Sample Slides in the New FormatSeptember 20071A4 Sample Slides.pptAdding your slide to this collectionSend your slide via e-mail to one of the following addressespropper.barbarabcg.comkossmann.inesbcg.comlaubach.friedemannbcg.comThank you! 2A4 Sample Slides.pptFive types of slidesText and columnsGraphsTablesDiagramsMaps and timelines3A4 Sample Slides.pptText and columns4A4 Sample Slides.pptWe recommend entering this market segmentHigh growth and synergy with existing business make this an attractive opportunityAttractive, high growth marketModerately sized market, but growing fast$5B in revenue in 200625% growth projected through 2010Fragmented market that is ripe for consolidationTop-15 players only account for 20% of the marketMarketing experience and owning the channel will be key to success in futureExisting players have limited marketing capabilitiesCurrently, no clear market leaderNeed to determine entry strategyPrioritize portfolio of growth opportunitiesCompare options to other growth areasEvaluate impact of entry into this market on financial flexibilityDetermine market entry strategyorganic versus acquisitionCan leverage existing capabilitiesWell priced acquisition would be fasterBegin to identify acquisition targets and conduct strategic due diligenceEvaluate investment requirements and optimal structuringExplore synergies with current businessSpeed is critical in this fast moving market segment5A4 Sample Slides.pptCompany consisted of multiple business units in such diverse fields as automotive supply, engineering and specialty chemicalsCapital markets had placed a conglomerate discount on the company that had also accumulated a significant amount of debt through acquisitionsEnormous pressure from analysts, investors and supervisory board members to overhaul the overall strategy and structureAim: reduction of value-reducing factors and significant improvement of capital structureBased on our analysis, the company decided to divest the highly profitable specialty chemicals divisionHigh expected exit value given strong cash-flows from businessesLimited organic growth opportunitiesLimited inherent portfolio logic of different businessesNew core allows for release of significant value potential (share price improvement over the course of the project of 50%)Abolishment of current holding structureReduction of net debt to almost zeroSignificant growth potential (organic and by M&A)Portfolio review at 5B industrial conglomerate resulting in split of companyContext and challengesResults and impactWhy the client choose BCGBCG had performed another portfolio analysis for the client two years earlier that was highly acclaimed by the then CEO for its rigorosity, clarity, and independenceIn this crucial moment of change, the new CEO relied on Our proven methodologyOur ability to integrate different industry experts in our teamOur knowledge of the company, and Our ability to seamlessly cooperate with an investment bank hired to support the upcoming exit of one of the main divisionsBCG approach: what we didRigorous, fact-based portfolio analysis based on BCGs proven traffic-light portfolio approachAnalysis of strategic quality of portfolio: market attractiveness and competitive position of BUsAnalysis of growth and value-creation opportunities by BUDevelopment of potential future portfolios of the company based on different options for the coreincluding equity stories and M&A buying lists for each optionEvaluation of portfolio options based on wide set of criteria, including strategic, financial and capital-market related aspects6A4 Sample Slides.pptProject examples in corporate strategySource: BCG case database 2005Date20052005200520052004200420042004Region/countEuropeAsiaAmericasEuropeEuropeAmericasAsiaAmericTopicStrategyPortfolioPortfolio/GrowthGrowthGrowthTransformationTransformationPortfolioProject descriptionDefined a global strategy for the ice cream business of a major global consumer goods companyConducted an portfolio diversification project for a major international airlineDeveloped a portfolio and growth strategy for a conglomerate in beverage and snack-food manufacturingDeveloped growth strategy for subsidiary of a major European airlineGlobal growth strategy for the wireless internet services of a major mobile telecommunication company Developed transformation growth and financial strategy Transformation strategy for an automotive player in India Portfolio shareholder value strategy for a global oil corporation7A4 Sample Slides.pptIncreased demand has stressed Artemisinin supply chainExpanded cultivation butissues persistIncreased demand led to expansionAcreage more than doubled over past years Expanding from China and Vietnam to other continents, including AfricaDespite expansion, still supply-demand mismatchDifficult to obtain reliable demand forecastsManufacturing capacity needs to be committed early due to long production cycleSupply-demand mismatch has had negative consequencesPrice hikes for Artemisinin and its derivatives, limiting access to ACTsPrices of ACTs (co-blister or fixed dose combination) well above monotherapiesHigh prices provide incentivefor counterfeitingStudy found average of 38% of artesunate bought in SE Asia shops did not contain active drugCounterfeiters getting increasingly sophisticated, e.g., hologramsVietnam64%Myanmar40%Laos38%Cambodia 