1、SAMSUNG010605BJ-kickoff2,CONFIDENTIAL,Mobile Handset Competitor Analysis: Siemens,SAMSUNG ELECTRONICS CHINA (SEC China),August 20, 2001,This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization witho
2、ut prior written approval from McKinsey it is not a complete record of the discussion.,SAMSUNG010605BJ-kickoff2,1,OVERVIEW OF COMPETITOR ANALYSIS FRAMEWORK,1. Background information,Location Registered capital Management team Equity structure,Starting year Number of employees Era analysis,4. Value c
3、hain strategy,5. Organization and ownership,6. Financial performance,Focus on Marketing, advertising and promotion Distribution (channel and sales force),Organization structure Ownership structure,Sales Profit,2. Strategy,3. Product/market,Mission Vision Corporate strategy Market position,Key produc
4、t offerings Key customers Value proposition Geographic focus Pricing,SAMSUNG010605BJ-kickoff2,2,KEY ISSUES TO PROBE - SIEMENS,Strategy,Product/market,Value chain strategy,Organization & ownership,Financial performance,What does Siemens aim to be in 2005 in mobile communication? How are Siemenss prod
5、uct and value delivery system strategies different from its competitors? What will be Siemenss future products and which segments of the market will it target at? In which segment of the market is Siemens strong or weak? What is the key success factors for Siemens to pick up market share quickly sin
6、ce 1999? How does Siemenss distribution channel differ from its competitors? How capable is Siemens in R&D, manufacturing, sales and marketing? With a broad product portfolio, how does Siemens organize or reorganize itself? How does Siemens perform and is its performance expected to improve further?
7、,SAMSUNG010605BJ-kickoff2,3,BACKGROUND INFORMATION,1. Background information,Location Registered capital Management team Equity structure,Starting year Number of employees Era analysis,4. Value chain strategy,5. Organization and ownership,6. Financial performance,Focus on Marketing, advertising and
8、promotion Distribution (channel and sales force),Organization structure Ownership structure,Sales Profit,2. Strategy,3. Product/market,Mission Vision Corporate strategy Market position,Key product offerings Key customers Value proposition Geographic focus Pricing,SAMSUNG010605BJ-kickoff2,4,CHINA HAS
9、 DEVELOPED INTO A MAJOR PILLAR FOR SIEMENS BUSINESS IN ASIA PACIFIC,Based at Germany 50+ JVs, 28 offices in China Shanghai is the largest Siemens location outside Germany,Invested USD 0.44 billion in China,All business sectors of Siemens including information and communication, automation and contro
10、l, power, transportation and household appliance, etc.,Entered Chinas telecommunication in 1985 Information and communication business started 1991,30,000 staff in information and communication mobile globally 25,000 employees for all business sectors in china,1982 Siemens Beijing office opened 1985
11、 entered Chinas telecommunication market 1990 established JV Beijing International Switching System 1994 Siemens China founded in Beijing 1998 formed business segment - Information and Communication 2000 joined forces with CATT and Huavei for next generation mobile technology. Founded TD-SCDMA inter
12、national forum with Datang, CATT, Huawei, Motorola, Nortel, China mobile, and Unicom,Implication,An early entrant to Chinas telecommunication market Broad product portfolio representing all business sectors of Siemens worldwide,Source: Siemens press release,SAMSUNG010605BJ-kickoff2,5,STRATEGY,1. Bac
13、kground information,Location Registered capital Management team Equity structure,Starting year Number of employees Era analysis,4. Value chain strategy,5. Organization and ownership,6. Financial performance,Focus on Marketing, advertising and promotion Distribution (channel and sales force),Organiza
