android barcode scanner api java Case #2: Crane design in Software

Generating Code 3/9 in Software Case #2: Crane design

Case #2: Crane design
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A manufacturer of mobile hydraulic cranes identified a strategic threat in the rough-terrain market A significant competitor had targeted the 0- to 50-ton segment, growing market share at the manufacturer s expense
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Mkt Share (2 yrs prior) Competitor Our Company
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Current Mkt Share 307% 442%
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10: Finding the Complexity That Customers Value
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Margins were eroding due to the competitor s aggressive pricing and a market shift to lower-margin products A global survey was launched to understand the Voice of the Customer The survey included conjoint analysis to identify key marketing requirements for the new crane and statistically establish customer preference data As shown in Figure 1010, the most important feature was, surprisingly, boom length, not price The medium boom length was almost as desirable as the longest, but the third choice would not have been marketable Customers would pay significantly more for the stronger load chart
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Figure 1010: Conjoint Analysis of Cranes
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0 PRICE BOOM LOAD WEIGHT PERMIT SETUP OUTLENGTH CHART RIGGERS
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Though the company expected price to be the most important purchasing factor, it turned out that boom length was the priority for customers
Conclusion: Considering complexity when developing customer-focused strategies
As P&G, Unilever, and many others have found, conquering complexity both reduces costs and spurs growth: the redeployment of resources to other parts of the value chain improves profitability and focus But a key to unlocking this growth is knowing what your customers want, and how much of it they want, and creating a flexible process to deliver it when they want it at lowest cost This analysis not only accelerates growth, but also prevents new products or services from coming to market with non225
Conquering Complexity in Your Business
value-add features that impose a cost on your company You can offset or minimize the costs associated with providing differentiated offerings to desirable market segments if your strategies include: Strong segmentation by target markets and customers Variety to meet the needs of the target markets Focus on the value creators We need a clear understanding of who our profitable customers are and the variety and breadth of offerings required to capture and retain this target market Clarity in this helps us avoid proliferation that does not add value and which may clutter the branding Proliferation usually clusters around the segments of high value, the premium categories where market share does equal value; but as we ve discussed, value can erode over time as customer expectations change Consider the cosmetics industry: Japan s Shiseido, the world s fourth-largest cosmetic company, updates its offerings as frequently as every month8 Says president Akira Gemma: We see our customers as our own competitors We need to move ahead not because other brands are doing so but because our customers needs are changing
Endnotes
1 See a brief bio for Kimberly Watson-Hemphill on p 246, note 1 2 Dell and Magretta, The Power of Virtual Integration (see chap 3, n 1) 3 B Joseph Pine II, Bart Victor and Andrew C Boynton, Making Mass Customization Work, in Markets of One: Creating Customer-Unique Value through Mass Customization, ed James H Gilmore and B Joseph Pine II (Boston: Harvard Business School Press, 2000) 4 Mass Market Retailer, April 16, 2002, citing an Information Resources Inc study, quoted in Do Consumers Have Too Many Choices, Food Distributor Magazine, July 2001 5 Michael McGrath, Product Strategy for High Technology Companies: Accelerating Your Business to Web Speed (New York: McGraw-Hill, 2000) 6 Raju Nariseti, How IBM Turned Around its Ailing PC Division, The Wall Street Journal, March 12, 1998 7 We would like to thank Bruno Ternon for his valuable input on this topic Mr Ternon is the Director for the European Office of George Group Consulting His experience includes more than 18 years of experience in new product development for a number of different industries ranging from consumer goods, to high technology products for the defense industry, to the heavy construction industry During this period, he personally led numerous projects from a white paper concept to full production He is an expert in Product Cost Reduction and Complexity Reduction 8 Kathleen M Eisenstadt and Shona L Brown, Time Pacing: Competing in Markets that Won t Stand Still, Harvard Business Review, March 1, 1998
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