German labour market & IT services
German Employment Index June 2011Source: Monster.com
Body leasing revenues 2010 GermanySource: Lünendonk- Hays 370 Mio.- Allgeier 158 Mio.- Gulp 152,4 Mio.- GFT 131,6 Mio.- Re...
German ERP market = SAP
SAP Integrators in Germany and their share of the market
Revenues of the midsized German SI`s 1,8 Billion Euro.- 27 % IT Consulting-16 % standard software projects and systeminteg...
Do you need a strategy?
Die(quickly)EffectiveIneffectiveStrategyTacticsThriveDie(slowly)SurviveInefficientEfficient
  StupidCleverA Salesperson    HardWorkingLazy
Understand the sources ofcompetitive advantage Costs Differentiation Protected nicheSuperiorpositionSuperiorresourcesSu...
Strategic positioning
Differentiation Cost LeaderNicheStrategicfocusCompetitive advantageMarketFocus on a smallersegmentCustomers perceive your ...
NicheOutstandingSuccessDisasterLowestcostHighLowHigh LowRelative costDifferentiationStrategic positioning
Choosing a path to improvecompetitive positionMcDonalds initiallydeveloped a niche in thefast-food business...Differentiat...
Choosing a path to improvecompetitive positionThe Japanese automobileindustry initially developed asa low-cost, narrow-lin...
Niche strategyThe Allied landing in Normandy was the largest amphibious invasion in history. Allied armies were greatlyout...
Differentiation and the service marketing mixfrom 4P to 7P
Capabilities and resources
The traditional professionalservices model
26Customer / market oriented SWOT AnalysisStrengths WeaknessesOpportunities ThreatsThe New Rules:Strengths andWeaknesses m...
Resources and CapabilitiesResources:• tangible and intangible assets of a firm» tangible: factories, products intangible: ...
28The VRIO FrameworkIf a firm has resources that are:• valuable,• rare, and• costly to imitate, and…• the firm is organize...
29The VRIO FrameworkValuable? Rare?Costly toImitate?Exploited byOrganization?CompetitiveImplicationsNoYesYesYesYesYes Yes ...
30International Application of the VRIO FrameworkThe International ContextTwo Reasons for International Expansion:1) to ex...
31International Application of the VRIO FrameworkThe International ContextCritical Caveat:• resources and capabilities tha...
Markets and segments -selection and strategy
Market / segment selection criteriaBusiness StrengthsMarket/segmentattractiveness- Size- Growth- Profitability- Competitiv...
Programme guidelines suggested for different positioningon the directional policy matrixInvest selectivelyin shareDifferen...
Competitive pricing strategiesHighLowHighLowOpportunitytodifferentiateOpportunity reduce costsPriceLeaderPenetrationSkimmi...
Value Drivers –Dimensions of CompetenceCustomer IntimacySUCCESSPROSPERITYOperationalExcellenceProductLeadershipSURVIVAL
Value Drivers - Internal competence dimensions(This tool is not specifically concerned with e-commerce, butit is an essent...
What is the professional services Expertsaying?Ordid we do our brainstorming well?
Professional Services Positioningper David Maister et. al.Brains (expertise) firms, which provide service to clients who w...
Professional Services Positioningper David Maister et. al.Practice-centered professionals, who see their calling as “a way...
It services, it consulting and outsourcing in central europe
It services, it consulting and outsourcing in central europe
It services, it consulting and outsourcing in central europe
It services, it consulting and outsourcing in central europe
It services, it consulting and outsourcing in central europe
It services, it consulting and outsourcing in central europe
It services, it consulting and outsourcing in central europe
It services, it consulting and outsourcing in central europe
It services, it consulting and outsourcing in central europe
It services, it consulting and outsourcing in central europe
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It services, it consulting and outsourcing in central europe

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Overview of the IT services and IT consulting market in Central Europe and a strategic guide for how to enter this attractive market.

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It services, it consulting and outsourcing in central europe

  1. 1. German labour market & IT services
  2. 2. German Employment Index June 2011Source: Monster.com
  3. 3. Body leasing revenues 2010 GermanySource: Lünendonk- Hays 370 Mio.- Allgeier 158 Mio.- Gulp 152,4 Mio.- GFT 131,6 Mio.- Reutax 130 Mio.- Harvey Nash 62 Mio.- 1st solution consulting 42, 3 Mio.- Solcom 40,7 Mio.- top itservices 38,9 Mio.- QUEST 38,9 Mio.
