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Differentiating the CustomerExperience in a Teardown Economy                        March 15, 2011   Slide 1
MiG 25 Pilot Defects Soviet Union                   Viktor Belenko - September 1976                                  March...
MiG 25 – The Teardown                        Reverse engineering has                          been used by military       ...
In a German Biergarten…                   Gizmodo publishes photos                   of Apple iPhone 4 prototype          ...
Shanzhai Beats Apple to Market                        The “HiPhone” and                       “Blockberry” are very       ...
A Competitive Advantage?               Unit Sales in Millions                                                     Shanzhai...
Tablet Explosion   Apple iPad    Samsung Galaxy   SONY VAIO                       The iPed Motorola XOOM      HP Slate    ...
iPed Now Available on Amazon?                         Source: www.amazon.com – February 28, 2011                         M...
The Teardown Specialists•   Technology & Market Assessment   • Market Research for Consumer•   Formulate IP Strategy      ...
Competitive Analysis       Integrated        Packaging     Circuit Design        Design        & Layout          Analysis ...
Trends Impacting Differentiation                              March 15, 2011   Slide 11
Self-Repair                         • Most consumer devices lack                           repair instructions or parts   ...
Open Source Hardware                          • Schematics, bill of materials, Printed                            Circuit ...
Growth of Open Source HardwareNumber of Open Source Hardware Projects                                                     ...
Contract Manufacturer Evolution                      HTC - From Contract                    Manufacturer to Competitor    ...
Differentiation – Beyond Products                             March 15, 2011   Slide 16
How to Compete                                   94% of                                Respondents                        ...
Competitive Advantage                                        Dell• Just In Time    • Vertical        • Build-to-          ...
2010 – Year of ShortagesAverage Lead Times for Components (April 2010)SRAM                                       8-16 Week...
New Precious CommoditiesSource: www.isuppli.com (July 2010)                                      March 15, 2011   Slide 20
Kinect In High Demand                        Top-selling accessory                        item in terms of dollar         ...
High Tech Channel Checks                                                                                  Violations of no...
Customer Process Requirements                          March 15, 2011   Slide 23
Corporate Social Responsibility           Greenhouse Gases                                                                ...
Corporate Social ResponsibilitySource: STMicroelectronics Corporate Responsibility Report 2009                            ...
Labor and Human Rights                         • Recruitment - foreign workers                           who pay excess fe...
Apple Supplier Code of ConductSource: Apple Supplier Responsibility Progress Report 2011                                  ...
Importance of CSRSource: Eye for Transport - High Tech & Electronics State of the Industry Report (2010-2011)             ...
Customer Business Requirements                          March 15, 2011   Slide 29
The Customer Relationship     Customers are Growing Larger          and More Powerful   Buyer                        Suppl...
The Key Challenge   Every Large Company Approaches      Supply Chain Processes &    Technologies in a Different Way  Suppl...
Purchase Orders in High TechSource: EIDX/CompTIA - Purchase Order Business Fundamentals                                   ...
Customer Process VariabilityForecasting             Orders             Logistics                 SettlementPlanning Foreca...
Customer Technology Requirements                          March 15, 2011   Slide 34
Quest for EfficiencyBuyer’s View                                                                               Supplier’s ...
Two Views on ComplexityChallenge                    Opportunity                          March 15, 2011   Slide 36
Differentiating with B2B  89% of Respondents     Agreed that  Flexibility of our B2B e-Commerce program Enables  us to Dif...
Questions                  Steve Keifer                  Vice President            Product & Industry Marketing           ...
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Differentiating customer experience in a Teardown economy

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This presentation was delivered by Steve Keifer of GXS at the 113th EDIFICE Plenary in Paris, France in March 2011.

