Identification of homogenouscustomer groups


3

4

5

2.32.32.32.3

2.42.42.42.4

2.52.52.52.5

Portfolio Analysis

Core Competences

Benchmarking


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Objectives of Market Segmentation

Market segmentation is the process of dividing a market into distinctsubsets (segments) that behave in the same way or have similarneeds.

Market segmentation is useful to determine attractive customers andto concentrate the development on the specific requirements ofthese customer.

For the creation of customer segments it is necessary to identify key


segmentation variables with the goal to cluster customer with equalrequirements.

Key segmentation variables should allow to lead to different variantsof the product or should have a high importance for the buyingdecision of the customers. Relevant variables are derived from the

basic requirements and the applications:

Function or problem solution: what need is being satisfied?

Types of customer: who is being served?

Technology of the product: how customer functions are being served?


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acroSegmentation

Manufacturer of Electric Pumps

Vacuum Technique Process Market

Special Chemistry Pharmacy Polymere

X Y Z

Vacuum Application

Key segmentation variables


Micro-

Segmentatio

n

Big Customers

Price-driven Quality-driven Service-driven

Medium Customers Small Customers

Segment is alreadyserved

Segment is not servedalthough CRM is astrength of thecompany!


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Market Segmentation 1(4)


Characteristica:

All customer groups

No market segmentation

Example: Pump Market Customer Groups(Diameter corresponds

to market size)


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Characteristica:

All customer groups

Market segmentation with

segmentation criteria:

application

Example: Pump Market Customer Groups(Diameter corresponds

to market size)


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Market Segment 1

Market Segment 4

Market Segment 3

Market Segment 9

Market Segment 8

6,8%

12,2%

28,3%

19,3%

4,0%

5,4%


Characteristica:

All customer groups

Market segmentation with

several segmentation

criteria

Example: Pump Market

Market Segment

(Percentage:

share of the entire

market)

Market Segment 7Market Segment 6

Market Segment 5

8,7%

12,6%

2,6%

Market Segment 2

Customer Groups

(Diameter corresponds

to market size)


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Market Segment 1

Market Segment 4

Market Segment 3

Market Segment 9

Market Segment 8

6,8%

12,2%

28,3%

19,3%

4,0%

5,4%



Market Segment 7Market Segment6

Market Segment5

8,7%

12,6%

2,6%

Market Segment2

Characteristica:

Process market: spec.

chemistry & polymere

Mainly big companies

from Europe, medium-

sized sales

FRVP, variation xyz

Quality oriented

Example: Market Segm. 2

Market Segment

(Percentage:

share of the entire

market)

Customer Groups

(Diameter corresponds

to market size)


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Definition Market Segmentation

is the process of splitting customers, or potential customers in a market into

different groups or segments, within which customers share a similar level of

interest in the same or comparable set of needs

andandandand


a successful segmentation is

substantial: has to be large and profitable enough

accessible: it must be possible to reach it efficiently

differential: it must respond differently to a different strategy

actionable: the company must have a product for this segment

measurable: size and purchasing power can be measured


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1

1

Milestones Results

2.12.12.12.1


Market Segmentation

Overview of the initial situation


3

4

5

2.32.32.32.3

2.42.42.42.4

2.52.52.52.5

Portfolio Analysis

Core Competences

Benchmarking

of the business areas


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Objectives of Business Structuring

Business structuring is the process of analyzing the as-is situationof the company on the basis of the results of the marketsegmentation.

The market segmentation allows to identity and analyze the areas ofactual business activities of the company at a more fine-grainedlevel answering the question: Where to compete?

Applying the tool Product-Market-Matrix it is possible to structure


the business and to identify need for actions taking the steps asfollows:

Determination of business segments with regard to the marketsegmentation.

Description of each business segment taking into account turnover,sales growth and profitability.

Benchmarking within the peer group of business segments identifyingstrengths and weaknesses.

Deriving consequences and measures to improve the situation.


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Market Segments

MS 1 MS 4MS 2 MS 5MS 3 MS 6

PG: Product Group

SP: Service Package

BA: Business AreaMBA: Main Business Area

MS: Market SegmentMarket segments taking intoaccount variables of:

Function or problem solution

Types of customer or

distributions channels

Technology of the product

MBA 1

Product-Market-Matrix


PG 2

PG 3

SP 3

SP 1

SP 2

MBA

2

MBA 3BA

Description of a Business

Area e.g.:

Sales [Mio ]

Profit RoS [%]

Market Share

Produ

cts/Services

Cross-sales Product

OfferofaSysten

Sales Growth p.a. [%]


