【正文】 vis the benefits provided and the price charged ? Delivery and munication of customer value proposition (value delivery system) ? Competitive advantage in delivering these benefits to the customer Where to pete? What is your customer value proposition for the different segments you are going to serve? What is your business model? What strategy will your BU pursue over the next 3 years? Key question Subquestions Issues to be considered ? Industry attractiveness and implication review ? Alignment of chosen strategy and environmental realities How does your chosen strategy exploit the industry opportunities and address the industry/petitive threats? 31 ? WHERE TO COMPETE? Customers Channels Products Geographic markets Target customers and segments ?Which customers are you trying to target or attract? ?Which are you willing to serve, but will not spend resources to attract? ?Which would you prefer not to serve? How does the entity reach its target customers ? Which distribution channels will you use? ? What customer segments can they reach? Geographical scope of business activities ? Geographic limits to the business? ? Local, regional, multilocal, national, international, or global player? ? If local, which localities? Quality and breadth of the product line ? Breadth of the product line? ? Quality of the product line? ? Product bundles or a series of unrelated products? 32 ? WHERE TO COMPETE? LEXMARK EXAMPLE ?Staged expansion: national, then international ?Fortune 1000 panies in banking, insurance, retail/pharmacy industries for laser printers –Have unique work printing needs –Large printer users –Value (not price) oriented segments ?Consumer mass market for inkjet printers ?Used broadest range of channels for customer freedom –Traditional retail channels (., dealer work, valueadded resellers, about 5,000 retail outlets) –Own account marketing teams to sell direct to customers ?Laser printers ?Color inkjet printers ?Associated consumable supplies ?MarkVision plete printer management system Customers Channels Products Geographic markets 33 ? VALUE PROPOSITION 34 ? “We will serve the fastgrowing segments of the work printer market with high quality, technologicallyadvanced products targeted to customer needs at a moderately higher price than undifferentiated laser printers”. LEXMARK39。9 4 39。 2 39。9 4 39。9 2 39。9 4 39。9 2 39。9 4 39。9 2 39。9 4 39。9 2 39。9 4 39。9 2 39。9 4 39。9 2 39。9 4 39。9 2 39。0 0NOT EXHAUSTIVE 27 ? TREND ANALYSIS APPLIED TO LEXMARK ROCE Percent Operating ine x (1 tax rate) USD M Capital employed USD M 247。9 8 39。9 6 39。9 9 39。9 7 39。0 0Financing cash flow PhP million + 020406039。9 8 39。9 6 39。9 9 39。9 7 39。0 0020040060039。9 8 39。9 6 39。9 9 39。9 7 39。0 005001 , 0 0 01 , 5 0 039。9 8 39。9 6 39。9 9 39。9 7 39。0 005 , 0 0 01 0 , 0 0 01 5 , 0 0 039。9 8 39。9 6 39。9 9 39。9 7 39。0 03132333439。9 8 39。9 6 39。9 9 39。9 7 39。0 005001 , 0 0 01 , 5 0 039。9 8 39。9 6 39。9 9 39。9 7 39。0 0020406039。9 8 39。9 6 39。 customer relationships inherited from IBM Wellestablished retail distribution/ dealer work Known for quality specialized products and work software Bestknown brand Known for product quality Quick to market with new technologies Awarded leader in implementation of necessary product features Leader in print quality Crossfunctional coordination delivers superior product design and customer service Market positioning Crossfunctional coordination Ownership of technology allows lowcost, inhouse manufacture of critical ponents ? 20 ? BENCHMARK PERFORMANCE AGAINST RELEVANT INDUSTRY KPIs KPIs (examples) Financial indicators ? Margin ? Net ine ? ROCE Operating indicators ? Advertising effectiveness ? Utilization rate Strategic indicators ? Market share ? Percent of revenue from new products ? Working capital trend External indicators ? Market prices of raw materials BU Competitor A Competitor B Competitor C 21 ? KPIs Financial indicators ? Operating ine ? Margins ? ROCE Operating indicators ? Distribution reach ? Cycle time Strategic indicators ? Market share ? Brand awareness Lexmark HP Epson BENCHMARKING APPLIED TO LEXMARK Strong Medium Weak * Includes other information equipment (. scanners, projectors) $457 million 12% 29% $1,573 million* 9%* 11%* $583 million* 6%* N/A* 12% 47% 17% 22 ? INTERNAL ASSESSMENT ? Relevant BU segments (based on customer, product, geography, distribution channel) ? Operating contribution estimates for each segment How does your current business emphasis fit with the industry opportunities and the petitive landscape? Which segments of the business are providing the highest returns?* What have been the performance trends along major BU KPIs? ? KPI performance trends over the last 35 years, . return on capital employed (ROCE)**, operating ine, margins, capital employed ? Assessment of underlying trend drivers ? Expected evolution Key question Subquestions Issues to be considered Which intangible assets could be nearterm sources of value? ? Identification of inhouse intellectual property, talent, works, brand/image ? Conversion into sources of value * Based on latest available, 12 year historical financial statements ** ROCE = Operating ine x (1tax rate) All interest bearing debt (short and long) + minority interest + stockholders’ equity 23 ? SEGMENT ANALYSIS Revenue Gross profit Operating profit Assets employed People employed Operating profit margin Gross profit margin ROCE