Cases
Each case study represents real work with a specific client. The name of the client is omitted for reasons of confidentiality.
International new business creation
A large, European company wanted to improve upon its track record for identifying and acquiring technology companies that could support and help grow its core businesses. Historically, target companies were either identified too late in the process and were acquired by competitors before their potential alignment could be determined, or the company grew to be so large that the ultimate acquisition was extremely expensive and more difficult to integrate.
The proposed solution that was taken was to create a group focused solely on the identification of strategically interesting companies at an early stage of their development. The group had to be international from the beginning (in order to identify and work with the smaller companies) but had to be anchored at the company’s headquarters in order to maintain alignment with the strategic direction of the core business.
The group grew to open offices in the United States, Germany, Israel, China, and India. It successfully identified 69 strategically relevant companies and helped create commercial relationships with 46 of them – ultimately leading to 5 acquisitions.
Being successful with your international customer
International markets present companies with new revenue opportunities and new sales channels, while also being very challenging when compared to comfort of your home market. Different cultures, languages, business practices and new expectations on suppliers can lead to lost business and damaged reputations, when not established carefully
This case study involves a Japanese Consumer Electronics company and two US based solutions providers. The consumer product was a new class of handheld device using a newly released highly integrated SOC chipset and a new OS; each from US suppliers. The customer had a very aggressive schedule, with design start to production of less than 8 months.
Through close pre-planning with our customer we jointly established a response and detailed resolution process target, of less than 48 hours from 1st report. The process consisted of very open and straight forward communications as part of an on-site joint review team that matched the customer’s own detailed internal process requirements.
The entire process was lead by the local sales team, to ensure full compliance and error free communications. In addition, on-site US engineers were in place for the majority of the schedule. The product was released on schedule.
As a result, the Japanese MITI (Ministry of International Trade and Industry) presented the US Company with its yearly award for the best international cooperation between Japanese and foreign company.
Software marketing strategy increased sales by 600%
Technical software is highly competitive. Customers typically run benchmarks and compare feature sets as a routine part of the sales process. The problem with this is that new software can take a long time to develop traction in the market, because each new product, while it may be strong in certain areas, has to compete with the full feature set of incumbent products.
In this case, we were engaged with the marketing of software for IC physical design. The challenge was to persuade customers to move from their existing products to a new product.
The insight that led to a successful marketing strategy was to do with the rate of change in our client’s industry. As Moore’s Law drives down the cost of semiconductors, and drives up the complexity, new physical phenomena must be addressed in the design tools. The key capabilities of the product in question had to do with the ability to respond to new physical issues in semiconductor design (specifically multiple layers of metallization).
The positioning strategy involved three key elements:
- Evidence that a move to the new technology was inevitable, based on timelines of the manufacturing companies
- An argument that moving earlier would allow a customer to be better positioned to take advantage of the new technology
- An argument that waiting until the last moment to move would result in high risk, in an industry where one missed deadline can destroy a year’s revenue.
In addition to these elements, we were able to reduce acquisition risk for existing customers, offering them a smooth transition for existing contracts.
The result was an unprecedented rate of takeup for the new product: in this case an increase in the close rate of 600% over previous results. The product rapidly became the market segment leader.
Corporate revitalization
A semiconductor company with about $200M in annual revenues found themselves in trouble after the management team grew the company without supporting revenue and new strategic direction. In addition a change in market conditions created a situation where the company was moving rapidly towards bankruptcy.
The investors brought in an interim CEO and COO to manage the turnaround. One of our partners took the position of interim COO.
While the Q1 results showed a $9M loss, the Q2 results were almost break-even with Q3 results showing a $6.5M profit. This was achieved by renegotiating manufacturing contracts and streamlining the organization.
Cost improvement in the manufacturing operations during the first three months amounted to $30M annualized. Immediate improvements were achieved in backend operations, while more long term improvements cam from closing the wafer fabs and taking the company fabless. Overall improvements amounted to $50M savings annualized.
Two of the business units were restructured to increase profitability by simplifying the approach towards business and sales, and through better alignment towards the market requirements.
By the end of the 6 month assignment the spending and revenues were balanced, the organization although significantly reduced, was working more efficiently to implement the new strategies.
Product launch acceleration
In the commercial furniture industry, new products typically take a long time to ramp up to full production. The time taken is often as long as seven years. One reason for this is the difficulty of moving from prototypes to full production, while there are inevitable teething troubles associated with the details of a complex product.
We were engaged to help not only with the positioning, but also with the operational strategy for the launch of a new commercial furniture product. We identified the management of expectations both with the channel and with early customers as a primary cause of frustration in the launch process, and our strategy centered around the resolution of these issues.
As with many products, alpha and beta cycles are typical elements of the launch of a new offering. The alpha is very early, intended for product validation. The beta is close to production, and primarily tests functionality, quality, and the overall value proposition.
Our approach added a third stage, which we called the gamma phase. Customers who participated in the gamma phase operated under a very clear set of expectations:
- The product might be built in short runs, and therefore be subject to greater variation than would be the case for a normal product
- The company would guarantee rapid turnaround on any issues with the gamma product
- The customer would agree to use the product in a small-scale, but normal operational mode
- The customer would agree to provide a positive reference, subject to being satisfied with the product.
The result of this approach was that the channel understood that gamma product could not be sold to “anyone”—it was a limited run product. The customer understood the characteristics of the product. While the gamma phase was in process, the client ramped up normal manufacturing capacity, and gradually switched gamma customers to normal product.
The overall impact of this strategy was that the product in question ramped to full production faster than any similar product in the history of our client’s business, exceeding expectations by several years.