Uploaded on

 

More in: Business , Lifestyle
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
162
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
0
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Value Propositions in B2B Markets Agenda Consumer vs. Industrial Markets Commodity vs. Specialty Industrial Markets Picking markets / applications Defining value and market needs Competitive Benchmarking Value Capture Checklist Organizational & Process Issues Summary Sudhir Hublikar Vice President of Technology AGY, Inc. Page 1
  • 2. Industrial vs Consumer Markets High Industrial Buyer Consumer Low Technical Impulsive Dependency Number of Number of Understanding Buying on Suppliers Buyers Product App’s Industrial buyers are sophisticated and use a deliberate, technical process.Source: Advanced Industrial Marketing, Inc. Page 2
  • 3. Commodity vs Specialty Industrial MarketsCommodity Semi-Specialty Specialty Market data are well documented. Market data are very limited Market segments and product needs Market segments and product needs are well understood. are very poorly understood. Competitors’ products are easily Competitors products difficult to obtained & analyzed. obtain and analyze. Product testing & qualification driven Product testing & qualification is very by industry standards. customer-specific.In specialty industrial markets, understanding market segments, customers’ product needs and competitive landscape are all significant challenges! Page 3
  • 4. Example - AGY Markets and Applications Helicopter Aerospace Aircraft Interior Reinforcement Panels Tapes Blades Thermal Industrial-Other Aircraft Cargo Liner Insulation Bazookas Defense Filtration Humvee ArmorSewing Thread Protective Fabric Auto Mufflers Printed Circuit Ignition Boards Cables Cable Electronics Automotive Timing Belts Insulation Solar Screens Insect Concrete Boards Roofing Construction Screening Understand the market but focus on the application. Page 4
  • 5. Winning Strategy For Specialty Industrial Markets Pick the right market segments/applications Understand unmet needs Know the competition Define winning value propositions Develop the right new products Page 5
  • 6. Understand You Applications Portfolio 2.0 Application 1.5 Leader Market Power Are there (Relative share) 1.0 “Performance” applications in the portfolio? 0.5 Application Follower 0.0 -5 0 5 10 15 20 25 Application Growth Rate, % CAGR Page 6
  • 7. Which Growth Strategy Do You Want to Follow? Leader Focused Leader 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 Growth Rate 0.0 0.0 Margin -5 0 5 10 15 20 25 -5 0 5 10 15 20 25 Follower Opportunistic 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 -5 0 5 10 15 20 25 -5 0 5 10 15 20 25 Page 7
  • 8. Example - AGY Application Portfolio 5.0 4.0 Market Power 3.0 (Relative share) 2.0 1.0 0.0 -4 0 4 8 12 16 Application Growth Rate, % CAGR Page 8
  • 9. Pick the Right Markets & Applications Attractiveness Criteria Market 1. 2. 3. 4. 5. 6. 7. Size of Market Market Unmet Likely Power Likelihood of Current Segments or Revenue Segment Segment Customer of Value Technical Market Sub-Segments Opportunity Growth Profitability Needs Proposition Solution Presence Marine Coatings B C B A A C C Maintenance Coatings A C B B B C C Aircraft Coatings A A B A A B B Bridge Coatings C B A A B C B Railcar Coatings B C C C A B CSource: Advanced Industrial Marketing, Inc. Page 9
  • 10. Picking Markets / Applications: Example Attractiveness Criteria Market 1. 2. 3. 4. 5. 6. 7. Size of Market Market Unmet Likely Power Likelihood of Current Segments or Revenue Segment Segment Customer of Value Technical Market Sub-Segments Opportunity Growth Profitability Needs Proposition Solution Presence Marine Coatings B C B A A C C Maintenance Coatings A C B B B C C Aircraft Coatings A A B A A B B Bridge Coatings C B A A B C B Railcar Coatings B C C C A B C A : Very Attractive B : Moderately AttractiveSource: Advanced Industrial Marketing, Inc. C : Unattractive Page 10
  • 11. Understand the Application Lifecycle Performance Phase Optimization Phase • Sale depends on one or two • Sale depends on optimization performance attributes of multiple product & service attributes • Cost is a minor factor • Cost is a major factor • Multiple materials, • Standard materials, processes processes & designs & designs • Grow with market • Steal growth from competitors • Growth rate >> GDP • Growth rate ~ GDP • Path to competitive • Path to competitive advantage advantage is clear is complex Page 11
  • 12. Defining Needs: Don’t Just Talk to Direct Customers Most firms listen only to direct customers… ApplicationAutomotive Belt Mfg AGY Cord Mfg ETiming Belt N Electronics AGY Weaver Laminator PC Board D PC Boards Shop Shop U Aerospace - AGY Weaver Component Prepregger Component Distributor SInterior Panels Mfg E Sub- Sub- R System Armor AGY Weaver Prepregger Panel Mfg Component Component Integrator Mfg Mfg Focus on decision makers and influencers. Page 12