25%Thailand11%GenuineCounterfeitSource: WHO factsheet on counterfeit medicines, May 2005; “Fake artesunate in southeast Asia”, The Lancet, June 16, 20018A4 Sample Slides.pptDifferent organizational models may beappropriate for different retailersMerchant as muscleMerchant acts as supply chain quarterbackHigh decision authority across chainHigh P&L accountabilityMerchant and inventory manager do most supply chain activitiesMerchant as GMMerchant accountable for delivering numbers and coordinating across supply chainSeen as mini-GMFunctional specialties make decisions in respective areasLook to merchant to make tradeoffs and set prioritiesCoordinated specialistsCo-located cross-functional team managed by rigid timeline and well-defined meetingsHighly specialized functional activities and deep areas of expertiseNo clear functional leader; rigorous process orchestrates supply chainFunctional assembly lineHighly autonomous functions work independentlyFocused, defined responsibilitiesHandoffs made along very regimented process with clear accounta-bilitiesNo real merchant rolePDprocessPlanninganalystProc.planningInvplannerMerchantDesignMerchantplannerTextilesOrderplannerPre-pro-ductionMerchantPlanningPro-ductionDistri-butionDesignMarketingMerchantSourcingQualityInventorymgtFabricspec.CreativeDesignFabricdevProtodevFin servunitFore-castingSour-cingQADesignMerchMktg9A4 Sample Slides.pptAdditional requirements to sell throughcatalogue sellers have to be metRequirementsof catalogue sellersDelivery on timeExcellent packagingProvide catalogue-ready sales materialDeliver larger quantities (several 100s) PriceDeliver internationallyImportance to catalogue sellersCatalogue reseller cannot afford to say noCatalogue reseller cannot afford mistakes (costly and may lose the customer)Requires different kind of sales materialCatalogues often have a wide circulationMust be competitiveTo service international catalogue resellersImportance to sellersIs client capable of meeting these requirements?Source: Interviews with catalogue sellers10A4 Sample Slides.pptGraphs11A4 Sample Slides.pptWe win where we investRevenue growth driven by Korea, Taiwan, HK, and SingaporeThis corresponds withour investmentWe have invested in Korea, Taiwan, HK, and SingaporeAllocated 80% of additional BME and SG&A spendReached #1 market positionContributed over 100% of our revenue growthWe believe that we have a competitive advantage that is extendableSG&A investment is a key driver of resultsCrucial to put in place a strong teamOur company has window of opportunity to build a sustainable market leadership position9720031412005KoreaTaiwanHong KongSingaporeRest of APRevenue (B$)12A4 Sample Slides.ppt7,248,42020年电力道路运输化工钢铁水泥煤炭开发其他+317%2,01,41,51,71,71,51,811,62008年5,02,83,06,83,43,03,624,22010年10,03,46,06,86,05,6+109%13A4 Sample Slides.pptHealth care spending increases with economic growth1. Argentina, Australia, Belgium, Brazil, Canada, Chile, China, Colombia, Denmark, Finland, France, Germany, Greece, Hong Kong, India, Indonesia, Ireland, Italy, Japan, Malaysia, Mexico,Netherlands, New Zealand, Norway, Philippines, Portugal, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, United StatesSource: EIU; BCG analysisIndonesiaAustraliaCanadaDenmarkFinlandGreeceHong KongIrelandItalyJapanMalaysiaMexicoNetherlandsNorwayPortugalSingaporeSouth KoreaSpainSwedenSwitzerlandTaiwanArgentinaBrazilChileChinaColombiaSouth AfricaThailandBelgiumFranceGermanyUnited KingdomTurkeyUnited StatesNewZealandGDP per capita ($)Expenditure per capita (K$)Total expenditure on health vs. GDPcomparison across countries1 (2003)14A4 Sample Slides.ppt7,248,42020年电力道路运输化工钢铁水泥煤炭开发其他+317%2,01,41,51,71,71,51,811,62008年5,02,83,06,83,43,03,624,22010年10,03,46,06,86,05,6+109%15A4 Sample Slides.pptModel predicts $35M upfront payment for compound XNote: Regression omits Cephalon-Alkermes dealSource: BCG deal database; BCG analysisProjected peak sales (M$)Biotech licensing payments: Correlation between upfront payments and peak salesUpfront payment (M$)LicensingdealsCompound X$500M peak sales = $35M upfrontR2 = 0.76Upfront payment12.1Peak Sales- $4.2M=RegressionEquation16A4 Sample Slides.pptEarly phases of development are getting longerPhase 1 (median)Phase 2 (median)Phase 3 (median)Note: Data for top 20 Pharma only. Phase duration is defined as time from starting one phase to the beginning the next phaseSource: Pharmaprojects R&D database; BCG analysis18.4 months(0106median)14.2 months(9400median)30%23.3 months(9400median)29.9 months(0106median)28%36.5 months(9400median)38.9 months(0106median)Year of end of phase9%Duration (Months)Duration (Months)Duration (Months)17A4 Sample Slides.pptPhase II trials are getting biggerMean patient enrollment increasing faster than medianGrowing number of large Phase II studiesNote: Data from top 20 pharma companies and top 10 biotechsSource: www.clinicaltrials.gov; BCG analysisMeanMedianExpected patient enrollment2000200120022003200420052006Number of Phase II trials with 500 patients18A4 Sample Slides.pptEmerging markets: a potential source of inexpensive laborSource: Desk research; BCG analysisGrowth of industrial production in % (200105)Manufacturing compensation 2002 ($/hour)IndustrialGDP $500BChinaRussiaIndiaThailandMalaysiaItalyUKFranceCanadaGermanyUSJapanTaiwanKoreaSpainIndonesiaLow cost, fast growth industrial GDP:$1.1 