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PG 1

PG 2

PG 3

SP 1

SP 2Products/Serv

ices

Geograhical Region

EuropeNorth-america

South-america

PG 1

Europe

UK Italy France

Asia

Ger-many

PG: Product Group

SP: Service Package

Levels of Market Segmentation


SP3

PG 2

PG 3

SP 3

SP 1

SP 2 PG 1

PG 2

PG 3

SP 3

SP 1

SP 2

Customer Segment

X Y Z

Products/Service

Products/Serv

ices


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PG 1

PG 2

rvices

Market Segments

MS 1 MS 4MS 2 MS 5MS 3 MS 6

0,6

0,4

0,0

0,3

0,6

6,7

4,3

2 0 0

3

22 0 1

0

1

54,3

27,3

11,2

12,3 26,4

1

0

1

0 1

1

2

1

2 1

1,5 8,8

0 02 111,4 9,8 4,2 1,7

MBA1

MBA3

S

RoS Sg

Description of the business


PG 3

SP 3

SP 2Products/S

Sales [S, in Mio ]

Sales > 10 Mio.

Sales < 10 Mio.

Sales < 1 Mio.

Sales Growth [Sg]

3 : Grow higher than market (+1%)

2 : Grow similar than market1 : Grow lower than market

Return on Sales [RoS]

3 : Margin > 10%

2 : 10% >= Margin > 5%

1 : 5% >= Margin > 1%

6,5

0,3

0,5

4,5

3

3

0

0

2

1

2

0

1

1

13,2

3

3

3

2

2,5

0,3

3,4

0,6

1

0

1

1

2

1

1

1

0,9

0,2

0,0

0,0

3

2

0

2

0

3

3

2

0

0

12,7

3 21,6 0,5

1

2

0

0

2

2

0

1

6,8

2,1

3

3

2

2

3

2

MBA2


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Example for Main Business Areas


Military Transport

Aircrafts

Civil Passenger and

Cargo Transport

Military Air Systems Space Systems


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Example for Main Business Areas


Tractor Harvester Forage Harvester


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Business Structure: Example

Business Structure

Company:GEA Air Treatment Divsion

- Headquarters: Herne, Germany- Employees: 1.600- Sales: 225 Mio. - Manufacturing plants: 6


-

countries

Products:Air conditioning equipmentand systems

Mission:GEA offers- technical and commercial optimized systems solutions of climatization- by integrating of differnt devices and components- on the basis of a standardized control network


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Product groups

and services

GEA: Segmentation 1(3)

Products


Customer segments/

Project classesCountry clusters

Market SegmentsGeographic

Regions


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Product groups

and services


Products


Customer segments/



Regions


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The market segmentation is based on the type of customer with ten identified

customer groups and further segmentation taking into account the main

success factor for the buying decision: Price-driven: Price of the system with main function Cooling

Quality-driven: Quality and life-cycle-costs of the system


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Geographic regions

GEA: Business Structure 1(3)


Pr

oductGroup

s


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Geographic regions

uctGroup

s

Sales

Gross Margin S. Growth

Sales 2003 in T

Average Gross Marginin %:

[(Sales Transfer Price)/

Low Sales Growth

No Growth

Decrease of Sales

High Sales Growth

0-100

100-1.000

1.000-5.000

5.000-10.000

10.000-



Pr

o

a es xStrong Decrease of Sales

Description of GEA Air Treatment business with regard to the business segments:

Sales in 2003

Sales development in the last 3 years

Gross margin


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Market Segments



ProductGroups


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1

1

Milestones Results

2.12.12.12.1


Market Segmentation


3

4

5

2.32.32.32.3

2.42.42.42.4

2.52.52.52.5

Portfolio Analysis

Core Competences

Benchmarking

Overview of the businessposition of the company in termsof products and technologies


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Objectives of Portfolio Analysis

The basic idea is to represent and analyze the businesses of thecompany within a simple graphic framework that can be used toassist the corporate assessment in four areas:

Market Portfolio: Examines the position of a business area in relationto the two primary sources of profitability: market attractiveness andcompetitive strengths.

Technology Portfolio: Examines the technology position of the


company in relation to the two primary sources of technology push

innovations: technology attractiveness and technological strengths.

Success Factor Portfolio: To the extent that positioning with regard tosuccess factors can assist setting performance targets for individualbusinesses and products.


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ApproachObjectiveAnalyze the as-is position of products

and business areas.

Decide which businesses should receive

more or less investment.

Develop growth strategies for adding

new products and businesses to the

The two axes consider the familiar

sources of superior profitability of a

company:

The company external factor marketattractiveness with the sub factors e.g.

market size, market growth, industry

profitability.

Market Portfolio (McKinsey/GE Matrix)


,

when products and businesses shouldno longer be retained.