  4. 4. German ERP market = SAP
  5. 5. SAP Integrators in Germany and their share of the market
  6. 6. Revenues of the midsized German SI`s 1,8 Billion Euro.- 27 % IT Consulting-16 % standard software projects and systemintegration- 14 % individual software development- 7 % project management- Maintenance, outsourcing and management-consulting playeda minor role-BI, CRM, process-innovation and security are the top trends-Their most important customer segments are:- 32 % Banking and Insurance,- 21 % Industrial- 17 % Telcos- 6 % Energy, Transportation and Logistic
  7. 7. Do you need a strategy?
  8. 8. Die(quickly)EffectiveIneffectiveStrategyTacticsThriveDie(slowly)SurviveInefficientEfficient
  9. 9.   StupidCleverA Salesperson    HardWorkingLazy
  10. 10. Understand the sources ofcompetitive advantage Costs Differentiation Protected nicheSuperiorpositionSuperiorresourcesSuperiorskills Specialised knowledge Customer orientation Trade relationships Technical expertise Flexible organisation Coverage Economies of scale Financial structures Shared experiences Global / International
  11. 11. Strategic positioning
  12. 12. Differentiation Cost LeaderNicheStrategicfocusCompetitive advantageMarketFocus on a smallersegmentCustomers perceive your offer asuniqueYou have a cost advantage
  13. 13. NicheOutstandingSuccessDisasterLowestcostHighLowHigh LowRelative costDifferentiationStrategic positioning
  14. 14. Choosing a path to improvecompetitive positionMcDonalds initiallydeveloped a niche in thefast-food business...DifferentiationCost leadership…and then gained a costadvantage through volume… and subsequently rationalisedits process so as to improveproductivity while retaining itsdifferentiation
  15. 15. Choosing a path to improvecompetitive positionThe Japanese automobileindustry initially developed asa low-cost, narrow-line,average-quality competitor….DifferentiationCost leadership…and subsequentlyinvested its cost advantageinto high quality, broaderlines and more versatility
  16. 16. Niche strategyThe Allied landing in Normandy was the largest amphibious invasion in history. Allied armies were greatlyoutnumbered by the Axis, particularly during the first few days. The Axis armies, however, were spreadover thousands of miles of coastline. By concentrating the invasion on five small beaches, the Alliesdeveloped local superiority. Before the Axis could focus sufficient force on the landing grounds, the Allieshad established a beachhead and had landed sufficient forces to defend it.What can bea beachheadfor you?
  17. 17. Differentiation and the service marketing mixfrom 4P to 7P
  18. 18. Capabilities and resources
  19. 19. The traditional professionalservices model
  20. 20. 26Customer / market oriented SWOT AnalysisStrengths WeaknessesOpportunities ThreatsThe New Rules:Strengths andWeaknesses mustbe recognized bycustomersOpportunities andThreats exists inthe environment,not because of usMatchingstrategiesConversionstrategiesConversionstrategies
  21. 21. Resources and CapabilitiesResources:• tangible and intangible assets of a firm» tangible: factories, products intangible: reputation• four general categories(Financial, Physical, Human, and Organization• used to conceive of and implement strategiesCapabilities:• a subset of resources that enable a firm totake full advantage of other resources» marketing skill, cooperative relationships
  22. 22. 28The VRIO FrameworkIf a firm has resources that are:• valuable,• rare, and• costly to imitate, and…• the firm is organized to exploit these resources,then the firm can expect to enjoy a sustainedcompetitive advantage.
  23. 23. 29The VRIO FrameworkValuable? Rare?Costly toImitate?Exploited byOrganization?CompetitiveImplicationsNoYesYesYesYesYes Yes YesNoNoNo DisadvantageParityTemporaryAdvantageSustainedAdvantageEconomicImplicationsBelowNormalNormalAboveNormalAboveNormal
  24. 24. 30International Application of the VRIO FrameworkThe International ContextTwo Reasons for International Expansion:1) to exploit current resource and capabilityadvantages in a new market2) to develop new resources and capabilities ina foreign market
  25. 25. 31International Application of the VRIO FrameworkThe International ContextCritical Caveat:• resources and capabilities that generatean advantage in one market may or maynot generate an advantage in a new marketFirms should re-apply the VRIO frameworkwhen entering new markets!!