  • 13. Finding Value in the Value Chain Example: You sell a resin used in a clear coating… which is sprayed on automotive exterior parts Your Immediate Immediate Customer’s Customer’s New Customer’s Customer’s Customer’s Customer’s Product Operation Products Operation Products Aqueous Production Clear Part Mfgr & Coated Resin of Coatings Coating Coating Parts Reduced mixing Reduced oven Higher gloss time & labor drying time levels Elimination of Elimination of More durable another ingredient solvent recovery coatings Reduced waste One coating for Better mar stream many part types resistance Higher usage Longer coating pot Fewer coating efficiency life defects Operational benefits are often Product benefits can deliver high value predictable & measurable & change the basis of competition.Source: Advanced Industrial Marketing, Inc. Page 13
  • 14. Finding Value in the Value Chain Your Immediate Immediate Customer’s Customer’s New Customer’s Customer’s Customer’s Customer’s Product Your Operation Immediate Products Immediate Operation Customer’s Products Customer’s New Aqueous Customer’s Production Customer’s Clear Customer’s Part Mfgr & Customer’s Coated Product Resin Operation of Coatings Products Coating Operation Coating Products Parts Aqueous Production Clear Part Mfgr & Coated Resin of Coatings Coating Coating Parts Reduced mixing Reduced oven Higher gloss time & labor drying time levels Elimination of Reduced mixing Elimination of Reduced oven More durable Higher gloss another ingredient time & labor solventtime drying recovery coatings levels Reduced waste Elimination of One coatingof Elimination for Betterdurable More tar stream ingredient another many part types solvent recovery resistance coatings Higher usage Reduced waste Longer coating pot One coating for Fewer coating Better tar efficiency stream life part types many defects resistance Higher usage Longer coating pot Fewer coating efficiency life defects After identifying a benefit, you must quantify it, preferably in $/yr. Example: A. Reduced B. 1.5% less C. Annual waste stream waste generated savings = $160kSource: Advanced Industrial Marketing, Inc. Page 14
  • 15. Compare With Competitive Products – Example Example: Armor Property Test Method Units Impor-1. Identify key properties, tests & tance Strain to Failure ASTM D638 % H importance, as defined by value chain Impact Resistance ASTM D6110 KJ/m2 H Tensile Strength ASTM D638 MPa M Flammability ASTM E162 sec M Density ASTM D792 g/cc M 4 S-2 Glass E Glass Carbon Aramid 32. Perform side-by-side testing against 2 competitive materials 1 0 Strain to Impact Tensile FST Density Failure Strength 0 1 2 3 4 5 6 S-2 Glass3. Generate weighted scores to E Glass understand our competitive position Carbon Aramid Page 15
  • 16. Defining New Products - Product Roadmapping Filter Life 10 9 8 7 Max Flow 6 Housing Size 5 4 3 2 1 Unit Durability Pressure Rating Our New Product Impurity Size Best Competitor Page 16
  • 17. Value Capture Checklist Value Proposition – We understand how the customer defines value – We have evaluated existing products using the customer’s definition of value – We have developed a product roadmap to exploit gaps between customer needs and existing products. – Our (new) product target better meets the customer’s definition of value Value Capture – We know how much incremental value we will generate for customers – Our pricing plan will capture a fair share of this value for our company Product Development – We have defined product specifications – We have a technical plan and understand risks – We have a marketing plan – We have defined the resources needed for success Page 17
  • 18. Organizational & Process Issues Use a simple process to focus the organization on a few key projects – Example : The AGY Idea-to-Profit Process Use multifunctional project teams to execute large projects – Co-Leaders: Commercial or Manufacturing + Technical – Have the “end-user” function be accountable for the project Use a multifunctional leadership team to manage the project portfolio Don’t give engineers more than two must-do projects Involve the (lead) customer as early as possible – Customer relationship & access is more critical than size, etc. – Co-develop with a lead customer if you are entering a new application You need to be “in” the application to really understand needs – Don’t be afraid to get a me-too version 1.0 out there Review projects thoroughly and don’t be afraid to say “No” Page 18
  • 19. Summary… Summary In specialty industrial markets, understand the market but focus on applications Analyze your applications portfolio and focus on a few applications Understand who are the decision makers and influencers in the value chain Understand how the value chain defines value Use side-by-side testing to assess yours and competitors’ products Use the Value Capture Checklist Define projects thoroughly and resource them properly Focus, focus, focus….and get something done! Page 19
  • 20. Value Propositions in B2B Markets Questions? Consumer vs Industrial Markets Commodity vs Specialty Industrial Markets Picking markets / applications Defining value and market needs Competitive Benchmarking Value Capture Checklist Organizational & Process Issues Summary Page 20
  • 21. Page 21
  • 22. AGY Idea-to-Profit Process Concept Developed by… New Business New Business Development GoodOpportunities AGY Fit? Core Business Business Teams Y Fast-track Develop Launch Y Project Product Few Projects Resources Needed? Key Develop N Develop Launch Business Approval Approval Projects Product Product Case Page 22