peregrim and manocchi

Commercial Development Course Overview

Commercial Development & Marketing Association Educational Foundation presents an Overview of CD 101

CDMA SPRING MEETING

ADDON WORKSHOP April 20, 2006

Presenters: Jack T. Peregrim, PARAGON Development James Manocchi, Deloitte Consulting LLP

© CDMA Educational Foundation Developed for CDMA Spring Meeting 2006 Slide 2

CDMAEF: Commercial Development & Marketing Association Educational Foundation

Agenda

4CDMAEF & CDMA relationship & background 4Course background 4Overview of all phases in full course 4Presentation of Phase 4 (Business Case) 4Q & A



4 CDMAEF is a nonprofit educational foundation focused on education in new business development.

4 There are many courses and workshops created by the foundation, including: Industrial Market Research; Cyber Competitive Intelligence; Basics of Commercial Development; and International New Business Development

Focus is on: 4 Industrial organizations such as the Chemicals/Materials or

‘Component’ type producers. 4 A wide range of implementation vehicles from technology &

product development to acquisitions.



Course Background: 4 Several decades old. Last major revision in 2001 4 Course created ‘back to front’ 4 No specific business process is advocated. (StageGate, etc.)

4 Full course offering emphasizes case studies and mentoring by multiple presenters


Functional Excellence vs. Phases5 represents critical activity

PHASES

FirstCut Qualified Quantified Business

Assessment PreLaunch Launch Commercial Post

Commercial

1 2 3 4 5 6 7 8

Strategic 5 5 5 5 5 5

Financial 5 5 5 Organizational Support &

Resources 5 5 5 5 5

Technology 5 5 5 5 5 5 5

Marketing & Sales 5 5 5 5 5 5 5

Legal & Regulatory 5 5 5 5 5 5

Operations 5 5 5 5 5

External Influencing Factors 5 5 5 5 5

Overview

Commercial Development Course Overview

Business Assessment

Phase 4 out of 8


Phase 4: BUSINESS ASSESSMENT Overviews

4Mission & Vision • Clarified mission and vision statements in clear, specific terms • Competitive advantage and value capture potential are clearly understood and have compelling supporting information

4 Strategic fit • Statement of clear value proposition • Technology meshes and can be managed successfully • Projected growth curve of new product (line) matched with corporate goals

4 Functional support and resources • Demonstration of appropriate process flow to support venture • Proposal of logical reporting framework • Outline of what is possible – manage expectations


Phase 4: BUSINESS ASSESSMENT

4 Financial issues • Funding requirements and mechanisms • Risk assessment with critical hurdles and effect on risk/certainty based on the outcomes at the critical steps

• Demonstration of timelines and desired market penetration • Clear statement of expected return on investment

4 Technical issues • Description of complementary technology • Description of possible substitution/disruptive technology • Competitive activity • S.W.O.T. on existing or expected competitive technologies • Defensive and offensive intellectual asset review • Critical mass: evaluation and project impact



4Marketing and sales • Investigate competitive, market and industry issues • Competitive advantage profile of proposed product including product positioning, distribution

• Pricing strategy • Suggested promotional approach • Targeted markets, segments • In each above identify first customers and ultimate customers (if different)

• Target customer(s) profile 4 Legal and regulatory

• Summary of patent/licensing review • Statement of EHS issues management



4 Operations • Capacity and logistics review • Supply chain analysis • Plan for technical and customer support resources

4 Organizational development Process • Outline of shared and individual services required • Suggested reporting framework



4 External Issues • Drivers

o Macro and micro trends (economy, demographics, regulatory, political, competitive, sociological, industry rationalizations, growth, dynamic change rates, disruptive technology)

o Market perspective – Rate of acceptance of new technology – Needs and market concerns (customer perspective) – Viability of Vendor

g Reputation, credentials, etc. g ISO 9000 and 14000 approvals g Reliable supplier g Technology and customer support



4 ACTIONS: • Finalize ACTIONABLE Business Plan – including final risk assessment supported by industry and customer survey


Strategic Fit – Business Case

4 This is the most critical phase for a strategic fit determination and commitment. Final determination must be made that the new business initiative meets the dual objectives of clearly fitting within the organization’s strategic intent and is optimally positioned to capture value externally.

Corporate strategic interests

Critical business success factors

Maximizing the ‘overlap’ is critical!


What 4 Finalize clear mission and vision statements about the business in specific internal terms.

4 Get top management formal commitment to the strategic value to the Company.

4 Get independent assessment of strategic value (peer reviews, external consultants).

How 4 Review impact with other initiatives in corporate portfolio. 4 Present business case to top management. 4 ‘Test’ elements of expectations with people not involved in the initiative.