Published in: Business

Differentiating customer experience in a Teardown economy

  1. 1. Differentiating the CustomerExperience in a Teardown Economy March 15, 2011 Slide 1
  2. 2. MiG 25 Pilot Defects Soviet Union Viktor Belenko - September 1976 March 15, 2011 Slide 2
  3. 3. MiG 25 – The Teardown Reverse engineering has been used by military organizations since the Second World War and extensively during Cold War Used by militaries in order to copy other nations technologies, devices or information Used by commercial organizations for competitive advantage March 15, 2011 Slide 3
  4. 4. In a German Biergarten… Gizmodo publishes photos of Apple iPhone 4 prototype found in Silicon Valley bar March 15, 2011 Slide 4
  5. 5. Shanzhai Beats Apple to Market The “HiPhone” and “Blockberry” are very popular in China March 15, 2011 Slide 5
  6. 6. A Competitive Advantage? Unit Sales in Millions Shanzhai can bring new180 phone to market in as little as 45 Days using System on160 Exports a Chip technology140 In China 10% of Worldwide Mobile120 Phone Sales100 60% Exported from China 80 Advantages of Shanzhai 60 • No Market Research 40 • No Product Design • No Testing & QA 20 • No Licensing or Taxes 0 • No Inventory 2005 2006 2007 2008 2009 • No Sales Force or Stores Source: Stanford Graduate School of Business and Hong Kong University of Science and Technology – Shanzhai Mobile Phone Companies – The Guerilla Warfare of Product Development and Supply Chain Management Source: http://www.shanzhaiji.cn/talk/20081202/6216.html March 15, 2011 Slide 6
  7. 7. Tablet Explosion Apple iPad Samsung Galaxy SONY VAIO The iPed Motorola XOOM HP Slate RIM Playbook Cisco Cius March 15, 2011 Slide 7
  8. 8. iPed Now Available on Amazon? Source: www.amazon.com – February 28, 2011 March 15, 2011 Slide 8
  9. 9. The Teardown Specialists• Technology & Market Assessment • Market Research for Consumer• Formulate IP Strategy Electronics, Telematics, Semiconductor• Establish IP Position • Teardown Analysis• Defend, Leverage IP Business • Device-Specific Application Forecasts• IP Monetization March 15, 2011 Slide 9
  10. 10. Competitive Analysis Integrated Packaging Circuit Design Design & Layout Analysis Bill of Device or Materials & SystemCost Analysis Functionality Software Fabrication Reverse Process Engineering Analysis March 15, 2011 Slide 10
  11. 11. Trends Impacting Differentiation March 15, 2011 Slide 11
  12. 12. Self-Repair • Most consumer devices lack repair instructions or parts • Offer step-by-step instructions with photos • Wiki style approach to repair manuals with community of contributors edits • Guides for Macs, PCs, game consoles, phones, tablets, cameras, appliances • Storefront to sell parts - Apple, Nintendo, Sony, MicrosoftSource: www.ifixit.com March 15, 2011 Slide 12
  13. 13. Open Source Hardware • Schematics, bill of materials, Printed Circuit Board (PCB) layout and software are released with free and open source model • Allow for modification and redistribution of design files • Allow manufacture, sale, distribution and use of devices from design • Categories include video games, microprocessors, computer systems, home energy management • Services to prototype, manufacturer and distributeSource: www.arduino.com March 15, 2011 Slide 13
  14. 14. Growth of Open Source HardwareNumber of Open Source Hardware Projects • Open Source Hardware350 market predicted to be300 $1B in 2015250 • Over 13 companies with $1M in revenues,200 many approaching $5M150 • Over 200 projects today, passing 300 in100 2011 50 • Will it expand beyond hobbies to commercial 0 hardware? 2006 2007 2008 2009 2010 2011 Source: Make Magazine March 15, 2011 Slide 14
  15. 15. Contract Manufacturer Evolution HTC - From Contract Manufacturer to Competitor Less than 10% of Revenues are from ODMs March 15, 2011 Slide 15
  16. 16. Differentiation – Beyond Products March 15, 2011 Slide 16
  17. 17. How to Compete 94% of Respondents Agree Increasingly companies will compete as much through superior processes and service solutions as through superior productsMartin Christopher Source: Enhancing Customer-Centric Supply Chains – SCMWorld (October 2010)Emeritus ProfessorMarketing and Logistics March 15, 2011 Slide 17
  18. 18. Competitive Advantage Dell• Just In Time • Vertical • Build-to- • Club Card & Manufacturing Integration Order POS Data Sharing• Kanban • Nearshore • Direct to Production Consumer • Cross-• Supplier Docking Relationship • POS-Based • Online Management Replenishment Demand • Factory Shaping Gate Pricing Differentiation Comes from Process & Approach March 15, 2011 Slide 18
  19. 19. 2010 – Year of ShortagesAverage Lead Times for Components (April 2010)SRAM 8-16 WeeksFlash NAND 8-16 WeeksUSB, UART 4-20 WeeksCapacitors 12-42 WeeksConnectors 8-16 WeeksSolid State relais 4-22 WeeksDiscrete 12-26 WeeksComponentsSource: Wall Street Journal (April 2010) March 15, 2011 Slide 19