14、tion structure Ownership structure,Sales Profit,2. Strategy,3. Product /market,Mission Vision Corporate strategy Market position,Key product offerings Key customers Value proposition Geographic focus Pricing,SAMSUNG010605BJ-kickoff2,6,SIEMENS AIMS TO BE NUMBER 2 IN MOBILE COMMUNICATION MARKET IN CHI
15、NA,Focus on stylish new models with suitable pricing targeting mid to low end of the market Invest in future products, e.g., TD-SCDMA handsets and wireless home network devices, etc.,Strategy,Establish R&D centers for mobile communication in Beijing and Shanghai Mobile handset production capacity be
16、ing raised to 14 million in Shanghai, a growth of 40% since 2000 Intensive marketing on new products with most competitive pricing Carefully select exclusive channel partner PTAC to maintain uniform price level nationwide to ensure healthy sales Helps resellers set up service centers to handle repai
17、r and maintenance,Vision To be number 2 in the Asian mobile communication market (without Japan and Korea),SAMSUNG010605BJ-kickoff2,7,SIEMENS IS RISING STEADILY IN MOBILE HANDSETS SINCE 1999,Monthly market share development (Percent of market in units sold),98,99,Jan 00,Dec 00,Nokia,Motorola,Siemens
18、,Ericsson,Source: Retail Audit,Source: IDC, McKinsey Analysis,SAMSUNG010605BJ-kickoff2,8,SIEMENS HAS OVERTAKEN ERICSSON TO BE NO.3 IN MOBILE HANDSET BY BOTH REVENUE AND SALES VOLUME,Others,Siemens,Ericsson,Motorola,1999,2001,2000,Samsung,Nokia,Breakdown of sales by brand each year Percent,Source: Gf
19、K, IDC, McKinsey analysis,Others,Siemens,Ericsson,Motorola,1999,2001,2000,Samsung,Nokia,Breakdown of units sold by brand each year Percent,SAMSUNG010605BJ-kickoff2,9,PRODUCT/MARKET,1. Background information,Location Registered capital Management team Equity structure,Starting year Number of employee
20、s Era analysis,4. Value chain strategy,5. Organization and ownership,6. Financial performance,Focus on Marketing, advertising and promotion Distribution (channel and sales force),Organization structure Ownership structure,Sales Profit,2. Strategy,3. Product /market,Mission Vision Corporate strategy
21、Market position,Key product offerings Key customers Value proposition Geographic focus Pricing,SAMSUNG010605BJ-kickoff2,10,Siemens offers a compete range of mobile communication solutions including devices, infrastructure and applications. Siemenss mobile handsets come with good quality and competit
22、ive pricingSiemens targets the mid to low end of the mobile handset market. Most of its models are in the price range from below RMB 1000 to RMB 2200Siemens has devoted great attention to the important 4th-tier cities and west China, hence its market share in these developing areas are relatively hi
23、gher than its share in the more developed areas.,KEY MESSAGES - PRODUCT/MARKET,SAMSUNG010605BJ-kickoff2,11,SIEMENS OFFERS A COMPLETE RANGE OF MOBILE SOLUTIONS INCLUDING DEVICES, INFRASTRUCTURE AND APPLICATIONS,Products,Now and future,Information and communication mobile,Siemens product offerings,Inf
24、ormation and communication networks,Mobile network Wireless home network & office network Mobile handset C2588 (small, light smart) S2588 (brain truster) 3508 (small, light, sexy) 3518i (tough enough) 3568i (smart thinking),Broadband network IP network Fixed-line network Transmission network Office
25、network Cable network,Take TD-SCDMA mobile handsets to serial production level by 2003 Offer the complete range of mobile solutions including mobile devices, infrastructure and applications, e.g., wireless home network, Complete range of GSM, GPRS and UMTS mobile networks, unified messaging and mobi
