Driving Effective Business Decisions

John E. Frenett Driving Effective Business Decisions 2

Example #1

• Develop a market model for essential component of a high-end electronics product, in order to:– Understand unusual behavior of a key customer– Provide an analytical basis for diversifying away

from dependence on the segment

John E. Frenett Driving Effective Business Decisions 3

John E. Frenett Driving Effective Business Decisions 4

Results

• Concluded, correctly as it happens, that key customer was stockpiling essential components in anticipation of seeking other suppliers

• Forecast does not contain a reversal of rapidly declining sales of HEP

• Segment no longer worthy of focus it has historically been awarded

John E. Frenett Driving Effective Business Decisions 5

Example #2

• Developing insight into product innovation, such that organization can:– Place market-relevant timelines on development

projects– Anticipate product launches of competitors– Understand the parameters, and related settings,

driving innovation

John E. Frenett Driving Effective Business Decisions 6

• Answered the following questions, in a data-driven way:– “How have offerings evolved for key players in applications X, Y, and Z?”

– “For application X, which settings for parameter A will be considered leading-edge in the 2008-2011 time frame?”

– “If we were to pursue wins in application X, what are the target settings for parameters A, B, and C?

– “How often are new generations brought to market in applications X, Y, and Z?

– “How did our product P1 (parameter settings A=a, B=b, C=c; launched Jul-05) and P2 (parameter settings A=a’, B=b’, C=c’; launched Mar-07) stack up versus the competition?”

– “For applications X and Y, which products should be on our roadmap?”

– “How has competitor Alpha managed to gain a toehold in application Z, against fierce low cost competitors like Beta and Gamma?”

– “Given very limited historical data, how can we project innovation in application X?”

– “Is company leadership consistent across various resolutions in application Y, or do strategies differ as a function of parameter settings?”

Results

John E. Frenett Driving Effective Business Decisions 7

Example #3

• Find a way to bring a new product to market, in a way that:– Most effectively positions the business for growth– Does not necessarily echo the approach taken by

our hired consultant

John E. Frenett Driving Effective Business Decisions 8

EUROPE &

NORTH AMERICA

ASIAVertically Integrated

Manufacturer #1

A Brands/Retailers

M#1 Mfg FacilitiesASIA

Vertically IntegratedManufacturer #2

M Brands/Retailers

M#2 Mfg Facilities

Vertically IntegratedManufacturer #3

X Brands/Retailers

M#3 Mfg Facilities

A, M, X:• integers• much greater than 1

Simplified View of Market

John E. Frenett Driving Effective Business Decisions 9

Results

• Whereas hired consultant suggested targeting of European and North American brands, our analysis showed it would be best to target vertically integrated manufacturers (VIM) in Asia– Each VIM touches an array of brands– Each VIM can leverage our technology, and help

build our shop floor understanding