The company internal factor competitiveposition is computed on the basis of the

following variables e.g. market share,

competitive position and return on sales.

The drawing up is superficial with the help of EXCEL-sheets (value benefit analysis).

More efforts are necessary in the survey of the data and the aggregation of the information

especially the market size and the industry profitability.

Effort


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+ High market priorityInvest for growth, expansion

?Medium market priority

Analyse to determine whether

business can be grown or will

degenerate

Market Portfolio: Layout

Market

Attractiveness Market Size, Market Growth,Industry Profitability

B

? +?? ++

high

2

3


-

Divest or support for growth

business

Competitive Strengths

Market Share,

Competitive Position,

Return on SalesC

A

---low

medium

low medium high

1

01 2 30

M k P f li D fi i i f f ibl f


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Strength of assets and competencies

(R&D potential, quality level,

production potential, qualification of

management and staff)

Wide range of goods to sell (sales

mix)

Relative brand strength


Market Size

Market growth

Market profitability

Stability of the market

Barriers of market entry for new

provider

Market Attractiveness

Market Portfolio: Definition of feasible factors


Market share

Customer loyalty

Relative cost position (cost structure

compared with competitors)

Distribution strength

Record of technological or otherinnovation

Access to financial and other

investment resources

Competitive intensity / rivalry

Number of customers

Overall risk of returns in the industry

Opportunity to differentiate/substitute

products and services

Segmentation

Distribution structure (e.g. retail,

direct, wholesale)

M k t P tf li C l l ti Sh t 1(2)


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Market Attractiveness MBA 1 MBA 2 MBA 3 MBA 4 MBA 5 MBA 6 MBA 7

Criteria Weighting Rating: VxW Rating: VxW Rating: VxW Rating: VxW Rating: VxW Rating: VxW Rating: VxW

Market Size 30%

3 = High 0 0 0 0 0 0 0

2 = Medium

1 = Small

0 = Very small

Market Portfolio: Calculation Sheet 1(2)


ar e row p.a. 40%

3 = Growth (>5% p.a.) 0 0 0 0 0 0 0

2 = Growth (>2% p.a.)

1 = Stagnation

0 = Decline

Intensity of Competition 30%

3 = Few small competitors 0 0 0 0 0 0 02 = Few equivalent competitors.

1 = Many strong competitors

0 = Ruinous

Market Attractiveness 100% 0 0 0 0 0 0 0

M k t P tf li C l l ti Sh t 2(2)


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Competitive Strengths MBA 1 MBA 2 MBA 3 MBA 4 MBA 5 MBA 6 MBA 7

Criteria Weighting Rating: VxW Rating: VxW Rating: VxW Rating: VxW Rating: VxW Rating: VxW Rating: VxW

Market Share 20%

0 0 0 0 0 0 0

3 = High (one of the top 5 supplier)2 = Signifikant

1 = Moderate

0 = Mediocre

Market Portfolio: Calculation Sheet 2(2)


a es eve opmen 45%

0 0 0 0 0 0 0

Profitability 35%

0 0 0 0 0 0 0

Competitive Strengths 100% 0 0 0 0 0 0 0

3 = Above market growth

2 = Slightly above market growth

1 = Just as market

0 = Losing market share

3 = High (RoS > 10%)2 = Medium (6% < RoS


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The size of the bubble

represents the relative

volume of turnover ofthe product program

Market

Attractiveness Market Size, Market Growth,Industry Profitability

Market Portfolio: Example

B

? +

BB

?? ++

high

2

3



Market Share,

Competitive Position,

Return on SalesC

A

-

CC

AA

0 --low

medium

low medium high

1

1 2 30

Portfolio Analysis: Example


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Portfolio Analysis: Example

Business Structure

Company:GEA Air Treatment Divsion

- Headquarters: Herne, Germany- Employees: 1.600- Sales: 225 Mio. - Manufacturing plants: 6


-

countries

Products:Air conditioning equipmentand systems

Mission:GEA offers- technical and commercial optimized systems solutions of climatization- by integrating of differnt devices and components- on the basis of a standardized control network

GEA: Segmentation


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Product groups

and services

GEA: Segmentation

Products


Customer segments/



Regions

Example GEA Air Treatment: Products


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+Strong

Position

?

2

3

high

Market AttractivenessMarket sizeMarket developmentIntensity of competition

SystemsSolutions Chillers


Product groups

and services

Products


Weak

Position ?