26、le payment,Overall strategy of “a universe of one“, pursuing IP driven voice and data communication and customer- oriented end-to-end solution and services,Source: Siemens press release,SAMSUNG010605BJ-kickoff2,12,SIEMENS MODELS HAVE THE MOST COMPETITIVE PRICING,Source: McKinsey Analysis,Product pos
27、itioning Dec 2000,A6188 (1.4%),8850 (1.8%),V8088* (3.9%),S800C (1.2%),A100 (0.8%),T28 (3.6%),8210 (4.6%),7.8%,21.9%,18.2%,52.2%,Business/professional,Personal,*WAP phone,Product positioning June 2000,9110,S800C (1.8%),V8088 (1.6%),8850 (1.7%),V998 (5.6%),3568* (0.5%),S600C (3.8%),7110* (0.9%),T28 (3
28、.3%),8210 (3.7%),LF2000* (2.9%),6150 (1.8%),L2000* (4%),S2588 (1.8%),CD928 (1.1%),T18 (6.1%),T10 (1.2%),C2588 (3.2%),2188 (3.8%),L2088 (2.5%),3210 (2.2%),5110 (9.6%),368C (3.1%),3508 (1.6%),338C (0.6%),T2688 (4.8%),11.4%,17.4%,25.3%,45.9%,High,High- medium,Medium- low,Low,Business/professional,Perso
29、nal,*WAP phone,V998+ (6.9%),7689i (1.8%),LF2000i* (1.7%),3568* (1.7%),7110* (0.3%),6150 (0.9%),600C (2.3%),3310 (6.8%),3518i (1.8%),T18 (3.3%),CD928 (0.1%),S2588 (0.2%),C2588 (0.1%),T10 (0.7%),T2688 (6.2%),3508 (3.9%),V2088 (1.0%),3210 (9.6%),5110 (5.9%),Retail price,High,High- medium,Medium- low,Lo
30、w,Retail price,RMB 3,500,RMB 2,200,RMB 1,600,368C (2.3%),V2188 (1.3%),RMB 3,500,RMB 2,200,RMB 1,600,Red - Nokia White - Motorola Blue - Ericsson Brown - Siemens Green - Samsung,8250 (0.0%),6210 (0.6%),SAMSUNG010605BJ-kickoff2,13,SIEMENS TARGETS MID TO LOW END OF THE MARKET,High ( RMB 3,500),Source:
31、Sino-MR (Jan 2001 Feb 2001), CCID,Breakdown of unit sold by brand for each price point Percent,High-mid (RMB 2,500-3,500),Mid (RMB2,000-2,500),Mid-Low (RMB1,500-2,000),Low (RMB1,500),Others,Siemens,Ericsson,Motorola,Samsung,Nokia,9%,15%,7%,Units as % of total,26%,43%,7,SAMSUNG010605BJ-kickoff2,14,Ti
32、er 1,Tier 2,Tier 3,Tier 4,Nokia,Motorola,Others,SIEMENS ALSO ADDRESSES THE IMPORTANT 4TH TIER CITY MARKET,Percent market share, 2000,Ericsson,Siemens,18%,19%,23%,40%,Tier size as % of total,100%=,Million units,6.7,7.0,8.5,14.8,Source: McKinsey Analysis,SAMSUNG010605BJ-kickoff2,15,SIEMENS IS RELATIVE
33、LY STRONG IN CENTRAL, EAST AND WEST,Market share by brands per geographic area, 2001 Percent,Market share by geographic area Percent,East,Siemens,Ericsson,Samsung,Others,Nokia,Motorola,West,North,North-east,South,30,13,15,13,11,Central,18,Source: GfK, McKinsey Analysis,SAMSUNG010605BJ-kickoff2,16,VA
34、LUE CHAIN STRATEGY,1. Background information,Location Registered capital Management team Equity structure,Starting year Number of employees Era analysis,4. Value chain strategy,5. Organization and ownership,6. Financial performance,Focus on Marketing, advertising and promotion Distribution (channel
35、and sales force),Organization structure Ownership structure,Sales Profit,2. Strategy,3. Product/market,Mission Vision Corporate strategy Market position,Key product offerings Key customers Value proposition Geographic focus Pricing,SAMSUNG010605BJ-kickoff2,17,Siemenss value delivery system strategy
36、has evolved since 1999. It has invested $1.5 billion in the Asian Pacific area as its Asian offensive campaignSiemens has spent a great effort in localizing R&D and manufacturing. It has built R&D centers in Beijing and Shanghai and has raised the mobile handset production capacity in Shanghai to 14
37、 million units in 2001. It is a leader in TD-SCDMA 3G technology in ChinaSiemens has achieved a market share of 12% in sales volume, after intensive marketing of new models with competitive pricing, and aims to increase its market share to 15%Siemens distributes through exclusive 1st-tier national r
38、eseller PTAC and 2nd-tier provincial resellers. A uniform price level in the market is maintained nationwide to ensure healthy sales.,KEY MESSAGES - VALUE CHAIN STRATEGY,SAMSUNG010605BJ-kickoff2,18,SIEMENS VALUE DELIVERY SYSTEM HAS EVOLVED OVER THE YEARS,From. . . (1997),To. . . (2000),No R&D facili