trillion Medium cost, solid growth industrial GDP:$0.5 trillionHigh cost & low growth current industrial GDP:$6.2 trillion Low cost labor markets are showing rapid industrial growth19A4 Sample Slides.pptComparable product typically spend $70M pre-launch Top-down estimatePre-launch spend (M$) $70MAdjusted pre-launch spend (central + US) for primary care product with$1B peak salesNew MoANew TA$2M$7M$29M$32MAverage:1. $2B+ launch, competitive with Vioxx, significant investment in un-branded promotion pre-launch to establish new MoANote: Comparable defined as $1B peak sales, in new TA for company with new MoA Source: BCG benchmark study, 2002; best practice, LLP benchmark report, 2004; Cutting Edge Information, Inc. benchmarking report, 2003; BCG analysisFor comparison: Celebrex estimated to have incurred $160M1 pre-launch spend20A4 Sample Slides.pptAgricultural input only small part of food value chains value-added B$Agricultural inputGene-modified seedAgchemFarmingPrimary processingFood ingredientsSecondary proc./manufact.Retail dis-tributionSource: Deutsche Banc Alex. Brown research 1999; FAO statistical database 1997; CRB commodity yearbook 1997; BCG estimateGlobal sales and value added of key steps in food and agro 201521A4 Sample Slides.pptNo clear champion can yet be identified across segments1. UOBR has made a move to merge with BOASource: DB/Tisco estimates; company data; BCG analysisCorporate loansSME loansConsumer loansConsumer-focusSME-focusCorporate-focusBanks increasingly focused but none can be considered overall or segment championLoan portfolio by bank in 2004 (%)22A4 Sample Slides.pptOpportunities exist in rapidly growing motorcycle marketRapid growth in total registered motorcycles and penetration and room for further penetration compared to more developed markets1. Motorcycle registration divided by country population 2. Number of motorcycles in useSource: Motorcycle registration in Country A compiled by Honda; EIUBikes per 100 pax in selected SE Asia countries (2005)2Registered motorcycles(M vehicles)Motorcycle pene-tration rate1 (%)CAGR22%23A4 Sample Slides.pptInnovative production will increase uptake of Artemisinin based malaria therapyInnovative production will lower cost of most therapy to under $1.00Leading to uptake in demand for ACT therapy for malaria in public sectorNote: Product mix preliminary; worldwide demand view. Assumes blister packaging unless noted, 10% overhead allocation based on ex factory costs. Assumes biosynthetic Artemisinin launched in 2009 at cost of $100/kg and high-yield plants launch in 2010 at a cost of $100/kg. Scenario assumes biosynthetic Artemisinin available to all ACT manufacturersSource: BCG analysis Treatments (thousands)Total cost per treatment ($)1.700.450.510.790.850.941.041.091.131.191.46Non-MMV ACTEuartekinCoartemCQSPQOtherCQ + PQOzDB289/AQ13New cost0.00.51.01.52.02.5Overhead allocationFill & finishCombinationArtemisininSavings due to biosynthetic24A4 Sample Slides.pptWide variability in shareholder returns1. S&P 400 packaged food and meat index 2. Yahoo! 22 Nov 2005, based on trailing twelve months; Nestles P/E estimate for 2005 by SG Cross Research 3. Total shareholder return (compounded annually 20002004) based on BCG Value Science Center researchSource: Yahoo!, company 10ks; BCG analysisRelative stock prices of packaged food companiesIndexed (%)1PE2(ttm) TSR3(0004) HersheyWrigleyKelloggGen. MillsHeinzKraftSara LeeCampbell26.829.019.214.617.320.120.418.120.9%12.6%11.2%9.7%5.3%n/a5.0%(2.3%)Nestle18.09.5%Index1 17.08.9%Clear winnersNext TierWhat are the key differentiators of performance?25A4 Sample Slides.pptTool illustration 2: ready-willing-able audit18 Appropriate resources to implement the merger1 Merger rationale is understood2 Need for strategicalignment is high3 The objectives and threats are clear4 Competitors will outperform us otherwise5 Need to merge and align organizations is high6 Merger will help to increase efficiency and effectiveness7 NewCo organization and strategic objectives are clear8 Shared view on urgency to realize integration11 We will build a common culture12 No sacred cows13 Difficulties and constraints are clearly addressed14 Full and active support from mgmt.15 Feel projects arewell structured19 Management has skills needed20 Right organization culture to succeed21 Everybody knows how he can improve22 Sufficient measu-rement systems23 Right support services to facilitate merger24 Appropriate long Term/short term actions25 Quick and good decision makingAt project launchAt redesign launch At implementation kick off 1Strongly disagree2Disagree somewhat3Uncertain4Agree somewhat5Strongly agree16 Organization is open and willing to change9 Willing to redefine my own role10 Willing to make significant commitmentAbleReadyWilling17 Right HR systems and competencies26A4 Sample Slides.pptCustomer perspective compared to relative performanceExample of customer scorecardScoresNot importantWorstHighly importantVery goodNeutralMediumCustomer importance:Performance:12345ReliabilityQuality Technical know-howKnowledge salesEntrepreneurial culturePriceAfter sales serviceProduct innovationConsultingLead timesSample timeImageRegional presenceProgram widthOffer timeProgram depth Brand recognitionMarketingRegional productionCriteriaPerformanceImportanceto customer27A4 Sample Slides.pptWith lower variability