  26. 26. Markets and segments -selection and strategy
  27. 27. Market / segment selection criteriaBusiness StrengthsMarket/segmentattractiveness- Size- Growth- Profitability- Competitive intensity- Product Range- Product Efficacy- Service Quality (Including distribution)- Price- Associated Services (e.g. Technical advice)- Reputation / ImageHigh LowLowHighMaintain/manage forsustainedearningsInvest /GrowManage forCash /WithdrawSelectivelyInvest /Invest inCapabilities
  28. 28. Programme guidelines suggested for different positioningon the directional policy matrixInvest selectivelyin shareDifferentiation - lineexpansionAggressive - price forshareAggressivemarketingLimited coverageTight - but not at expenseof entrepreneurshipInvestInvestInvestFund growthInvestProductsMarket SharePriceDistributionPromotionCost ControlR & DProductionPersonnelInvestmentWorking CapitalOpportunisticdevelopmentBusiness StrengthsHigh LowLowHighMarket/segmentattractiveness
  29. 29. Competitive pricing strategiesHighLowHighLowOpportunitytodifferentiateOpportunity reduce costsPriceLeaderPenetrationSkimmingthe creamFollowtheLeader
  30. 30. Value Drivers –Dimensions of CompetenceCustomer IntimacySUCCESSPROSPERITYOperationalExcellenceProductLeadershipSURVIVAL
  31. 31. Value Drivers - Internal competence dimensions(This tool is not specifically concerned with e-commerce, butit is an essential starting point for later diagnostic tools)Customer IntimacyTargeting markets precisely andtailoring products and service tothe needs of specific customergroups, exceeding expectationsand building loyalty (e.g. Cableand Wireless)Operational ExcellenceEnabling products and services to be obtained reliably, easily and cost-effectively by customers, implying focus on business processes to outperformothers, delivering low costs and consistent customer satisfaction. (e.g. Dell,Wal-Mart, Federal Express)Product LeadershipContinuing product innovation whichmeets customer needs. This implies notonly creativity in developing new productsand enhancing existing ones, but alsoastute market knowledge to ensure theysell (e.g. Johnson and Johnson, 3M)123456789101098765432112345678910Customer IntimacyProductLeadershipOperationalExcellenceProsperitySuccessSurvival1. Score your company out of 10on your current position againsteach of these three dimensionsand join the lines up.N.B.• Score yourself 1-3 if you arecurrently below the minimumlevel required in your market• Score your 4-6 if you arecurrently as good as theaverage in your sector• Score yourself 7-10 if youcurrently exceed the averagein your sector.2. Score your company out of 10on the position you would needto attain in, say, 3 years time againsteach oftheir dimensions in order toensure your continuingprosperity.3. On a separate sheet, list some of themain strategies you will need toimplement to achieve the desiredpositions.These will be useful for completingthe next diagnostic exercises.
  32. 32. What is the professional services Expertsaying?Ordid we do our brainstorming well?
  33. 33. Professional Services Positioningper David Maister et. al.Brains (expertise) firms, which provide service to clients who wish to retain “the smartest kid on theblock”–at almost any cost. These firms give their clients new ideas.Strong-idea (brains) firms, which are organized to deliver singular expertise or innovation on uniqueprojects. The project technology of strong-idea firms flexibly accommodates the nature of any assignment,and often depends on one or a few outstanding experts or “stars” to provide the last word.Gray-hair (experience) firms, which customize ideas, but rarely are positioned at the cutting edge. Clientsof these firms recognize that the problems they themselves face have probably been dealt with by othercompanies; the client therefore seeks an organization that can offer know-how based on past experience.Strong-service (gray-hair) firms, which are organized to deliver experience and reliability, especially oncomplex assignments. Their project technology is frequently designed to provide comprehensive servicesto clients who want to be closely involved in the process.Procedure (execution) firms, which service clients who know that their problems can be handled by abroad range of firms and who are seeking a professional firm that can give them a prompt start, quickdisposition and low cost.Strong-delivery (procedure) firms, which are organized to provide highly efficient service on similar ormore-routine assignments, often to clients who seek more of a product than a service. The projecttechnology of a delivery firm is designed to repeat previous solutions over and over again with highlyreliable technical, cost and schedule compliance.
  34. 34. Professional Services Positioningper David Maister et. al.Practice-centered professionals, who see their calling as “a way of life, ”typically have as their major goal the opportunity to serve others and produceexamples of the discipline they represent. Their bottom line is qualitative: Howdo we feel about what we are doing? How did the job come out?Business-centered professionals, who practice their calling as “a means oflivelihood,” more likely have as their personal objective a quantitative bottomline, which is more focused on the tangible rewards of their efforts: How did wedo?

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