【正文】 Bain Analysis E co a tS B / W BP o w d e rE co a tS B / W BE c o a tP o w d e rS B / W BE c o a tP o w d e rSB / W BPowderE c o a tSB/WBSB/WBE c o a tSB / W BSB/WBUVE c o a tS B / W BUVSB/WBS B / W BPowderSB/WBUVSB/WBUVS B / W BSB/WBEcoatPowderUVS B / W BUVSB/WBG e n .m e ta l /o th e rEl e c.e q u i p .M F FIM / A C EA u t op a r t sMillworkTruck/bus/RRAircraftC o n ta i n e rOverprint C o i lAlum. extru.Comp. boardW o o dF FAppliancePl a st i cElectronics0%2 0 %4 0 %6 0 %8 0 %1 0 0 %Percent of Total$403 $206 $209 $149 $170 $52 $164 $42 $284 $91 $257 $36 $57 $201 $47 $193 $67 Total sales = $2,578MM JJR Coatings UsageThe usage of the five coating types varies significantly across the enduse segments. 48 Business Definition JJR Direct Cost Sharing Using SB as a baseline, the team used limited cost data along with qualitative assessments from manufacturing and industry experts to determine that the only significant direct cost sharing was between solventbased and waterbased. Costs Customers Competi tors Waterbased Powder Ultraviolet Electracoat Overlap with SB High Medium Low Re s e a r c h / t e c h n ic a lS e l l i n ge x p e n s e sPe r i o d c o s tsC O G SS o l v e n t b a s e d0%2 0 %4 0 %6 0 %8 0 %1 0 0 %Percent of total costs(raw materials) COGS (other) 49 Business Definition JJR Experience Transfer In analyzing the value chain steps, the Bain team found that the opportunities for experience transfer between Ecoat 。 . Census。 Frost Sullivan。s UtilityIf products offer very similar nonprice attributes or functional benefits, they are potential substitutes. 29 Business Definition Functional Substitution Cross Elasticity If a price increase in one product increases the demand for another, the two products are probably substitutes. Demand for Butter High elasticity Price of Margarine 30 Business Definition Perceptual Barriers Customer’s perceptions can be indicators of business definition。 = $1 $2 $5 10 20 50 100 200 500 1,000 Cost per Transaction Now + Savings Accounts Slope =% R178。Gisele Garraway Susan Caraviello, Paul DiPaola, and Todd Senturia bc Business Definition March 1998 Author: Contributors: Todd Senturia Reviewer: Copyright169。 1998 Bain Company, Inc. 1 Business Definition Agenda ?The business definition concept ?Applications ?Business definition steps ?Client examples –Bunker Hill Door Systems –JJR Industrial Coatings ?Key takeaways 2 Business Definition Agenda ?The business definition concept ?Applications ?Business definition steps ?Client examples –Bunker Hill Door Systems –JJR Industrial Coatings ?Key takeaways 3 Business Definition What is Business Definition? ?Indicates whether two business segments should be operated as one business or as separate businesses ?Helps identify what drives superior profitability in an industry ?Serves as the foundation for strategic analysis and sound decision making Business definition delineates the economic boundaries within which panies should pete. 4 Business Definition One Business vs. Separate Businesses ?Same customers ?Same cost structure ?Same petitors ?Different customers ?Different cost structure ?Different petitors If two business segments have the same customers, the same cost structure, and the same petitors, they are one business. If they are different on all of these dimensions, they are separate businesses. One business Separate businesses Compete in both segments to take advantage of synergies Do not pete in both segments 5 Business Definition Why Bain Uses Business Definition Strategic insights Tactical insights with strategic importance ?Should we buy or sell the restaurant business? ?Should we expand into China? ?Are we vulnerable to Japanese petitors? ?Should we vertically integrate into growing vegetables? ?Should we drop this product line? ?Should we crosstrain our salesforce? ?How should we group purchases for VMRs (value managed relationships? ?How should we configure our manufacturing plants? The correct business definition can lead to casecracking insights. 6 Business Definition Consequences of Incorrect Business Definition Companies that define their businesses incorrectly make poor strategic decisions. Costs Competitors ?Incur unnecessary costs ?Fo opportunities to capture synergies ?Do not transfer experience ?Underinvest in important RD initiatives ?Overlook relevant petitive threats ?Miscalculate “market share” ?Set inappropriate performance targets ?Overlook relevant capacity changes ?Misjudge true cost position Customers ?Neglect profitable customer segments ?Overinvest in unprofitable customers ?Fo opportunities to capture synergies ?Misjudge relevant market trends ?Overlook relevant geographies 7 Examples of Incorrect Business Definition Business Definition Some respected panies have missed profit opportunities or suffered unnecessary losses because they did not define their businesses correctly. ? American Express ? Allegis ? Saatchi Saatchi Charge cards and credit cards are separate Charge cards and credit cards are one business plastic money Charge card divis