cycle time can be decreased Long lead times caused by well-padded supply chainSource: Interviews; BCG analysisPackAuditWeeksRaw materialsCut and sewTransportTransitFabric madeIronCutDyeTransitSew andauditFabricinspectionShip to U.S.CustomsP.O IssuedDate marked in-stock0123456789101112131415Example: knit garment manufactured in Hong KongOpportunity to reduce cycle time by 50%Significant time wasted in non-value added stepsTransit time Non-value added timeValue added time28A4 Sample Slides.pptPosition-strengthening strategies varyExamples of successful expansionsNote: Market position is rank (by deposit) in MSASource: SNL; company websites; banking lit search; BCG analysisCommerce strengthened Philadelphia position with aggressive de novo branch strategyFlagstar used de novo stand-alones to supplement established in-store positionBankCommerceTotal assets$38BMSAPhiladelphiaPosition in market#3StrategyBuild out position with de novo branches, aggressive outreach to potential government clients, and extended hours across all city branchesResult/ impactSurpassed in-state rival PNC (#4) to gain top 3 position by deposits; nearly 2 deposit share of #5 BAC despite roughly same number of branchesBankFlagstarTotal assets$15BMSADetroitPosition in market#4StrategyEnhance retail presence by tripling number of branches and focusing on urban stand-alones (to boost name recognition) to supplement traditional in-store format (mostly in suburban Wal-Marts)Result/ impactSurpassed Fifth Third, Natl City, and Charter One (RBS) with above fair share of deposits, solidifying top 5 position20022005+37 branches% share+$5B deposits+37 branches% share+$6B deposits29A4 Sample Slides.pptLarge breadth and depth of coverageVisited accounts/max. coverageNumber of visited accountsMax. coverageNumber of repsVisits/dayThousandsThousandsSource: Client30A4 Sample Slides.pptAre the best-performing employees being rewarded?Performance versus total compensationSales reps region XXXSales p.a.Total compensation (K$)Normalize low-performers compensation: x% decrease in personnel cost = y% margin improvementAdequately reward high-performers to ensure motivation:x% increase = y% increase in employee satisfaction index31A4 Sample Slides.pptBreakdown of channel partner financial incentives Source: Dealer interviews; BCG estimatesStructure financial incentives to promote key offerings (i.e., advanced mobile services) through channel partnersTotal paymentper postpaidgross addMarketing kickback provided to Specialist retailers for selling mobile services200300Revenueshare/volumeRate plan commissionConnection commissionHandsetmarginMarketing kickbackPrepaid margin comes primarily from sale of handsets (straight commission of only max. 10% of handset margin) Dealers receive a share of individual customers ARPUThe percent share received increases with amount of time customer stays with operatorOthers only pay a volume bonus based on what was soldDepending on the rate plan sold, a different upfront commission is paidCommission tied to the value of the underlying rate planDealers receive a straight connection commission for activating new post-paid plansDealers generate a margin on the handsets they sellHandsets are purchased from the operator at a subsidized costIf prices are lowered after the fact, dealer bears the risk and takes a loss on the individual handset being sold32A4 Sample Slides.pptDiscovery teams plan to triple revenue by 2006Only 25% of revenue in 2006 (two years after case) from new products/servicesCommodityResults of Pilot validated initial hypotheses about discovery value creation potentialAnnual CLIENT revenue (M$)X%3X%Share of walletNew/futureProductMission criticalProjected revenue across four Pilot customersObservations/considerationsAll four Pilot teams projected revenue increases of 23X by end of 2006Despite the baseline budget calling for flat growth over that periodPlans balanced increasing share of existing services and introducing new service targeted at unmet needsThe teams each believed there was even more potential upside .Deeper penetration of basic servicesBroader potential of new applications beyond the core Discovery customersE.g., wireless/wireline integration, converged voice/data, wireless management services, etc33A4 Sample Slides.pptTables34A4 Sample Slides.pptAddressable biomedical R&D market $17BBased on CMC, overhead, FTE, and Capex assumptionsSource: PhRMA; SEC filings; BIO; Burrill; NIH; NSF; BCG analysisPharmaPublic BiotechPrivate BiotechAcademic(Fed funds)Academic(non-Fed funds)InstitutesFed ResearchTotal$33.5B$15.7B$4.1B$14B$8B$6B$4BAdjustments - Clinical/CMC (%) 70%60%50%25%25%25%25% - Overhead (%)15%15%15%50%40%40%40% - FTEs$5.4B2.50.72.21.31.00.6 + Cap Ex$0.9B0.40.1Addressable$4.0B3.21.23.02.31.71.2PharmaPublic BiotechPrivate BiotechAcademic(Fed funds)Academic(non-Fed funds)InstitutesFed ResearchTotal$34.4B$16.1B$4.2B$14.0B$8.0B$6.0B$4.0BAdjustments - Clinical/CMC (%) $23.5B9.42.13.52.01.51.0 - Overhead (%)$1.5B0.90.35.32.41.81.2 - FTEs$5.4B2.50.72.21.31.00.6 + Cap Ex$0.9B0.40.10.00.00.00.0Addressable$4.0B3.21.23.02.31.71.2$16.7BTotalAssumptionsCalculations35A4 Sample Slides.pptRecent Fisher acquisitions drive increasein private label and high-end SKUsSource: SEC filings; Company websites; Analyst reportsDistribution relationships, presence in labs facilitate educated