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Delphi Packard Comm. Ops. Analysis
Options:
1. Sailing
2. Horse riding
3. Traveling
Driver: Mona Lisa Brookshire
Make: Clark Atlanta University
Model: Sales & Marketing
Year: 2nd Year MBA
Car # 25 - Panther
Supervisor: David Carnegie
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August 11th 2004 AGENDA
Competitive Analysis
Marketing Research
Marketing Mix (4Ps)
Consumer Insights
SWOT/Synergy Analysis
Observations & Strategies
Delphi Packard Business Lines:
•DCS•E/EDS•DMS
Delphi Packard Competitors:
--Tyco
--Molex
--Yazaki
--Lear
--Sumitomo
--Yazaki
--Eaton
--Carling Technologies
--EAO
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• Metrics
• Intro to Competitive Analysis Process
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Enhance Market Share, Mind Share & Heart Share
Create a technology-driven e-catalog and
troubleshooting websitefor customers
Leverage automotive capabilities and form strategic
business partnerships
• Quality• Cost• Responsiveness• Adherence to Schedule (Manufacturing)• Technology• Global Footprint• System Approach• Development capability and service• Innovation• Integrity, Confidence and Trust• Learning Organization• Analytical Support• On-Site Support• Time to Market• Integration (Systems, Tools & Processes)• Conformance to customer specifications• Aligned Vision
Key Differentiators & Top 3
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Market Opportunity Analysis Can the benefits of the market opportunity be articulated
convincingly to a defined target market?
Does the company possess critical capabilities and resources needed to deliver the customer benefits?
Can the company deliver the benefits better than any actual or potential competitors?
Ideal business: High Opportunities & Low threats e.g. Tyco
Speculative business: High Opportunities & Threats e.g. Yazaki
Mature business: Low Opportunities & Threats e.g. Sumitomo
Troubled business: Low Opportunities & High Threats e.g. EAO
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Market Leader-New Uses-New Users-More Usage
E/EDS AGAINST SUMITOMO
Market Challenger-Flank-Frontal-Bypass
DCS AGAINST TYCO/MOLEX
Market Follower-Innovative Imitation-Clone-Adapt
DCS AGAINST YAZAKI
Market Nichers-Customization-Service-oriented-Quality-price specialist
DMS AGAINST EATON
Proposed Initiatives
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Yazaki2.9%
Amphenol2.9%
Delphi4.5%
FCI5.1% Molex
6.5%
Tyco18.7%
JST2.4%
Other57.0%
Delphi3.6%
Other52.7%
Carling Tech6.0%
Eaton12.0%
EAO12.0%
Honeywell13.7%
MARKET SHARE
Commercial Vehicle Market $0.5B Connector Market $28B
E/EDS Market $20B
5.23B1.82B
1.26B
.81B
Lear 1.4B
60M
30M
60M
Other37%
Yazaki21%
Delphi24.0%
Sumitomo11%
Lear7%
1.4B2.2B
4.8B
4.2B
18M
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Sales AnalysisBusiness Lines & Competitors Sales/Revenue RankingDCS 1,260,000,000 3TYCO 5,236,000,000 1MOLEX 1,820,000,000 2YAZAKI 812,000,000 4E/EDS 4,800,000,000 1LEAR 1,400,000,000 4SUMITOMO 2,200,000,000 3YAZAKI 4,200,000,000 2DMS 17,900,000 4EATON 60,000,000 1CARLING TECHNOLOGIES 30,000,000 2EAO 30,000,000 2
Connector Mean/Average 2,282,000,000 Median 1,540,000,000 Max 5,236,000,000 Min 812,000,000 EDS Mean/Average 3,150,000,000 Median 3,200,000,000 Max 4,800,000,000 Min 1,400,000,000 Commercial Vehicle Mean/Avg 34,475,000 Median 30,000,000 Max 60,000,000 Min 17,900,000
SALES/REVENUE NUMBERS (2003)
SALES/REVENUE ANALYSIS (2003)
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2003 Sales/Revenue$ Millions
010000000200000003000000040000000500000006000000070000000
DMS Eaton CarlingTech
EAO
$ Billions
0
1000000
2000000
3000000
4000000
5000000
6000000
E/EDS Yazaki Sumitomo Lear
$ Billions
0100000020000003000000400000050000006000000
DCS Tyco Molex Yazaki
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TYCOStrengths:Technology driven e-catalog & online support system
Booming healthcare business allows Tyco to offset lackluster performances in other business segments
Opportunities:Affiliation with Motorola enables joint developments on smart connections systems
Consistent development of products to match the architecture of future wiring harnesses
Weaknesses:Limited customization philosophies
Quality and integration capability concerns
Threats:OEMs are moving towards Dual Source philosophy to include more than one automotive supplier at a time
Lack of emphasis on ‘recognizable’ automotive connection systems in N.A.
