MBA Internship Presentation (Comm. Ops.)
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- 2. 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. 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. 4 • Metrics • Intro to Competitive Analysis Process
- 5. 5 Enhance Market Share, Mind Share & Heart Share Create a technology- driven e-catalog and troubleshooting website for 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. 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. 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. 8 Yazaki 2.9% Amphenol 2.9% Delphi 4.5% FCI 5.1% Molex 6.5% Tyco 18.7% JST 2.4% Other 57.0% Delphi 3.6% Other 52.7% Carling Tech 6.0% Eaton 12.0% EAO 12.0% Honeywell 13.7% MARKET SHARE Commercial Vehicle Market $0.5B Connector Market $28B E/EDS Market $20B 5.23B 1.82B 1.26B .81BLear1.4B 60M 30M 60M Other 37% Yazaki 21% Delphi 24.0% Sumitomo 11% Lear 7% 1.4B 2.2B 4.8B 4.2B 18M
- 9. 9 Sales Analysis Business Lines & Competitors Sales/Revenue Ranking DCS 1,260,000,000 3 TYCO 5,236,000,000 1 MOLEX 1,820,000,000 2 YAZAKI 812,000,000 4 E/EDS 4,800,000,000 1 LEAR 1,400,000,000 4 SUMITOMO 2,200,000,000 3 YAZAKI 4,200,000,000 2 DMS 17,900,000 4 EATON 60,000,000 1 CARLING TECHNOLOGIES 30,000,000 2 EAO 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. 10 2003 Sales/Revenue $ Millions 0 10000000 20000000 30000000 40000000 50000000 60000000 70000000 DMS Eaton Carling Tech EAO $ Billions 0 1000000 2000000 3000000 4000000 5000000 6000000 E/EDS Yazaki Sumitomo Lear $ Billions 0 1000000 2000000 3000000 4000000 5000000 6000000 DCS Tyco Molex Yazaki
- 11. 11 TYCO Strengths: 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. 12 MOLEX Strengths: 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. 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. 14 DCS Strategies/RecommendationsDCS Strategies/Recommendations Focuson smaller competitorswith lessthan 5% market sharein the automotivesupplier industry becausetrueinnovation usually comes from small, inconspicuouscompanies(e.g. JST, Amphenol, FCI etc.) Follow patent applications: not all patentslead to productsbut patentsstill indicateacompany’sdirection Monitor thetrend and formation of businesscontractsand strategic alliances/joint ventures(especially global ones) Incorporateaflexibleand/or variablecost structurethat focusesmoreon the relationshipswith individual OEMs(reducefixed cost baseand align capacity with changing market conditions) Revamp businessmodels, streamlineoperationsglobally and encouragenew branding of products
- 15. 15 LEAR Strengths: 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. 16 SUMITOMO Strengths: 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. 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. 18 E/EDS Strategies/RecommendationsE/EDS Strategies/Recommendations Brand Delphi’sbusinesslineswith aspecific valueproposition and product function (e.g. Lear’sIntertronics) Launch auser-friendly Asian websitefor theJapaneseand Chinese market and incorporatea global communication platform Leverageelectronic capabilities(reduceweight and size), continually integratewiring systemsand implement miniaturization and/or customization systems(Focuson 80/20 ratio) Launch innovativeadvertising campaignsto market new EDS technology and design applications Connect with R&D and find out recent changesin OEM demandsthat could alter thebusinessenvironment
- 19. 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. 20 CARLING TECHNOLOGY Strengths: 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. 21 EAO Strengths: 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. 22 DMS Strategies/RecommendationsDMS Strategies/Recommendations Penetrate anew market nicheand namesomeproductsaccording to innovativeOEM product lines(e.g. subtlereferenceto Chrysler’swinning 300 flagship Sedan) Build volumein lower cost production locationsand reducematerial cost by identifying cheaper alternativeresinsand metals Introducecorporate-widedesign implementation incentivesfor employeesthat comeup with product design patentsand/or ideas IncorporateSix Sigmaand Lean methodsto examinenew waysin which DMScan improveprocessesto eradicatewaste, defectsand variability on the manufacturing sideasopposed to focusing primarily on theengineering aspect of thebusiness Investigateemerging technologies, let go of unprofitableprogramsand promoteR&D expenditure to focuson alternatebusinesslines
- 23. 23Make DecisionsMake Decisions PresentPresent FindingsFindings Develop theDevelop the ResearchResearch PlanPlan Define theDefine the problemproblem Collect &Collect & AnalyzeAnalyze InformationInformation Delphi METHODOLOGY
- 24. 24 DRIVING TOMORROW’S TECHNOLOGY Delphi Corporation Competition OEM
- 25. 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)