Successfully reported this slideshow.

Elia Together Berlin

3

Share

Upcoming SlideShare
Session 9
Session 9
Loading in …3
×
1 of 80
1 of 80

Elia Together Berlin

3

Share

Download to read offline

The Business Side by Richard Brooks.

This presentation is an insightful and honest look into the world of business management. I’ll cover the key concepts professional managers look at when running a language service company (or any other services business). My aim is to bridge the gap between language service companies and freelance translators by promoting a better understanding of ‘our side’, which helps everyone to create more value in the content supply chain and to extract more of that value.

The Business Side by Richard Brooks.

This presentation is an insightful and honest look into the world of business management. I’ll cover the key concepts professional managers look at when running a language service company (or any other services business). My aim is to bridge the gap between language service companies and freelance translators by promoting a better understanding of ‘our side’, which helps everyone to create more value in the content supply chain and to extract more of that value.

More Related Content

Related Books

Free with a 14 day trial from Scribd

See all

Related Audiobooks

Free with a 14 day trial from Scribd

See all

Elia Together Berlin

  1. 1. #eliatogether The Business Side Richard Brooks K International Ltd 24 February 2017 9:25am Berlin, Germany
  2. 2. Richard Brooks uk.linkedin.com/in/richardbrooks twitter.com/@RichardMBrooks plus.google.com/+RichardBrooks_L10N 0044 1908 557900 Richard.Brooks@k-international.com www.k-international.com Hello/Hallo #eliatogether
  3. 3. #EliaTogether16 “The best talk in Berlin since JFK. #IchbineinBerliner #eliatogether” #eliatogether @RichardMBrooks #L10n #i18n #CAT #MT #xl8 #t9n #localisation #translation #language #berlin #germany “OMG. This is the best presentation of all time #eliatogether #awesome” “#eliatogether please invite @RichardMBrooks back next year” “I think even some of his jokes were new #originalcontent #eliatogether”
  4. 4. And you know when I'm down to just my socks. What time it is… It's business time https://www.youtube.com/watch?v=AqZcYPEszN8
  5. 5. #EliaTogether16 Come to the Dark Side… We have cookies.
  6. 6. #EliaTogether16 The Business Side • Brand • Strategy • Pricing • Market Forces • Value • And many more…
  7. 7. Strengths Opportunities Weaknesses Threats Located in UK From outside the UK Not be located in UK Located in UK Brexit Brexit Brexit Brexit More nonsense More nonsense More nonsense More nonsense Stupid Waste Of Time
  8. 8. • PEST(LE) Analysis • Porter’s Five Forces • Resource Based View • Business Model Canvas • Strategy Canvas Tools that Actually Work
  9. 9. If you know your enemies and know yourself, you will not be imperiled in a hundred battles... if you do not know your enemies nor yourself, you will be imperiled in every single battle. - The Art of War, Sun Tzu http://classics.mit.edu/Tzu/artwar.html customers projects… customers project.
  10. 10. Use these tools to help you and your customers create higher sustainable profits.
  11. 11. You P&L, marketing, sales, debts, development, leadership, HR, finance, technology… and a load of other stuff. Industry Stuff Wider Economic Influences
  12. 12. Political Economic Social Technology Legislation Environmental P.E.S.T.E.L. Political factors • Stability of government • Social policies: (e.g. social welfare etc.) • Trade regulations: (e.g. the EU, TPP, NAFTA) • Tax policies • Entry mode regulations Economic factors • Disposable income of buyers (B2C) • Credit accessibility • Unemployment rates • Interest rates • Inflation Social Factors • Population demographics: (e.g. aging population) • Distribution of Wealth • Changes in lifestyles and trends • Educational levels Technological factors • New innovations and discoveries • Pace of technological innovations and advances • Pace of technological obsolescence • New technological platforms Environmental factors • Environmental protection laws • Waste disposal laws • Energy consumption regulation • Popular attitude towards the environment Legal factors • Employment regulations • Competitive regulations • Health and safety regulations • Product regulations