acquisitionsDateAcquired companyTransaction size (M$)Fisher distributed?Key productsNotes/ImpactNov 2001205 Specialty laboratory instrumentsRelated suppliesConsumables re-branded to FisherNov 200255 Specialty organic compoundsCombinatorial drug discovery librariesExpansion into drug discovery chemicalsJune 2003684 Reagent kits for: protein & DNA (Pierce), cell culture (HyClone), immunoassays (Endogen)Increase proprietary productsFeb 200480RNAi and siRNA productsHigh quality RNA oligonucleotidesIncrease proprietary offeringsMar 2004330Microbiology culture mediaClinical diagnostics, immunoassaysIncrease EU presenceAug 20042,600Laboratory robotics (e.g., liquid handlers)Related consumables (private label)Former competitorIncreased private label from 50% to 60%Oct 200549Cellular imaging toolsImage analysis tools and softwareComplements technology from previous acquisitions36A4 Sample Slides.pptSeveral recent examples of banks benefiting from s-curve effect, both through acquisition and de-novo1. Wachovia actually decreased branch share from 18 to 17%, by strategically closing several First Union branchesNote: Analysis of deposit share winners limited to select examples of successful deposit share takers: not comprehensive of all banks undertaking aggressive branch expansion efforts Source: BCG analysisRecent examples of banks earning more than fair share of deposits when expanding in a geographic areaBankMSABranch share gain (%)Deposit share gain (%)Deposit increase coefficientSunTrustAtlanta, GA13 15 (58 de novo/74)16 26($14B deposits)4.1RBSBoston, MA13 15(38 de novo/74)14 21($10B deposits)3.2WachoviaMiami, FL 18 17(23 de novo/62)16 21($13B deposits)N/A1 RBSPhiladelphia, PA10 11 (24 de novo/72)9 12($5B deposits)2.6US BankSacramento, CA7 10(19 de novo/19)8 12($2B deposits)1.2CommercePhiladelphia, PA5 7(37 de novo/37)8 11($6B deposits)1.0Bank of ChoiceGreeley, CO6 7(2 de novo/2)6 12($200M deposits)6.3CitiSan Francisco, CA4 9(3 de novo/70) 3 10($14B deposits)1.9Flagstar BankDetroit, MI2 5(37 de novo/37)2 8($5B deposits)2.02.8Average37A4 Sample Slides.pptOverview of vignettesCustomerDescriptionContactWireless carrierClient goals to Increase sales performance and market share Reduce variability across regions, industries and repsReduced complexity of sales process, lead times for decision-making, and management time requirementsn/aTelecom companyNeed to identify, evaluate, and prioritize key initiatives to drive 23 year impactImproved sales force retention and key account relationshipsDerek LockeJ. PuckettMedical device manufacturerSales strategy required in the face of lost market share and lower-cost competitionDifferentiated sales approach and account prioritization increased installed base by 35%n/aOnline serviceGoal to reverse drop in sales rep productivity after previous change effort had failedOptimized sales model, resource allocation and focus to achieve expected sales increase of 25%Nikhil Bhojwani123438A4 Sample Slides.pptInitiatives identified, evaluated, and prioritized Significant increase to gross margin achievableNote: Total potential of all initiatives is greatervalues here estimate what could be captured by 2006InitiativeDramatically improve sales force retentionReinvent large customer relationshipsIncrease cross-sellingTurn time sinks into selling time2006 gross margin impactSeg A $XMTBD $XM $XMSeg B $YMTBD $YM $YM $YMSeg C $ZM $ZM $ZM $XMTarget 2006 gross margin impact $AM $BM $CM $DM $EMValue of initiatives 10% of current gross marginAgreed opportunity size; initial focus areas39A4 Sample Slides.pptCreate in-depth profiles of the shopping behavior and attitudes of key segmentsSource: BCG proprietary database; Online panel 2001, n = 9,273; BCG analysisReluctant shoppersProfoundly dislike shopping (online and offline); sincerely hope the Internet is going to help make it easier; no social motivation; plan their purchases; loyal to preferred store and willing to pay more to save time and hassleOlder male, married, higher education and incomeLimited experience, light users; information seekersEnthusiastic shoppersShopping addicts, but too inexperienced with the Internet to know what to expect and what it can bring; like social aspect; enjoy browsing; dont think much about prices; buy on impulseMore females, older than average, with kids, average incomeLess experienced, light users; communicatorsBusy online momsNeed to be efficient shoppers, and manage to leverage their limited Internet experience to achieve this; love to shop; enjoy browsing; very price sensitive; not loyal to shops and brands; product oriented (availability and selection)Housewife, larger household with kids, income below averageLess experienced, medium users; browsers/shoppersRational technophilesRational shoppers and very experienced Internet users who fully leverage their expertise to shop online; price sensitive; prefer well known companies; plan their purchases; do not love to shop and dont like social aspect; do not impulse purchaseMostly younger singles, education above averageVery experienced, very heavy users; all around usersImpulsive professionalsImpulsive buyers, and Internet savvy, for whom the Internet is a new, exciting shopping channel; love to shop; like new products, loyal to brands; not price sensitive; not information orientedYounger singles or couples, high education and incomeExperienced, heavy