【正文】 eader’s units sold 2 player’s units sold Other player’s units sold Market leader’s units sold 46 ROS/RMS BOS Key Takeaways (3 of 3) Other Tools ?When RMS or scale is not a key driver of profitability, ROS/RMS is not an appropriate tool 47 ROS/RMS BOS Takeaway Slides (1 of 2) 0%5%10%15%20%25%30% 1 2 5D u n s te rElio tC ur rierC abo tProfitability $1 50M MR ev enu eNormative band (Predicted potential profitability) Relative Market Share Higher accumulated experience is positively correlated with RMS Higher accumulated experience provides an opportunity for lower costs and higher profits RMS is a proxy for accumulated experience. RMS is positively correlated with profitability Accumulated Experience RMS RMS Profitability Accumulated Experience Cost per unit ROS/RMS Graph ROS/RMS Relationship ROS/RMS Components ROS/RMS Steps Define the business Calculate profitability Calculate relative market shares Draw normative band Determine action implications Key Success Factors ? Determine the economic boundaries of the business ? Identify relevant petitors ? Achieve parability across petitors ? Include any shared experience ? If business is local or regional, weight market shares ? Calculate the normative band using regression analysis ? Determine if strategic or operational improvements are required What is measured: How it is measured? Scale: Profitability (yaxis) RMS (xaxis) Normative band Current profitability Accumulated experience and strategic position Range of predicted profitability – return on capital employed – return on equity – return on assets – return on sales* Relative market share (RMS) Plus and minus one standard deviation from regression line Linear Logarithmic** 48 ROS/RMS BOS Takeaway Slides (2 of 2) Action Implications Calculating RMS Calculating Profitability Other Bain Tools Examples: Suggested actions: Peabody is below the normative band。 = 34 ROS/RMS BOS LAGTEL Strategic Remendation *Weighted by manufacturer revenue by technology After additional petitor analysis, the team remended a possible merger with one of the top four players to improve LAGTEL’s profitability. $2B 1995 Wireless Infrastructure Revenue Source: Natwest Securities。 = 33 ROS/RMS BOS LAGTEL TechnologyWeighted RMS * Weighted by manufacturer revenue by technology When RMS was adjusted for the mix of wireless technology, an even stronger relationship appeared. LAGTEL’s profitability was low considering its share, and LAGTEL was considerably behind four key petitors. $2B 1995 Wireless Infrastructure Revenue Source: Natwest Securities。 Wireless Operating Plan 25% 20% 15% 10% 5% 0% (5%) (10%) .1 .2 .3 .5 1 2 5 10 20 LAGTEL Callums Etel Lucia Alliance $2B 1995 Wireless Infrastructure revenue Relative Market Share (Total Tele) Operating Profit Margin Telco The profitability vs. overall scale did not demonstrate or clear normative band. LAGTEL Background 32 ROS/RMS BOS LAGTEL Wireless RMS Source: Natwest Securities。 25 ROS/RMS BOS Normative Band 0%5%10%15% 1 2 5H ol m e sW h i t m a nC as tleC an nonP eab od yROSR M S4,000U ni tsThe Bain Graphics Wizard will draw a normative band automatically based on the input values of ROS and RMS. 26 ROS/RMS BOS Adjusted Normative Band 0%5%10%15% 1 2 4H ol m e sW h i t m a nC as tleC an nonP eab od yROSR M S4,000U ni tsIf we believe that a player has mismanaged its costs and has not gotten the full benefits of its experience, we can exclude it from the calculation of the normative band.* The resulting normative band will be more narrow. *In the Wizard, go to the “Series” menu and select “remove series from normative band.” 27 ROS/RMS BOS ROS/RMS Steps Define the business Calculate profitability Calculate relative market shares Draw normative band Determine action implications Key Success Factors ?Determine if strategic or operational improvements are required 28 ROS/RMS BOS Action Implications A firm’s position on the ROS/RMS graph helps case teams to determine whether a business should pursue strategic positioning or operational improvements. Examples: Suggested actions: Peabody is below the normative band。 Author: Gisele Garraway ROS/RMS March 1998 1 ROS/RMS BOS Agenda ?ROS/RMS overview ?Applications ?ROS/RMS steps ?Client examples –wireless infrastructure –drug retailing ?Challenges ?Key takeaways 2 ROS/RMS BOS Agenda ?ROS/RMS overview ?Applications ?ROS/RMS steps ?Client examples –wireless infrastructure –drug retailing ?Challenges ?Key takeaways 3 ROS/RMS BOS ROS/RMS Graph ROS/RMS is a diagnostic tool used to pare a business unit’s actual profitability to its potential profitability. 0% 5% 10% 15% 20% 25% 30% 1 2 5 Dunster Eliot Currier Cabot Profitability $150MM Revenue Normative band (Predicted potential profitability) Relative Market Share 4 ROS/RMS BOS ROS/RMS Components What is measured: How it is measured? Scale: There are three main ponents of an ROS/RMS graph: profitability, relative market share and the normative band. * This tool is typically called ROS/RMS since ROS is the most mon profitability measure used **Allows for easy viewing of a doubling in rel