0 1 2 30

1

low

low

medium

medium

high Competitiveness

Market shareDevelopment of turnoverProfitability

The size of the bubble represents

the relative volume of turnover in

2003

DSC

DSI

Controls

r on on ngSplits

VEP

AHU

Example GEA Air Treatment: Market Segment


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The market segmentation is based on the type of customer with ten identified

customer groups and further segmentation taking into account the main

success factor for the buying decision:

Price-driven: Price of the system with main function Cooling

Quality-driven: Quality and life-cycle-costs of the system



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+Strong

Position

?

Market Attractiveness Market size new buildingsMarket development

Industrial:Office BuildingsSmall commercial sector

2

3

high


Customer segments/

Project classes

Market Segments


Weak

Position ?

Competitiveness

Market Share

Health CareIndustrial:Production

Halls

Public Buildings

0 1 2 30

1

low

low

medium

medium

high



2003

Technology Portfolio


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ObjectiveObjectiveObjectiveObjective

ApproachAnalyze the technological position of

products.

Examine individual technologies or

technology categories and developstrategies.

Give indications on the reallocation of

The first axes of the portfolio considers

the technology attractiveness taking

into account the position of the

technology S-curve and the entry

barriers.

The technology position consider the

technology competence of the company

Technology Portfolio


The drawing up is superficial with the help of EXCEL-sheets (value benefit analysis).

More efforts are necessary in the survey of the data and the aggregation of the information.

Effort

.taking into account the factors strength

of the resources and strengths in theimplementation.

Technology Portfolio: Layout


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High technology priority

Invest for growth, expansion

Medium technology priority

Analyse to determine whether

technology can be grown or will

+

?

Technology Attractiveness

? +

Position on the S-curve,

Entry Barriers

gy y

high

2

3


Technology Position

degenerate

-Low technology priority

Divest or support for growth

business

-Strengths of the ResourcesStrengths in Implementation

--low

medium

low medium high

1

1 2 300

Product Life Cycle


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Sales

y

Introduction

5-10%

Growth

Decay

Rest

Innovation Cycle Product Portfolio


Intro-duction Growth Mature Decline

Time

Quelle: Moore, 1995

Optimized mix of products and services according to the innovation cycle is a

characteristic of successful companies.

10-25%

Mature

50-60%

Technology S-Curve: Approach


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Rate of

technological

progress

gy pp

Innovation Cycle

ApproachThe S-curve is used to describe how

new technology is adapted.

Innovations spread through society in a

S-curve, as the early adopters selectthe technology first, followed by the

majority, until a technology or

innovation is common.


Intro-duction Growth Mature Decline

Time

Quelle: Moore, 1995

A companys innovation strategy depends on the position of its innovation

within the S-Curve.

Initially people are slow to begin to use

the technology but once it is accepted

growth is rapid.

Finally, growth slows down when the

market is saturated and/or newer

technology comes along

Pace Setter Technology: example


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Nano Wires

A nanowire is a wire of dimensions of the order of a

nanometer (109 meters). At these scales, quantum

mechanical effects are important hence such wires are

also known as "quantum wires". Many different types of

nanowires exist, including metallic (e.g., Ni, Pt, Au),

semiconducting (e.g., InP, Si, GaN, etc.), and insulating

gy p


. ., , .

repeating molecular units either organic (e.g. DNA) or

inorganic (e.g. Mo6S9-xIx).

The nanowires could be used, in the near future, to link

tiny components into extremely small circuits. Using

nanotechnology, such components could be created out ofchemical compounds. Possible applications are:

- Sensors

- Flat screens

- Efficient lamps

Quelle: Technology Review 3/2004

Key Technology: example


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LCD Screen

Liquid Crystal Display screen found on many digital

cameras that allows previewing or reviewing of images.

The screen also serves as a monitor for the interface of

some camera controls. Different types exist: TFT (Thin

Film Transistor) and DSTN (Double Super Twisted

Nemantic) are the most common. The TFT screen is


.

However, TFT consumes more electricity than DSTN.

LCD screens are made by sealing a liquid compound

between two pieces of glass and/or a filter. The screen has

hundreds or thousands of dots that are charged or not

charged which make them reflect or not reflect light toform letters, characters and numbers. Some LCD screens

have an electroluminescent panel behind them and are

termed "backlit.

Quelle: Sony, Nokia, Siemens

Basis Technology: example


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Cathode Ray Tube

A cathode ray tube or CRT is a specialized vacuum tube in

which images are produced when an electron beam strikes

a phosphorescent surface. Television sets, computers,

automated teller machines, video game machines, video

cameras, monitors, oscilloscopes and radar displays all

contain cathode-ray tubes. Phosphor screens using


millions of colors.

The first cathode ray tube scanning device was invented

by the German scientist Karl Ferdinand Braun in 1897.

Braun introduced a CRT with a fluorescent screen, known

as the cathode ray oscilloscope. The first patent of atelevision set is from 1907 but the introduction into the

market was in 1928.