users; all around usersAttitude towards browsing/ purchasing, and expec-tations frome-commerceDemo-graphicsWebo-graphics40A4 Sample Slides.pptOverview of vignettesVignette 1: Telecom company customer discoveryCustomer discovery to transform large customer relationshipsDerek LockeVignette 2: Wireless provider telematics segmentationMajor wireless provider required segmentation of telematics opportunitySebastian DiGrandeVignette 3: Enterprise networking customer discoveryCustomer discovery for an enterprise networking businessN/AVignette 4: Software market segmentationPrioritizing vertical markets for a software companyN/AVignette 5: Software market segmentation (II)Segment market to develop a winning growth strategyN/AVignette 6: Handset manufacturer customer discoveryInternet game provider planning to launch a new web business targeting teenager segmentN/AVignette 7: Integrated telco cohort behaviorAnalysis of mobile customer cohort behavior led to identification of 5% revenue lift initiatives for mobile telcoN/AVignette 8: Integrated telco segmentationAssist major partner program design with outside-in partner segmentation and value propositionsN/AVignette 9: IT services provider customer discoveryIT services provider deepens customer relationships via customized solutionsN/AVignette 10: Handset manufacturer segmentationSuccessful customer segmentation based market development for a handset manufacturerN/ACustomerDescriptionContact41A4 Sample Slides.pptAnalysis of strategic alternatives led to recommendationto pursue #2 market positionStrategic alternativeDescriptionProjected NPV1Status quo1Independent networking2Complete commitment3Service rev. (08)Risk2Maintain current strategySemi-independent entityInternally funded R&DSmall acquisitions onlyContinue allianceQuota credit to sales forceManage each initiative independentlyCreate arms length activityMaintain allianceCreate new preferred partnerRange of decisions to be addressedEquity vs. non-equity participationDivestiture, majority stake in buyer, JVEstablish Networking SolutionsSignificant acquisition(s)JVsPromote and sell as a core offeringCorporate endorsementBranded as part of companyPrepare for diminished alliance activity1. Considering total cash flows from 20032008 and a 10-year terminal period 2. Based on quantitative analysis of possible outcomesNote: All numbers are sanitized for client confidentialitySource: Financial analyst reports; DellOro; IDC; Gartner; BCG analysis$xxxM$xxxM$xxxMLowMediumHigh$xxxMxx%$xxxMxx%$xxxMxx%42A4 Sample Slides.pptDiagrams43A4 Sample Slides.pptOverview of variable interrelationshipswithin demand leakage frameworkNeedProductAccessAbility to payWillingness to use# of dosesHow many doses of vaccine in a given year does this translate into?Key questions answered by modelWhat is the total theoretical market for the vaccine?What population group can benefit from existing product?What portion of the population has access to the vaccine?ProgramsHow much of the vaccine will be either funded or affordable?WealthFinancingWhat portion of the population will choose to buy it?Countries, institutions, individual attitudeProduct value proposition44A4 Sample Slides.pptTwo reasons for pharmaceutical spin-offsMonetize a low priority project or provide a structure to fund a project externallySpin-offProduct valueIs this a strategic priority? Does it align our TA focus now? Is there value for this in the future?Internal fundingCan we optimally fund this? Capabilities Are this products assets separable from our other programs?YFund internallyShelve NFund externallyMonetizeNYNYHow have other companies spun-off or divestedits non-core assets?45A4 Sample Slides.pptWe analyzed four main levers of biotech deal value2. Cost sharing/reimbursementSale and marketing costsDevelopment related1. Up front payments3. Milestone payments4. RoyaltyManufacturing costR&D costsSales relatedTotal deal value+Typically splitby geography46A4 Sample Slides.pptProject consists of two modulesSteering committeeCSM Jaap KerstjensBCG expertsWouter-Jan SchoutenEmile GostelieProject managementCSM (T.B.C)100%1 BCG 50%Complexity managementCSM Control 100%Sales/Marketing100%Manufacturing100%1 BCG consultant100%Process reengineeringCSM operations 200%PurchasingManufacturingFinance1 BCG consultant1 100%Overall project managementFood industry knowledgeProcess re-engineering knowledgeCoordinate effortSynthesize findingsChallenge/refine findingsConduct interviewsConduct analysesGather informationRoles and responsibilities1. For phases 1 and 247A4 Sample Slides.pptSales reps are deemed to be able to estimatekey segmentation indicatorLowHighRelevanceLowHighEstimationcapability ofsales repsMapping of segmentation indicator1910116742538Source: BCG client experience48A4 Sample Slides.pptBetter systems needed to optimize new customers hookupSignificant rework and coordination problems would be avoidedCustomerTechnicianGrid operatorSub-contractorInitialcustomerinterestReceipt of orderPlanningService coordinationHookup,meter installationDocumen-tationInvoicingData capture,creation of project fileHook-upMeterinstal-lationSurveyBilling of services, invoicingFinalize contractScheduleappointmentsNotificationof completionTechnical planning,offer writingMaterial planningInvoiceReworkPaperdocumentationCoordinationproblemsPaper documentationRedundantdata