  13. 13. Environmental Analysis PESTLE Framework Political Environmental Social Technology Legislation Economic • Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam erat volutpat. • Ut wisi enim ad minim veniam, quis nostrud. • Exerci tation ullamcorper suscipit lobortis nisl ut aliquip ex ea commodo consequat. • Duis autem vel eum iriure dolor in hendrerit in vulputate. • Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam erat volutpat. • Ut wisi enim ad minim veniam, quis nostrud. • Exerci tation ullamcorper suscipit lobortis nisl ut aliquip ex ea commodo consequat. • Duis autem vel eum iriure dolor in hendrerit in vulputate. • Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam erat volutpat. • Ut wisi enim ad minim veniam, quis nostrud. • Exerci tation ullamcorper suscipit lobortis nisl ut aliquip ex ea commodo consequat. • Duis autem vel eum iriure dolor in hendrerit in vulputate • Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam erat volutpat. • Ut wisi enim ad minim veniam, quis nostrud. • Exerci tation ullamcorper suscipit lobortis nisl ut aliquip ex ea commodo consequat. • Duis autem vel eum iriure dolor in hendrerit in vulputate. • Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam erat volutpat. • Ut wisi enim ad minim veniam, quis nostrud. • Exerci tation ullamcorper suscipit lobortis nisl ut aliquip ex ea commodo consequat. • Duis autem vel eum iriure dolor in hendrerit in vulputate. • Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam erat volutpat. • Ut wisi enim ad minim veniam, quis nostrud. • Exerci tation ullamcorper suscipit lobortis nisl ut aliquip ex ea commodo consequat. • Duis autem vel eum iriure dolor in hendrerit in vulputate. Share this as a google doc with your team. Free template download here >>> https://docs.google.com/document/d/1t 8SQkw7xrjLrJaxtNZY5tJVD6AHgQymY BRfAGMSv7e4/edit?usp=sharing
  14. 14. Industry Analysis Porter's five forces of competitive position Threat of New Market Entrants Threat of Substitute Products Rivalry within the Industry Bargaining Power of Buyers Power of Suppliers Porter, M.E. (March–April 1979) How Competitive Forces Shape Strategy, Harvard Business Review. How many customers are there? What’s the size of each order? Is there a difference between competitors? Is the market driven by price? Can we substitute the product/service? What is the cost of changing suppliers? How many suppliers are there? Do they talk to each other? What is the size of suppliers? Is the service unique? Can we substitute this service? What is the cost of changing? What is the time and cost of entry? Do you need specialist knowledge? Are there economies of scale? Is there patent or technology protection? What are the barriers to entry?
  15. 15. Bargaining Power of Suppliers Suppliers are POWERFUL if... • There is a credible forward integration threat by suppliers. • Suppliers are concentrated. • There is a significant cost to switch suppliers. • The customers are powerful. Suppliers are WEAK if... • The product is standardized. • There are many competitive suppliers. • They are supplying commodity products. • There is a credible backward integration threat by purchasers. • There are concentrated purchasers. • The customers are weak. What does the bargaining power of translators in our industry look like?
  16. 16. Bargaining Power of Customers Customers are POWERFUL if... • There are a few buyers with significant market share. • Buyers purchase a significant proportion of the output. • Buyers possess a credible backward integration threat. Customers are WEAK if... • Producers can threaten forward integration, taking over customers’ position. • There are significant buyer switching costs. • There are many customers – significant influence on a particular product or price is small. • Producers supply critical portions of the customers’ input What does the bargaining power of LSPs in our industry look like?
  17. 17. Resource Based View • Looks internally at a firm’s Resources (and Capabilities and Competences) and how these can be arranged to deliver sustainable competitive advantage. • Often used as a response to the Environment (PESTLE) and Industry (5 Forces) Analysis. • Resources that are simultaneously Valuable, Rare, Imperfectly Imitable and Non-Substitutable deliver sustainable competitive advantage. • Look for these in your competitors businesses… Look for resources you have that are rare and try and add value to them. Barney, J.B. (1991). "Firm Resources and Sustained Competitive Advantage". Journal of Management.