Quelle: Sony, Nokia, Siemens

Techn. Portfolio: Definition of feasible factors


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Technology PositionTechnology Attractiveness

R&D-Resources

Know-How

Mastery of the technology

Rate of realization and im lementation

Potential of further development

Broadness of application

Efforts and risks


of the technology

Supplementary technologies

Support through corporate strategy

Benefit from Synergies

Threat through substitute

technologies

Technology Portfolio: Calculation Sheet


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Criteria

Weight-

ing (%)

Product A Product B Product C

Value VxW Value VxW Value VxW

1. Position on the S-Curve3=New Key Technology

2=Pace Setter T./ spread Key T.

1=Basis Technology

0=Mature Basis Technology

70 1 0,7 2 1,4 2 1,4

2. Entry Barriers1

3=High

2=Medium

1=Low

0=Not existing

30 2 0,6 3 0,9 1 0,3

Customer Value

BasisTechnology

Key

Technology

3

2

2

1

0


100 1,3 2,3 1,7

Commentary:1) Entry barriers in terms of know-

how, long-term experiences,

manufacturing processes

2) Strengths of resources: know-

how, assets, human resources

Technology Position

Criteria

Weight-ing (%)

Product A Product B Product C

Value VxW Value VxW Value VxW

1. Strengths of the Resources2

3=High

2=Medium

1=Low

0=Not existing

50 1 0,5 3 1,5 1 0,5

2. Strengths in Implementation3=Fastest compare to competition

2=Same rate as competition

1=Slow

0=Frequent failure

50 3 1,5 3 1,5 1 0,5

100 2,0 3,0 1,0

ace e er

Technology0

Cumulated R&D Expenses

Technology Portfolio: Layout


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? +

B

Position on the S-Curve,

Entry Barriers


represents the relative

volume of turnover of

the product programhigh

2

3


Technology Position

-

C

A

Strengths of the ResourcesStrengths in Implementation

--low

medium

low medium high

1

1 2 300

Example: GEA Air Treatment


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+Strong

Position

?

AHU

Controls (GEA-

Matrix)


Position on the S-Curve,

Entry Barriers

2

3

high


Weak

Position ?

SystemsSolutions

FilterChillers

DSC

DSI

Air Conditioning/Splits

VEP

Technology Position

Strengths of the ResourcesStrengths in Implementation



2003

0 1 2 3

0

1

low

low

medium

medium

high

Success Factor Portfolio


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ApproachObjectiveSuccess factors define key areas of

performance that are essential for the

company to accomplish its mission.

The success factor portfolio clarifies themain points of differentiation:

Critical factors for business success

Describe the relevant factors for

business success and divide between

company specific factors and product

specific factors.

Determine the importance/relevance for

business success.


Analysis and evaluation of the

business position

Benchmarking with the competition

each factor in comparison with the

competition. Take into account an

internal view and an external view (e.g.

customers).

Develop a questionnaire and ask first the management of the company. The drawing up is

superficial with the help of EXCEL-sheets. More efforts are necessary with an external

survey.

Effort

Success Factor Portfolio: Layout


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3

4

high

Relevanc

e

Critical Success FactorsFactors with high importance andrelevance for the market/

customers but the company has a

weak position. Strong need for

action.

Balanced Success Factors

The position of the company

(strengths and weaknesses) is


0

1 2 3 4

low

Weaknesses Companys Position

Importanc

e/

Strengths

1

0

according the importance and

relevance of the factor.

Overvalued Success Factors

The company has a strong

position in areas which are of

secondary importance for the

market/customers. The allocation

of resources is not optimal.

Wrong emphasis on factors

which are no more important.

Definition of Success Factors


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Technical Product quality

Product development

Life span

Frame size

Emissions

Service Installation

Maintenance

Product Specific Success FactorsCompany Specific Success Factors

Competences Innovative products

Innov. technologies

Range of products

Skills of the sales

people

Systems capabilities

Resources Logistics


Design

DocumentationEase of handling

Ease of operation

Commercial Price

Life-cyle costs

Financing, Leasing

A success factor is regarded as a skill or a resource, which explains a major

part of the observable differences in perceived value of the offer.