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MOLEXStrengths:Breakthrough in customization capabilities for system applications
Strong balance sheet with low debt-to-equity ratio provides internal funds for new investments and acquisitions
Opportunities:Acquisition of Cardell provides Molex with in-line connection system technology
New micro-connectors will enable customers to decrease package size
Weaknesses:Lack of high power applications & automotive portfolios
Several operations in recession-struck regions of North America
Threats:Limited product portfolio prevents Molex from supplying full vehicle architecture
Recent cut-backs in OEM expenditure on connectors
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YAZAKI (DCS)
Strengths:Leading supplier of wire harnesses to all eleven Japanese automakers
Diversified customer base and strong global capabilities
Opportunities:Increasing GM business due to strong alliances with GM group companies, Subaru, Suzuki and Saab
Yazaki is able to choose its own components & design specifications for Toyota and other Japanese OEMs
Weaknesses:Limited marketing of connector technology
Weak engineering, design and product development in Europe
Threats:Poor performance with regards to reaction time is decreasing Ford interest in Yazaki products
Perception that the best technology is saved for Toyota
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DCS Strategies/RecommendationsDCS Strategies/Recommendations Focus on smaller competitors with less than 5% market
share in the automotive supplier industry because true innovation usually comes from small, inconspicuous companies (e.g. JST, Amphenol, FCI etc.)
Follow patent applications: not all patents lead to products but patents still indicate a company’s direction
Monitor the trend and formation of business contracts and strategic alliances/joint ventures (especially global ones)
Incorporate a flexible and/or variable cost structure that focuses more on the relationships with individual OEMs (reduce fixed cost base and align capacity with changing market conditions)
Revamp business models, streamline operations globally and encourage new branding of products
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LEARStrengths:Strong program management capabilities & product design technology
Robust new business backlog ensures significant revenue growth in the coming years
Opportunities:Successful joint ventures with TNK have increased Lear’s presence in the Asian markets as a whole.
Growth in emerging markets (especially in China & India)
Weaknesses:High level indebtedness and recent increase in SG&A costs due to high investment in foreign businesses
Vulnerable to increase in interest rates because of the increasing financial constraints on the company
Threats:Intense competition from global players can adversely affect Lear in the long run
Low customer diversification - 72% of its revenues came from the 3 top OEMs
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SUMITOMOStrengths:Technology trendsetter (several Automotive Technology Labs established in 2001)
Successful joint ventures with Aisin Seiki, Denso & Toyota
Opportunities:Increased automotive business with GM
Sumitomo plans to increase production capacity by 50% with the creation of new factories in Suzhou (Shanghai) and Huizhou (Guangzhou)
Weaknesses:Notorious for low quotes in the beginning followed by price increases later
Slow introduction of new and innovative products
Threats:Limited presence in the North American automotive supplier market
Slow development of intelligent automotive systems has reduced the demand for EDS products
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Strengths:Yazaki’s state of the art Learning Center facilitates advanced training in labs and classrooms on EDS systems
Scalable Nodal Active Power (SNAP) architecture with Johnson Controls has enabled Yazaki to remain a key tier-one supplier of EDS
Opportunities:Recent promotion of decentralized factories will facilitate continuous improvement
Positions itself as the global alternative to Delphi Corporation
Weaknesses:Customer complaints about Yazaki’s unwillingness to make product changes for customers
Decreasing sales from former main customer Nissan
Threats:Centralization has greatly increased transportation costs at global locations
Top OEMS are dissatisfied with Yazaki’s customization and design capabilities
YAZAKI (E/EDS)
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E/EDS Strategies/RecommendationsE/EDS Strategies/Recommendations
Brand Delphi’s business lines with a specific value proposition and product function (e.g. Lear’s Intertronics)
Launch a user-friendly Asian website for the Japanese and Chinese market and incorporate a global communication platform
