Automotive Industry Study Use of Industry Associations and Analysts in Supplemental Reporting Susan...

Automotive Industry Study

Use of Industry Associations and Analysts in Supplemental Reporting

Susan M. Hinds, CEO & President

© 2004 STRATEGIC MANAGEMENT HARMONY, LLC

Scope of Analysis- Key Players

JD Powers

The Harbour Report

Analyst

PWC Global Review

Internal Management

Industry Associations

Supplemental Information Sources


Key Success Factors Auto Industry

QUALITY

COST

SERVICE

DESIGN

KEY SUCCESS FACTORS

JD Powers, Harbour Assoc, Industry Hawks, Internal Mgmt.

Internal Mgmt, Harbour,Industry Hawks

JD Powers,Internal Mgmt.

JD Powers, RL Polk

WHO MEASURES THIS


JD Powers and Associates“The Voice of the Customer”

Proprietary Research

J.D. Power and Associates conducts custom research and customer

satisfaction measurement and tracking on a proprietary basis. Clients gain access to

weekly, monthly, or quarterly data to measure their performance over time and

identify areas for improvement. Proprietary services include: quality

tracking; sales tracking; retailer quality audits; customer satisfaction tracking; and certification programs to ensure

compliance with predetermined industry benchmark standards

INDUSTRIES SERVED- Automotive - Boats - Travel- Finance/Ins - Telecom - Homes- Healthcare

Founded in 1968, global marketing info. services firm focused on helping businesses & consumers make better decisions through credible, meaningful, and easily accessible customer-based information.


JD Powers Awards

AUTOMOTIVE FOCUS- New-vehicle quality - The shopping experience- Sales satisfaction - Service satisfaction- Brand loyalty - Online consumer behavior - Emerging technologies - Component quality- Long-term durability - Collision repair

JD Powers surveys millions globally & provides awards:•Information is compiled into rankings on product quality, customer satisfaction, and industry-specific metrics•Highest ranking companies can license the use of name•The award program provides consumers better information in their purchasing decisions


The Harbour Annual Report “The Voice of Manufacturing”

James HarbourChairman & Founder

Ron HarbourPresident

Harbour Consulting Inc.- Founded 1980, internationallyrecognized mfg. & mgmt. consulting firm focused onImproving competitiveness of mfg. companies by:•Lean Business Operations•Product & Process Development•Cooperative Benchmarking Studies•Competitive Research

The Harbour Report- A guide to competitive analysis:•Comprehensive analysis of Auto Manufacturing•Data supplied directly by each mfg (KPI & process)•Strengths & Weaknesses by company•Key Performance Indicators & strategic analysis•Major causes of profit variation by manufacturer


Voluntary Benchmarking Process-All Major Players Participate


Harbour and Associates Role


Global Automotive Financial Review Annual Report

PricewaterhouseCoopers has published its fourth annual Global Automotive Financial Review providing an overview of automotive industry trends and financial reporting practices. The report is based primarily on information from the annual reports and Form 10ks for fiscal years ending during 2000 and early 2001 for leading manufacturers and automotive suppliers around the world. The Review includes 4 articles summarizing (1) major trends which influenced financial results in the industry; (2) movement toward value reporting; (3) challenges and solutions for sustainability in the industry; and (4) the continued focus on shareholder value. The Review also presents a series of charts and graphs highlighting important ratios and performance metrics used by industry executives and analysts, as well as quotes from industry chairmen on topics such as e-business transformation, economic and market forces, strategies for success, enhancing shareholder value, and predictions.


Industry Associations

Lacks integration & standards


Analyst Community Space DaimlerChrysler AG (DCX) Example

Date Research Firm Action From To

17-May-04 Prudential Downgrade Neutral Underweight

26-Apr-04 Lehman Brothers Upgrade Underweight Equal-weight

4-Jun-03 JP Morgan Downgrade Overweight Neutral

4-Jun-03Smith Barney Citigroup

Downgrade In-line Underperform

19-Mar-03 UBS Warburg Downgrade Neutral Reduce

31-Jan-03Banc of America Sec

Initiated Neutral

18-Jul-02 Bernstein Upgrade Mkt Perform Outperform

12-Jul-02 UBS Warburg Upgrade Reduce Hold

29-Jan-02 Bear Stearns Initiated Neutral

8-Jan-02 Salomon Smth Brny Downgrade Outperform Neutral

RECOMMENDATION TRENDS

Data provided by Thomson/First Call

Current

Month

Last Mont

h

Two Mont

hs Ago

Three

Months

Ago

Strong Buy

3 3 3 3

Buy 0 1 1 0

Hold 2 2 2 6

Sell 2 2 2 1

Strong Sell

1 1 1 1

LacksIndependence


Company’s Internal Management“Profitless Prosperity” MindsetKey Industry Concerns: Global Platforms, Hyper-Competition, Incentive Wars,Consolidation, Disruptive Technology (Alt. Fuel), Outsourcing, Productivity

EXISTING INFRASTRUCTURE- VARIES BY COMPANY• 5 year plans linked to annual budget• Annual budget linked to KPI’s linked to incentive systems• Business planning & competitive intelligence• Benchmarking studies• Continuous Improvement goals and measurement systems• Business process reengineering & IT deployment• Cost accounting (process focused)• Lean accounting (used in some OEM’s)• CRM & Market Studies• Risk management systems• Capacity & Utilization forecast/measurements systems


EBR Impact & Positioning

JD Powers-Lacks critical issues focus-Market confusion on interpreting measurements-Lacks standards/definitions-Data ownership/entrenched

The Harbour Report-Lacks independent assurance-Enables mfg not investor decisions-Data ownership/entrenched

Analyst-Lacks independence-Confusing analysis -Inconsistent opinionsamong analyst groups-Subjective interpretation& extrapolation

PWC Global Review-Lacks market segment analysis-Macro view mfg-KSF not the focus-Sales focus missing

Internal Management-Need standard benchmarks-Industry paying for excess-Comparability/Segments-Continuous improvement

Industry Associations-Fragmented niche players-Opinion shopping-Lacks integration-Costly duplication

EBRFrameworkIntegrationStandardsGuidelines

MeasurementsXBRL enabled


INDUSTRY ANALYSIS

Target industries with a specific reason (Filter Criteria: In Pain, Proactive Leadership, Public Comments, Commercial Viability, Regulation Target, Large Institutional Investors)

Analyze the infrastructure that exists Understand & identify where gaps exist and where

EBR helps/adds value Sell the target audience from their perspective

Target Analyze Understand Sell


Automotive Industry Study Use of Industry Associations and Analysts in Supplemental Reporting Susan...

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