Image

Financial supportSales locations

Spare parts

Organization Market communication

Sales organization

Service organization

Success Factor Questionnaire 1(2)


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Success Factor Questionnaire 2(2)


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Success Factor Portfolio: Internal View


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4

5

/Relevanc

e

High Critical

success-

factors

1 Range of the Scope of Supply2 Innovative Products3 Advisory Skills (Pre-Sales-Support)4 Offer of Complete Products5 Customer Support (Post-Sales-Support)

6 Flexibility / Agility

Internal ViewBase: 35 questionnaires

20 19

1817

16

15

14 12

1110

9

8

7

65

4

32

1


1

2Importance

L

ow

-- - -/+ + ++

Companys PositionStrengthsWeaknesses

Balanced

success factors

Overvalued

success-factors

7 Logistics8 Market Communication

9 Image10 Price11 Product Quality12 Economic Life Time

13 Operating costs14 Overall size of the product for system integration15 Ease of Integration

16 Ease of Maintenance17 Emission18 Design

19 Operating convenience20 Documentation

Success Factor Portfolio: Internal/ExternalView


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4

5

/Relevanc

e

High Critical

success-

factors

1 Range of the Scope of Supply2 Innovative Products3 Advisory Skills (Pre-Sales-Support)4 Offer of Complete Products5 Customer Support (Post-Sales-Support)

6 Flexibility / Agility

Internal ViewBase: 35 questionnaires

External ViewBase: 53 questionnaires

20 19

18

1716

15

14 12

1110

9

8

7

65

4

32

1

20

19

18

171615

1413

12

11

10

9

8

7

6

5

4

3

2 1


1

2Importance

L

ow

-- - -/+ + ++

Companys PositionStrengthsWeaknesses

Balanced

success factors

Overvalued

success-factors

7 Logistics8 Market Communication

9 Image10 Price11 Product Quality12 Economic Life Time

13 Operating costs14 Overall size of the product for system integration15 Ease of Integration

16 Ease of Maintenance17 Emission18 Design

19 Operating convenience20 Documentation



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1

1

Milestones Results

2.12.12.12.1


Market Segmentation


3

4

5

2.32.32.32.3

2.42.42.42.4

2.52.52.52.5

Portfolio Analysis

Core Competences

Benchmarking

Overview of the businessposition in terms of businessfunctions

Objectives of Benchmarking


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Benchmarking is a process in which organizations evaluate variousaspects of their processes in relation to best practice, usually withintheir own sector. This then allows organizations to develop plans onhow to adopt such best practice, usually with the aim of increasingsome aspect of performance.

Benchmarking opens organizations to new methods, ideas and toolsto improve their effectiveness. It helps crack through resistance tochan e b demonstratin other methods of solvin roblems than


the one currently employed.

Benchmarking, originally invented as a formal process by RankXerox, is usually carried out by individual companies and coverthree levels of applications:

Benchmarking with direct competitors on company level

Benchmarking with direct competitors on process level

Benchmarking with business units of the same company (peer group)on process level

Casting Industry in Germany


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Benchmarking on company level 1(2)

M k t


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? +

high

2

3 Successful companies

operate on attractive

markets and possess

high competitiveness.

Big companies tend

to have a betterpositioning than

smaller companies.

Market

Attractiveness

Market Growth,

Intensity of competition

No. of analysed companies = 60


-low

medium

0low medium high1 2 30


represents the volume

of turnover of the

company concerned

1Companies which operate on

markets with low attractivenessand possess at the same time

low competitiveness have long-

term no chance of survival.


Market Share,

Sales Growth

Benchmarking on company level 2(2)

Market M k G h


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? +

2

3

Development/construction

in totally in-houseresponsibility

Development/Constructiononly little in-house ortotally outsourced

No naming

high

Market

Attractiveness

Market Growth,

Intensity of competition

No. of analysed companies = 60


-

1

01 2 30

The size of the bubblerepresents the volume

of turnover of thecompany concerned

low

medium

low medium high

Successful companies conduct

development and construction

in totally in-house responsibility


Market Share,

Sales Growth

Benchmarking on process level


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Firm Infrastructure

Technology Development

Human Resource ManagementSupportActivities

Identifying areas of processes


Procurement

Marketing &

Sales

Opera-

tions

Inbound

Logistics

Outbound

Logistic

Service

Primary Activities

Quelle: Porter

Source: M.E. Porter, competitive advantage, 1985

Evaluation of process areas 1(2)


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Process Area Evaluationin comparison to main competitor

--

0

-

1

o

2

+

3

++

4

Corporate Culture and

Leadership

Marketing and Sales

Product Planning

Operations Evaluation incomparison to

main

competitor


Product Development

Operations

Order Processing and

Logistic

-- - o

Mastering key

manufacturing process

technologies

x

Vertical range of

manufacture

x

Adherence to delivery

dates


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Weaknesses and Strengths 1(6)


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Corporate Culture andLeadership

Evaluationin comparison to main competitor

Explanation

--

0

-

1

0

2

+

3

++

4

Transparent information policy by

the management

Management by objectives

To evaluate results and monitor

deviations from the objectives

Identification with products und

Ermittlung der Strkenund Schwchen mit demfolgenden Arbeitsbgen:

Determination ofweaknesses and strengthson the basis of criteriaas follows


Leadership

Marketing and Sales

Product Planning

Product Development

Operations


customer concerns

Adventurous, Fighting Spirit

Goal orientation

Unit de Doctrine (team spirit)

Openess

Balance of goals and resources

Awareness for quality

Etc.