storageNo linkto SAP49A4 Sample Slides.pptScreened opportunities across four dimensionsDemandcharacteristicsSegmentcharacteristicsContendersassets and capabilitiesClientsassets and capabilitiesWhat are customer needs, how do they vary within segment?How many potential customers, how much value is created?What are the sources of advantage in segment?Is segment fragmented today but likely to consolidate?Which contenders have leveragable assets?How well do assets match sources of advantage in segment?What are the leveragable assets?How well do assets match sources of advantage in segment?Generic attractivenessKey sources of advantageClient specific hurdlesProbability of successPotential playsSize, growth of sub-segmentsSpecific competitive challenges1234What are the opportunities?What will drive the winner?50A4 Sample Slides.pptApproach in seven stepsFirst five steps are in scope of BCGs involvementWorkshops with sales, GM, pricing, and ABC expertsRefining business issues Analysis of business issuesDetermine business solution to issues12367Determine responsibilities/ functional specs of systems/appsPilots ofsolutions per business issueDetail specsand build applicationsRoll out (phased)1 week46 weeks24 weeks24 weeksInterviews sales, business, pricing, costing managementRefine business issuesReview current ABC structure and pricing policiesUnderstand business strategyCollect examplesAnalytical work Sales interviewsModel economics based on examples and selected countries/routesDiscussions with sales/business/ pricing managementCheck with business strategySelect example(s) per issueModel solutionIn parallel, develop organizational solution and high level functional spec for ABC improvements4551A4 Sample Slides.pptSales force best practice along key dimensionsPerformance evaluationOrganizationStrategySupport systemsMotivation and supervisionRecruitment,TrainingSource: Scholm; BCG analysisClear goals by region, product group for sales, profits, penetration, distributionConvincing value proposition by productClear definition of coverage of prioritized channels (by whom, how)Explicit role definition with well defined goals supported by clear planning (e.g., visit routes by territory)Attraction and development of people with strong skills, e.g.,Personal relations (customer, internal)Time managementPlanning, preparationSellingKnowledge (product, company, competitors, processes, etc.)Setting and measurement of concrete goals by salespersonTaking of corrective action as necessaryIncentive compensation clearly linked to strategy and motivatingRight span of supervisor control (68) with delegated responsibilityCoaching as a priorityFocus on maximization of selling time and minimization of administration, travel, etc.Effective (central) sales force supportExtensive use of computer support by front line52A4 Sample Slides.pptBest practice indicates that feedback and development should be integrated and embedded within organization (I)Performance planningPerformance summaryDefinition of targetsOngoing feedback processOngoing development53A4 Sample Slides.pptCustomer discovery further refines offerings by uncovering overlap between customer needs, supplier capabilitiesYour assetsPhysicalProcessesPeopleCompetitor assetsPhysicalProcessesPeopleProfit driversCLIENT competitive advantageCLIENTs capabilitiesCustomer needsCompetitorcapabilitiesCompetitor advantageNew opportunityUltimate deliverable: plan for improving customer satisfaction, loyalty, and share54A4 Sample Slides.pptPrioritize segments through assessment of market attractiveness and relative competitive positionKey criteria for assessing market attractivenessMarket sizeMarket growthIndustry marginsPrice trendsEntry barriersKey criteria for evaluating competitive positionRelative market shareRelative marginTechnological positionAccess to future growthCommand of key success factorsDevelop Divest? Keep opportunistic Accelerate 55A4 Sample Slides.pptApproach toward channel orchestration focused on optimizing trade-off between cost and effectivenessCost relation more favorable withchannel orchestrationKey principles to elaboratechannels orchestrationFocus on most attractive clients Eliminate low potential clients from portfolioDefine clear rules of allocation and migration across channels according to potential and actual revenuesOptimize utilization of resourcesAdequate capability and cost of resources according to taskRe-evaluate channel mix according to segment potentialOptimization of interaction between channels Clear rules and processesElimination of duplicities Re-evaluate compensation metrics, aligning them with operational goalsSource: BCG casework+Channel costClients potentialChannel effectivenessCallcenterSales repCurrentmodelChannel orchestration56A4 Sample Slides.pptFive steps to superior portfolio managementPortfolio strategySet baselineunderstand corporate context Develop strategyreshape portfolio15ExecutionTurnaroundGrowthAcquisitionDivestitureInnovationMarket attractivenessCompetitive positionLogic fitParenting fit?Ownership fit4Value fit3Strategic fit2Source: BCG CD Marketing Suite57A4 Sample Slides.pptBCG alliance buildersix steps to create successful alliancesFour types of strategic alliances with different success factorsM&A-likeExpertise providingCooperation for critical massCompetitors Non-competitors Partnershipdirection