Strategic Fit – Business Case


Small Group Assignment

4 Develop a Vision, Mission and High Level strategy statement for the business case distributed

4 In all the small group exercises, you will have time to discuss and develop a consensus. Please select a spokesman to present the results of your work to the rest of the class.


Financial – Business Assessment

4 Establish the financial validation of the project. Develop final business model, value proposition and estimate expected returns. Complete a risk assessment. • Develop fullyloaded financial model for the project • Fully understand project risks: commercial, technical and financial and their impact on business performance

• Develop business plans including initial pricing strategy • Identify key markets, market entry options and market penetration strategy

• Obtain management approval



4 Discuss the financial metrics that you believe will be needed at this stage for adoption by the company

4 Discuss resources required, timeline, and so forth


Organizational Support and Resources – Business Assessment

4 Primary activities are in producing two plans: • one plan is based on a business case at “steady state” or a longterm horizon

• a second plan (Development Plan) that deals with the unique resource requirements in scalingup, launch, and commercialization.



What 4 Determine optimal resources and their source. 4 Produce resource plan for the business case. 4 Recruit or confirm manager and other key personnel who will be responsible through commercialization.



How 4 Analyze data as to personnel, equipment, and other non rawmaterial resources required.

4 Determine critical success factors of personnel required both during scaleup and launch plus those required longer term.

4 Review involved personnel and recommend any changes warranted if business case is approved.

4 Create process flow charts and organizational reporting structure.

4 Determine sources of resources required: shared, owned, subcontracted, etc.


Small Group Exercise

4 Plan for success by determining the kind of resources needed for success – and how to get them. • Capital required? • Pilot plant? Timing for building the commercial plant? • …


Business Assessment Technology Issues

4 Technology Implementation Plan for Commercial Success o Proposed Technology Implementation: Complexity/Cost/Return o Intellectual Asset Review – Existing Platforms and Patents/Licenses o Critical Mass Evaluation – Core Competencies

4 Alternate Technology Impact on Market Share and GM o Competitive Technology – Market Share and Cost/Price Ratio o Potential Product Substitution o Potential Disruptive Technology



4What are the most critical technology considerations in our case study?


Business Assessment (Marketing & Sales)

4 This is the time in which gono go decisions are made. Assessments of market conditions including competitive responses must be validated and real in order to proceed. Marketing is the lead for all of this

4 Detailed business plan to be produced and shared; consensus gained

4 Critical accounts/potential significant customers to have been identified and some kind of commitment gained • Commitment to be structural • Identified as one of their projects at a relatively high level in the organization



4What kind of market confirmation will be required? • How extensive? • Geographical? • Total numbers of customer commitments? • Specific customers? • Who will get this for you? • Other


Business Assessment (Function)

4 Legal framework and in place for commercial success while EH&S issues and plans for management well framed, understood, accepted

• No showstoppers • Legal onboard • EH&S onboard

o Any TSCA or inventory requirements in place for doing business as needed – E.g., Consider all countries where it is likely that testmarketing is likely. Be ready to ship samples and orders.



4What do you see as the most critical EH & S issues that need to be researched?


Operations – Business Assessment

4 Develop a clear understanding of the operational issues associated with the new product or process. • Determine manufacturing options: buy or build • Develop product distribution and logistics options • Identify infrastructure needs

o IT support and hardware needs (e.g. EFT) • Define customer support, technical support levels needed • Evaluate manufacturing issues

o Permitting o Personnel o Site layout



4 Discuss and reach a consensus about how to • Determine manufacturing options: buy or build • Develop product distribution and logistics options • Identify infrastructure needs

o IT support and hardware needs (e.g. EFT) • Define customer support, technical support levels needed • Evaluate manufacturing issues

o Permitting o Personnel o Site layout


External Factors – Business Assessment

4 Product Implementation Plan – Responses to:

o Industry Trends – Regulatory Impact Compliance – Industry Rationalization – Economic Shifts – Technology Issues – Viability – Political Influences – Policy Impacts

o Market Trends – Level of Interest in Technology: Performance Standards – Market Opportunities Substitute and Disruptive Technologies – Vendor Viability – Performance Credibility



4What are the most critical external factors to validate and quantify?

4Which are critical but cannot be quantified and how do we manage that?

4 How would you manage the external research in our case study?


Review

4 Importance of Phase 4 4 Elements of Phase 4

4What one big idea did you learn? 4What one big concept was not covered or of which you are still unclear

4 Thank you for the opportunity to introduce our course and CDMA EF

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