Total

Key:-- essentially worse-rated- worse-ratedO comparable rated+ superior rated++ essentially superior rated

(than the main competitor)

Order Processing and Logistic



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Marketing and Sales Evaluationin comparison to main competitor

Explanation

--

0

-

1

0

2

+

3

++

4

Dedication for the products

Market image

Care for customers

Development of sales channels

Ambitious selling




Leadership

Marketing and Sales

Product Planning

Product Development

Operations


ys ema c an ransparence n

customer acquisition process

Development of new saleschannels

To keep the sales goals

Precise market segmenation

Precise determination of the

market requirements

Co-operation between marketing

and product planning

Co-operation between sales and

order processing

Total






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Product PlanningEvaluation

in comparison to main competitorExplanation

--

0

-

1

0

2

+

3

++

4

Precise market segmentation

Determination of the product

advantages for the customers

Support of the sales process with

documentation and arguments

for the sales staff




Leadership

Marketing and Sales

Product Planning

Product Development

Operations


Precise specification for the

product planning

To enter into co-operations withR&D partners

Consideration of Make or Buy-

concepts

Training and support of the sales

partners

Drafting and implementation ofbusiness plans

Etc.

Total






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Product Development Evaluation

in comparison to main competitor

Explanation

--

0

-

1

0

2

+

3

++

4

To aim for co-operations

Customer focused development

Time-to-market

Adherence to schedules and

delivery dates

Ermittlung der Strkenund Schwchen mit demfolgenden Arbeitsbgen:Determination ofweaknesses and strengthson the basis of criteriaas follows


Leadership

Marketing and Sales Product Planning

Product Development

Operations


R&D efficiency

Flexibility

Quality gates

Systematic development

approach and auditability

Co-operation with sales and

marketing

Co-operation with manufacturing

Ease of manufacturing

Innovative products

Total






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Operations Evaluation


Explanation

--

0

-

1

0

2

+

3

++

4

Mastering key manufacturing

process technologies

Vertical range of manufacture

Adherence to delivery dates

Efficiency/production cost

Ermittlung der Strkenund Schwchen mit demfolgenden Arbeitsbgen:Determination ofweaknesses and strengthson the basis of criteriaas follows


Leadership


Product Development

Operations


Flexibility

Quality of production output

Co-operation with product

plannung and product

development

Co-operation with order

processing

Process innovations

etc.

Total




O d P i d E l ti E l ti E ittl d St k

D t i ti f



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Order Processing andLogistic

Evaluation


Explanation

--

0

-

1

0

2

+

3

++

4

Adherence to delivery dates

Time of delivery

Ability to supply

Quality of delivery

Flexibility of delivery




Leadership


Product Development

Operations


Information policy to customers

Low stocks

Co-operation with operations

Co-operation with marketing and

sales

etc.

Total






78/88

1

1

Milestones Results

2.12.12.12.1


Market Segmentation


3

4

5

2.32.32.32.3

2.42.42.42.4

2.52.52.52.5

Portfolio Analysis

Core Competences

Benchmarking

Determination of distinctivecompetences

Objectives of Core Competences Analysis


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The first four steps of this chapter consider an outside-in approachplaces the market, the competition, and the customer at the startingpoint of the corporate assessment. The core competence model (CC)is an inside-out model that starts the assessment process bythinking about the core strengths of an organization.

Sources of advantage are to be found in management's ability toconsolidate corporate-wide technologies and production skills intocom etencies that em ower individual businesses to ada t uickl


to changing circumstances.

The concept of CC was introduced by C.K. Prahalad and Gary Hamelin a 1990 Harvard Business Review article. They wrote that a corecompetency is "an area of specialized expertise that is the result ofharmonizing complex streams of technology and work activity.

CC are built through a process of continuous improvement andenhancement (compare: Kaizen). They should be a result of thecorporate strategy.

Definition of Core Competences


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as CC can be seen any combination of specific, inherent, integrated andapplied knowledge, skills and attitudes including technical/technological matter,

reliable processes, a close relationships with customers and suppliers or

culture such as employee dedication

andandandand


core competences

give potential access to a wide variety of markets: they must be capable of

developing new products and services,

give significant contribution to the competitiveness of the company:basis for the perceived benefits of the end product and

should be difficult for competitors to imitate.