  18. 18. Quick win. Find something rare and add value to it.
  19. 19. Business Model Canvas
  20. 20. Customer Segments Who is your customer? What market segments are you providing a service/product for?
  21. 21. What value do we deliver to your clients? or To your client’s supply chain? Is it based on > performance, brand, value, convenience, price… Value Propositions
  22. 22. Channels to Market How are you going to get your product/service to your clients? Is it virtual? Or is it a physical product? Are our channels integrated into our client’s supply chain?
  23. 23. Customer Relationships For each segment… what is the relationship like? Is it transactional, self-service, account/relationship managers, is there a community?.
  24. 24. Revenue Streams What value are our customers willing to pay for? Per unit charge, hourly, subscription, licenses, leasing. Price discrimination or fixed price.
  25. 25. Key Resources What key resources do we need for the right hand side? Are they human, intellectual, financial or physical.
  26. 26. Key Activities The most important actions needed to make your business model work. e.g. problem solving (for consultants).
  27. 27. Key Partnerships Who do you need as your key partners. Used to optimise your business model, reduce risk or acquire resources.
  28. 28. Cost Structure Describes all costs involved in operating a business model. Is this business… cost driven, value driven, % of fixed and variable costs and are there economies of scale/scope?
  29. 29. Is translation a commodity?
  30. 30. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. Commodity Good? from Investopedia.com
  31. 31. Is translation a commodity?
  32. 32. No it ******* isn’t. But if you differentiate yourself on price what do you expect to happen? And… more importantly – it’s in the interests of those buying this service to buy it as a commodity (see five forces).
  33. 33. Pretium = Price Pretium = Value The thinking in 10 B.C. Price = Value The problem in 2017 A.D. Price ≠ Value Pretium
  34. 34. … 4G is “the communications equivalent of the change the jet engine made over steam” >>> Inability to monetise value creation Olaf Swantee, CEO EE 3G 1GB £31 4G 1GB £26 When Value > Price
  35. 35. Becky Williams M&S Apology When Price > Value >>> lack of understanding of an emotive reaction to a small price change
  36. 36. • The last time you met an Accountant? • The last time you met someone from procurement (or vendor management)? • The last time you met someone from the pricing department? Rich ponders…
  37. 37. Of all the 7 Ps Price has the single most immediate effect on the bottom line.
  38. 38. Effect of Increasing Prices 5% 10% 15% 20% 25% 30% 35% 40% 50% 1% 17% 9% 6% 5% 4% 3% 3% 2% 2% 2% 29% 17% 12% 9% 7% 6% 5% 5% 4% 3% 38% 23% 17% 13% 11% 9% 8% 7% 6% 4% 44% 29% 21% 17% 14% 12% 10% 9% 7% 5% 50% 33% 25% 20% 17% 14% 13% 11% 9% 7.5% 60% 43% 33% 27% 23% 20% 18% 16% 13% 10% 67% 50% 40% 33% 29% 25% 22% 20% 17% %priceincrease Existing Gross Margin % The sales volume decrease which will maintain the existing Gross Margin. EG You can put prices up by 5% and sell 20% less if your Gross Margin is 20%.
  39. 39. Let’s Check the Maths Unit Price €100 Number sold 50 Gross Margin per unit €20 Total Gross Margin €1000 Unit Price €105 Number sold 40 Gross Margin per unit €25 Total Gross Margin €1000 Price up 5%. Sales down 20%Existing Position
  40. 40. Effect of Discounting 5% 10% 15% 20% 25% 30% 35% 40% 50% 1% 25% 11% 7% 5% 4% 3% 3% 3% 2% 2% 67% 25% 15% 11% 9% 7% 6% 5% 4% 3% 150% 43% 25% 18% 14% 11% 9% 8% 6% 4% 400% 67% 36% 25% 19% 15% 13% 11% 9% 5% 100% 50% 33% 25% 20% 17% 14% 11% 7.5% 300% 100% 60% 43% 33% 27% 23% 18% 10% 200% 100% 67% 50% 40% 33% 25% %discount Existing Gross Margin % The % amount sales need to increase to maintain the existing Gross Margin. EG If you discount by 5% and your Gross Margin is 20% you need to sell 33% more to make the same amount of Gross Margin.
  41. 41. Let’s Check the Maths Unit Price €100 Number sold 50 Gross Margin per unit €20 Total Gross Margin €1000 Unit Price €95 Number sold 67 Gross Margin per unit €15 Total Gross Margin €1005 Discount 5%. Then sell 34% more.Existing Position