TotalPartialScope of allianceDefine alliance segmentsContinuouslyreshape portfolioEstablish alliance officeAlliance portfolio management6Continue,re-launch, or exitLearn from experienceIdentify gapsbetween goals and results Continuous evaluation5Design alliance organizationMonitor based on business criteriaAlliance management4Define governance and exit strategyClose deal or stop negotiatingEnter with strategic deal plan in placeNegotiation3Screen based on financial and strategic fitSelect based on alliance experience and cultural fitPartner search2Define alliance strategyDefine ideal deal structureAssess needsAlliance strategy1Source: BCG CD Marketing SuiteNew businessdevelopment58A4 Sample Slides.pptBCG HRV methodology provides an integrated viewon all relevant value componentsHigh-resolution valuationValue componentsImpact and feasibility of the transaction: implied multiples and TSR impact, internal feasibility (financing, management restriction), and external feasibility (regulatory approval)Strategic logic behind a possible acquisition clearly carved outRiskSystematic consideration of additional strategic- value componentsComprehensive identification of key risk drivers for the transaction and for the combined entityDriver-based stand-alone-value calculation with an underlying specific market modelSystematic quantification of potential synergies and dissynergies Stand-alone valueSynergiesStrategic valueSource: BCG CD Marketing Suite59A4 Sample Slides.pptTypical PMI process: Integration in four stepsPhase 0Phase 1(23 months)Phase 2(46 months)Phase 3(1224 months)Integration officeIntegration planningReadinessStrategy/organizationBaseline/targetsComm./change mgmt.Integration conceptIntegration detailing/implementation initiationImplementation startMeasure definition andcontrollingSigning Start integrationAuthorization/closingNew organizationImplementationMeasure implementationand trackingPreparation and integration setupFinalization M&A processSource: BCG CD Marketing Suite60A4 Sample Slides.pptMaps and timelines61A4 Sample Slides.pptBroad resistance to traditional anti-malarial drugsMalaria transmission occursS/P resistanceMefloquine resistanceChloroquine resistanceSource: World Malaria Report, 200562A4 Sample Slides.pptA loose federation of 27 members united by a common mission and brand US: $251MCanada: $13MHonduras: $2MNew Zealand: $7MMexico: $3MJapan: $2MDom. Rep.: $1MHong Kong: $1MSwaziland: $1MGuatemala: $2MAustralia: $17MUK: $247MNorway: $67MSweden: $55MItaly: $8MNetherlands: $5MSpain: $5MRomania: $2MIceland: $1MLithuania: $1MDenmark: $21MFinland: $15M. but divided by different donor markets and requirements, different views about food aid, sponsorship and advocacySource: Preliminary Save the Children Data (2004)requires verification/update63A4 Sample Slides.pptGerman market largest, Netherlands market most stableTotal market for office furniture in 2002, index 1998 = 1001,0735072381,8271,026BelgiumNetherlandsGermanyFranceUKSource: Interconnection64A4 Sample Slides.pptProject timingThree phased approachFact basis and setupCustomer discoveryRefine & synthesizeAddressable marketQuantification of addressable market sizeSegmentation of spend (products, services, capital, etc.)High level competitive assessmentResearch trend assessmentIdentification and evaluation of key trends in researchQuantification of implications on market size/growth and potential McKesson entryCustomer DiscoverySchedule and develop discussion guideConduct interviews, document resultsSynthesis and recommendationsClient read-outsInternal CTMKey deliverables1015 scheduled interviewsDiscussion guideAddressable market definition and sizeSegmentation and quantification of spend in relevant marketsHigh level competitive assessmentProjections of future research lab landscape based upon key industry trendsInitial results from Customer DiscoveryDetailed profile of customerSynthesized assessment of market attractiveness11/2812/512/1212/1912/261/21/91/1612/161/15Work stream65A4 Sample Slides.pptSales force effectivenessOverviewModule objectivesAlign recruitment, promotion and attrition policies with strategy and goalsDevelop a consistent hierarchy of metrics and management practices to enable best practice sharing and to identify issuesDevelop robust targeting approaches to enable more focused sellingProvide reps and managers with key information and tools to enhance effectivenessKey contactsBob Victor (Officer, Washington D.C.)Andrew Clark (Officer, Singapore)Ken Keverian (Officer, Boston)Debbie Lovich (Officer, Boston)Vaishali Rastogi (Officer, Singapore)Nikhil Bhojwani (Manager, Boston)Matt Diver (Project Leader, Boston)Included materialsKey QuestionsCentral questions which define scope of module and areas for further analysisKey AnalysesTypical analyses performed for this module based on previous BCG caseworkSample WorkplansSample workplans, timelines, team structureKey LearningsIntegrated learnings on key success factors from previous BCG case experienceVignettesHighlights from previous case work along this moduleImpactImpact ranges expected along EBIT margin and sales growth based on previous BCG experienceTopic PrimerIntroductory materials that provide basic definitions, key frame-works, and back-ground contextToolsAutomated mgmt support tools that can be imple-mented at client to support execution