In many industries, such competencies are likely to be unique.

Characteristics of Core Competences


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Potential access to a wide variety ofPotential access to a wide variety ofPotential access to a wide variety ofPotential access to a wide variety of

marketsmarketsmarketsmarkets

Difficult for competitors to imitateDifficult for competitors to imitateDifficult for competitors to imitateDifficult for competitors to imitate


Significant contribution to theSignificant contribution to theSignificant contribution to theSignificant contribution to the

competitivenesscompetitivenesscompetitivenesscompetitiveness

products and markets. CC are basis

for a big part of the performance of

the company.CC provide customer benefits and a

big contribution to the differentiation

of the own products and services in

comparison to the competitors.

because there are:

patents or trade mark rights,

complex knowledge based on

long-term learning processes,

high entry barriers based on

financial, technological and

personnel resources

Firm

Examples of Core Competences 1(3)

Management


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Infrastructure

Technology

Development

Procurement

HR Management

International

design centers

information system

Decentralizedstores

Personnel development

program

International

service centersCustomer

relationship


Inbound Operations Marketing & Outbound Service

Logistics Sales Logistic

Quelle: Porter

Core competences are distinctive internal skills, know how and knowledge

in all functions of the value added chain.

Supplier

Integration

program


PersonnelTools Information


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Technology

Development

HR Management

Firm

Infrastructure

Procurement

Equipment Know how

Laboratory

CAD

Industrieberatung Consultores EmpresarialesIM Uni Nacional/2012 March 2.83Quelle: Porter

Core competences are a combination of complementary skills and knowledge

bases embedded in a group or team applying the appropriate equipment/tools.

n oun og s c

Marketing & Sales

Outbound

Logistic

Operations

Service

Technicians

Worker

Market

requirements

Planning andmanufacturing of

high precisemachine tools for

niche markets



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VolvoHonda

Honda's expertise is in engines. Honda

was able to exploit the core competency

to develop a variety of quality products

from lawn mowers and snow blowers to

trucks and automobiles. With more than

Volvos core competency is safety. Their

core competency is about their ability to

source and design high protection

components and to research and respond

to market demands concerning safety. The


built each year, Honda is the largest

engine-maker in the world.

developments in safety that car buyers can

enjoy in the future.

Lessons learned: Corporate Assessment 1(3)


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The six steps approach of innovation management considers thetopics as follows: assessing the strengths and weaknesses of thecompany, identifying future opportunities, developing an innovationstrategy, implementing an innovation process and organization, ideamanagement and implementing and controlling innovations.

Market segmentation is the process of dividing a market into distinctsubsets (segments) that behave in the same way or have similar


.concentrate the development on the specific requirements of these

customer.

Business structuring is the process of analyzing the as-is situationof the company on the basis of the results of the marketsegmentation answering the question: Where to compete?

The main tool for structuring the business is the Product-Market-Matrix with the opportunity to develop business areas and toidentify strengths and weaknesses in each business area.



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The basic idea of the portfolio analysis to represent and analyze thebusinesses of the company within a simple graphic framework thatcan be used to assist the corporate assessment .

The goal of the market portfolio is to analyze the as-is position of

products and business areas and therefore to prepare the decisionwhich businesses should receive more or less investment.

The oal of the technolo ortfolio is to anal ze the technolo ical


position of products, to examine individual technologies or

technology categories and to give indications on the reallocation ofresources.

A companys innovation strategy depends on the position of itsinnovation within the S-Curve. The S-Curve is used to describe how

new technology is adapted. According to the rate of technologicalprogress there are pace setter techn., key techn. and basis techn.

Success factors define key areas of performance that are essential forthe company to accomplish its mission. The success factor portfolioclarifies the main points of differentiation to the competition.


B h ki i h f d i i h i h b h


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Benchmarking is the process of determining who is the very best, whosets the standard, and what that standard is. It is a process in whichorganizations evaluate various aspects of their processes in relationto best practice covering three levels of applications: benchmarkingwith direct competitors on company level, benchmarking with direct

competitors on process level and benchmarking with business unitsof the same company (peer group) on process level.

Benchmarking is a powerful management tool because it overcomes


"paradigm blindness. Paradigm Blindness (frog perspective) can be

summed up as the mode of thinking, "The way we do it is the bestbecause this is the way we've always done it.

The core competence model (CC) is an inside-out model that starts theassessment process by thinking about the core strengths of anorganization. Core competences are distinctive internal skills, knowhow and knowledge in all functions of the value added chain.

Core competences give potential access to a wide variety of markets,give significant contribution to the competitiveness of the companyand are difficult for competitors to imitate.

Christian J. BrusziesIng. Industrial, MBA


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