  42. 42. Cost Plus. Amounts to a mark-up on costs… is widely used but rarely the most profitable. Competition driven. Amounts to using price within a game theoretic framework for strategic advantage. Customer Driven. Amounts to using price to achieve short-term sales objectives rather than profits. Value Based. Amounts to understanding the value created and then maximising its capture. Pricing Strategies
  43. 43. Cost Plus. Amounts to a mark-up on costs… is widely used but rarely the most profitable. Competition driven. Amounts to using price within a game theoretic framework for strategic advantage. Customer Driven. Amounts to using price to achieve short-term sales objectives rather than profits. Value Based. Amounts to understanding the value created and then maximising its capture. Pricing Strategies More and more academic research in this area.
  44. 44. Value = Benefits - Cost
  45. 45. REMOVE COST OR ADD VALUE Remove Cost • Machine Translation • Workflow • Translation memories • Volume • Off shore PMs • Portal • Reverse auctions and other horrors Add Value • Integrated services • Increased complexity • Key account management • Value delivery • Consultancy • Innovate your pricing model • DON’T commoditise your own product Limited by the amount of cents in the Euro. Limited by your creativity.
  46. 46. Core Cosset Supplier Defend Vigorously High Level of Service High Responsiveness Exploitable Drive Lowest Price Seek Short Term Adv. Risk Losing Supplier Nuisance Give Low Attention Lose Without Pain Development Nuture Supplier Expand Business Seek New Opportunities Value of Business Attractiveness Strategic Purchasing Based on Kraljic P HBR 1st Sept 1983. Modified by M McDonald Cranfield SOM. A version of this is used by everyone I know who works in procurement. High High
  47. 47. P&G paid $57 Billion for Gillette (in 2005) but they only acquired $6 Billion of tangible assets*. *David Haigh, Brand Finance, Marketing Magazine, 1st April 2005
  48. 48. • Better price • Higher sales • Lower prices • Better terms • Higher Search Engine Results • More partners • Better retention • Lower salary expectations • Better qualified candidates • Higher PE ratio • Lower volatility • Lower borrowing costs What does a Brand give you? Hint: It is way more than just your logo…
  49. 49. http://www.forbes.com/powerful-brands/list/#tab:rank “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.” -Warren Buffet
  50. 50. You can put lipstick on a gorilla but you still have to kiss it.
  51. 51. If you improve the sizzle you have to improve the sausage.
  52. 52. July 1925 E.K. Strong The Psychology of Selling https://babel.hathitrust.org/cgi/pt?id=uc1.$b38792;view=1up;seq=7
  53. 53. Your ProductPotential Customer Awesome person who can do amazing things. + = This isn’t what you sell This is
  54. 54. Your ProductPotential Customer + = This isn’t what you sell For the millennials Awesome person who can do amazing things. This is
  55. 55. People don't want to buy a quarter-inch drill, they want a quarter-inch hole Theodore Levitt “ ”
  56. 56. Not actually drinking.
  57. 57. + = “I just start kissing them. It's like a magnet. Just kiss. I don't even wait.” Quote Source: Adweek. October 8, 2016 What Tic Tac didn’t want
  58. 58. Suspect Prospect Customer Client Support Advocate Partner 5% increase in customer retention leads to a profit improvement of at least 25% in NPV of future earnings. - From a study by Reichheld & Sasser. Harvard Business Review. September 1990 • 96% of dissatisfied customers never complain but 90% of them never return. • ONE happy customer tells at least NINE others • 13% of unhappy customers tell at least twenty others • It takes five times as much effort, time and money to attract a new customer than it does to keep an existing one. - Source: USA White House Office of Consumer Affairs Mutually rewarding relationship where neither party intends on leaving.
  59. 59. http://hackthesystem.com/blog/why-i-hired-a-girl-on-craigslist-to-slap-me-in-the-face-and-why-it-quadrupled-my-productivity/
  60. 60. “everyday I walk in here I still can’t believe its my place… … it’s a compulsion, purely a compulsion” Monetise your passion
  61. 61. “Take care of your body. It’s the only place you have to live.” — Jim Rohn
  62. 62. #eliatogether Time for some easy questions… if we don’t get time we can extend the conversation on twitter @RichardMBrooks

Editor's Notes

  • PANDAs THUMBS
  • ×