Leverage electronic capabilities (reduce weight and size), continually integrate wiring systems and implement miniaturization and/or customization systems (Focus on 80/20 ratio)
Launch innovative advertising campaigns to market new EDS technology and design applications
Connect with R&D and find out recent changes in OEM demands that could alter the business environment
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EATON
Strengths:Strategic alliance with Dana Corporation culminated in the creation of the Roadranger online-support website in 1997
Recognized for superior products: Eaton Fuller AutoShift, Eaton VORAD Collision Warning System & Eaton Fuller Solo Clutch
Opportunities:New diverse product lines: Patented ULF Ultralite Valve, M-Series Pumps, FP-5000 Feeder Protective Relay, Powerfold 240 & Powerfold 204
Alliance with Nittan Valve of Japan has increased Eaton’s presence in Asia
Weaknesses:Revenue continues to decrease annually (since 2001) because of the poor performance of the Industrial and Commercial Controls Segment
Declining sales in the fluid power division and truck division continues to affect the company’s operating profit
Threats:Eaton has fallen prey to unstable market conditions in Asia due to the high percentage of restructuring initiatives focused in China & Japan
Declining sales in the fluid power division and truck division continues to affect the company’s operating profit
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CARLING TECHNOLOGYStrengths:User-friendly eLibrary and product catalog allows customers a wide variety of options
Carling’s Tool & Die division ensures that products are created without costly secondary modifications for each commercial vehicle client
Opportunities:Innovative new product line: Miniature and Sub-Miniature PC Mount Switches, Contura VP-Series Illuminated Indicators, Mirror Rotate Control and Flat Rocker Actuators
Launch of new user-friendly Chinese website to service its Asian OEM clients
Weaknesses:Limited marketing of commercial vehicle electronic and switch components
Weak efforts to gain global presence in Europe and Asia
Threats:Overdependence on American market (over 77% of sales)
Mounting costs of recent acquisitions have backfired and continue to threaten the profitability of the company in the short term
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EAOStrengths:EAO Competence Centers focus on three successful modules: Form, Fit & Function in order to meet commercial vehicle design and engineering requirements
Recognized for its Zero-Fault Rating with SMT placement/soldering lines and PC-controlled test equipment in the commercial vehicle industry
Opportunities:TOCUS guarantees Total Customer Satisfaction and ensures the value propositions of competence, reliability and competitive edge
Recent launch of HMI products with customized switches featuring touch sensitive technology include the Series 56 pushbuttons (suitable for partially sighted, handicapped and disabled users)
Weaknesses:Limited presence in the United States and Asian markets
Poor development, design and engineering capabilities in the Asian market
Threats:Total reliance on the European commercial vehicle market
Eaton’s commercial vehicle segment brings in the lowest amount of revenue to the company each year
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DMS Strategies/RecommendationsDMS Strategies/Recommendations Penetrate a new market niche and name some products
according to innovative OEM product lines (e.g. subtle reference to Chrysler’s winning 300 flagship Sedan)
Build volume in lower cost production locations and reduce material cost by identifying cheaper alternative resins and metals
Introduce corporate-wide design implementation incentives for employees that come up with product design patents and/or ideas
Incorporate Six Sigma and Lean methods to examine new ways in which DMS can improve processes to eradicate waste, defects and variability on the manufacturing side as opposed to focusing primarily on the engineering aspect of the business
Investigate emerging technologies, let go of unprofitable programs and promote R&D expenditure to focus on alternate business lines
23Make DecisionsMake Decisions
Present Present FindingsFindings
Develop the Develop the Research Research
PlanPlan
Define the Define the problemproblem
Collect & Collect & Analyze Analyze
InformationInformationDelphi
METHODOLOGY
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DRIVING TOMORROW’S TECHNOLOGY
Delphi Corporation
Competition
OEM
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Information Sources
• Syndicated Data: AC Nielsen/IRI Reports• Global Insight/World Markets Research Center• Internal Financial Data• Customer/Retailer Data• Business Source Premier/Data Monitor• Trend Reports• Customized Research (qualitative & quantitative)
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