  20. 20. New Precious CommoditiesSource: www.isuppli.com (July 2010) March 15, 2011 Slide 20
  21. 21. Kinect In High Demand Top-selling accessory item in terms of dollar sales on a year-to-date basis 8M units sold in 2010 as compared to 5M forecasted 1M units sold in first 10 days March 15, 2011 Slide 21
  22. 22. High Tech Channel Checks Violations of non-disclosure agreements to share secrets Apple iPhone forecasts and plans in exchange for cash US SEC Arrests four employees of high tech manufacturers and expert network consultants for Insider Tradinghttp://www.cnbc.com/id/40697535/Four_More_Arrests_Are_Made_In_Federal_Insider_Trading_Probe March 15, 2011 Slide 22
  23. 23. Customer Process Requirements March 15, 2011 Slide 23
  24. 24. Corporate Social Responsibility Greenhouse Gases Equal Opportunity Practices Conservation and Biodiversity Environmental Supplier Small Businesses Local Sourcing Waste Management Responsibility Diversity Product Corporate Fair Labor Social Quality Responsibility Practices ReportingConsumer Product Safety Child/Forced Labor Laws Product Recall History Occupational Safety Traceability Procedures Maximum Work Hours Ethical Financial Business Annual & Quarterly Results Transparency Antifraud Controls Practices Corporate Governance Know Your Customer Political Activity Disclosure Incident/Legal Disclosure March 15, 2011 Slide 24
  25. 25. Corporate Social ResponsibilitySource: STMicroelectronics Corporate Responsibility Report 2009 March 15, 2011 Slide 25
  26. 26. Labor and Human Rights • Recruitment - foreign workers who pay excess fees • Underage - minimum employment age was 16 • Waste – non-certified hazardous waste disposal companies • Overtime –workers exceeded maximum work weekly limits • Wages – paid less than minimum wage for regular working hours • Benefits – deficient payments for sick leave, maternity • Deductions –of wages for disciplinary purposes • Discrimination –pregnancy tests prior to employment • Safety – not wearing protective equipment March 15, 2011 Slide 26
  27. 27. Apple Supplier Code of ConductSource: Apple Supplier Responsibility Progress Report 2011 March 15, 2011 Slide 27
  28. 28. Importance of CSRSource: Eye for Transport - High Tech & Electronics State of the Industry Report (2010-2011) March 15, 2011 Slide 28
  29. 29. Customer Business Requirements March 15, 2011 Slide 29
  30. 30. The Customer Relationship Customers are Growing Larger and More Powerful Buyer Suppliers March 15, 2011 Slide 30
  31. 31. The Key Challenge Every Large Company Approaches Supply Chain Processes & Technologies in a Different Way Suppliers Must Contend with Rising Complexity and Customization from Large Accounts March 15, 2011 Slide 31
  32. 32. Purchase Orders in High TechSource: EIDX/CompTIA - Purchase Order Business Fundamentals March 15, 2011 Slide 32
  33. 33. Customer Process VariabilityForecasting Orders Logistics SettlementPlanning Forecast Catalog Order Ship to Factory Supplier Invoice Confirming Order Ship to Warehouse Self-Billing Simple Forecast Spot-Buy PO Ship to Store Invoice DiscountingMaterial Release Blanket PO Drop Ship Receivables Factoring Schedule Evergreen Order Home Delivery Supply Chain Finance Consumption Standing PO Merge-in-Transit Open Account Schedule Build-to-Order Consolidation Letter of Credit Order Forecast Configure-to-Order Documentary Cross-Docking Collection Mix/Aggregation Drop Ship Order Late Stage Forecast Debit Transfer Internal Order Configuration & Credit TransferDelivery Forecast Postponement Work Order Wire Transfer Rolling Forecast Job Order Procurement Card Service Order Cheque Build Plan Repair Order Warranty Order March 15, 2011 Slide 33
  34. 34. Customer Technology Requirements March 15, 2011 Slide 34
  35. 35. Quest for EfficiencyBuyer’s View Supplier’s View Electronics Retailer One Many Standardised Customized Supply Chain Supply Chain Processes & Processes & Technology Technologies OEM 1 OEM 2 OEM 3 For each How many Supplier Supplier Supplier Supplier Supplier Euro of are lost oncosts saved customeron standard- facing isation complexity? Lower Tier Suppliers March 15, 2011 Slide 35
  36. 36. Two Views on ComplexityChallenge Opportunity March 15, 2011 Slide 36
  37. 37. Differentiating with B2B 89% of Respondents Agreed that Flexibility of our B2B e-Commerce program Enables us to Differentiate from Competitors on Service March 15, 2011 Slide 37
  38. 38. Questions Steve Keifer Vice President Product & Industry Marketing http://blogs.gxs.com/keifers Twitter: @EDInomics March 15, 2011 Slide 38

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