39、ty in China No product localizationProduction capacity in Shanghai Pudong (150,000) 60% of products for Chinese market produced in Hong KongBrightpoint handling over 90% of distributionMarket share less than 5%,ProductProduction DistributionMarketing,High commitment to TD-SCDMA tests across China in
40、 2001 Asian offensive campaign with US 1.5 billion investment in R&D and marketing until 2003Production capacity in Shanghai has been raised to 14 million units from 10 million units in 2000 Uses different distributor (PTAC), but still only one nationwideMarket share 12% as a result of intensive mar
41、keting of new models with competitive pricing,Aims to increase market share to 15%,Source: Interviews, McKinsey analysis,SAMSUNG010605BJ-kickoff2,19,SIEMENS INVESTS TREMENDOUS EFFORT IN EVERY PART OF THE VALUE CHAIN,Strengths,R&D centers for mobile communication in Beijing and Shanghai with more tha
42、n 500 engineers planned Lead international forum in TD-SCDMA Frequent introduction of new models,Continuously increase local production capacity and capability,Intensive marketing on new models with competitive pricing,Healthy sales through exclusive channel partner PTAC,Capable after-sales service
43、with 100 service stations nationwide,Levers for improvement,Lacks capability in W-CDMA and CDMA 2000,Fully dependent on single national distributor,Source: World computer journal, McKinsey analysis,SAMSUNG010605BJ-kickoff2,20,SIEMENS VALUE DELIVERY SYSTEM IS ORGANIZED AROUND PRODUCT LINES WITH MULTI
44、PLE CUSTOMER INTERFACES,Value delivery system,Customer interfaces,IC Mobile and IC Network communicate with the same telecom operators separately, with “multiple faces”,Source: McKinsey analysis,SAMSUNG010605BJ-kickoff2,21,SIEMENS DISTRIBUTES THROUGH EXCLUSIVE NATIONAL RESELLER PTAC,Source: IDC,Rati
45、onalesSiemens partners with PTAC, taking advantage of their streamlined and efficient distribution channels. PTAC is selected as the exclusive national distributor due to resources and image. A uniform price level in the market is maintained nationwide to ensure healthy sales,Siemens Channel Structu
46、re,Rely on both 1st-tier national reseller PTAC and 2nd-tier provincial resellers Devote much attention to low-tier city market,Vendor,1st-tier resellers,Consumers,2nd-tier resellers,Retailers/retail chain stores,12%,9%,79%,67%,12%,67%,12%,21%,SAMSUNG010605BJ-kickoff2,22,ORGANIZATION AND OWNERSHIP,1
47、. Background information,Location Registered capital Management team Equity structure,Starting year Number of employees Era analysis,4. Value chain strategy,5. Organization and ownership,6. Financial performance,Focus on Marketing, advertising and promotion Distribution (channel and sales force),Org
48、anization structure Ownership structure,Sales Profit,2. Strategy,3. Product /market,Mission Vision Corporate strategy Market position,Key product offerings Key customers Value proposition Geographic focus Pricing,SAMSUNG010605BJ-kickoff2,23,With a large product portfolio covering information and com
49、munication and home appliances etc. Siemenss organization is product focused with clear lines of P&L responsibilitiesSiemens has over 50 JVs and WOFEs in China with large commitments in telecommunication. Siemens Shanghai is devoted to mobile communication including mobile handsetsSiemenss joint ven
50、tures are managed under their own global BU, and Siemens China, the holding company, coordinates and provides shared services for the global BU activities in ChinaSiemens is starting to centralize sales and marketing to better handle solution sales, and the goal is to consolidate all marketing and sales functions under Siemens directly,
