1. G1RD-CT-2002-00698 e-Volution Page 1 Task 2.2: MARKET MODULE CONCEPT e-Volution II - Roadmap for e-business implementation in Extended Enterprises Mr. Roberto Citarella, UNISA Innova Rome, 13 May 2004

2. G1RD-CT-2002-00698 e-Volution Page 2 MARKET MODULE CONCEPT 1.PRELIMINARY OT ANALYSIS - Product and Market Assessment - Purchasing criteria analysis - Competitors analysis - Comparison analysis - Influence of e-business on the EE market 2. OT ANALYSIS FOCUSED ON E-SOLUTIONS - E-sales - E-procurement

3. G1RD-CT-2002-00698 e-Volution Page 3 MARKET ANALYSIS: preliminary approach 1.P/M assessment, by using Market segmentation analysis and Portfolio matrix; 2.Purchasing criteria analysis guide customers in their choice during the purchasing process. They are identified and prioritised and then assessed by managers who identify the internal value creating processes that most heavily influences them. 3.This activity aims to describe the most important competitors and gain an understanding of their strengths and weaknesses, compared to the EE under analysis. 4.The qualitative comparison with the previous analysed competitors, using charts and graphics in order to support the manager to recognise the areas on which improving actions have to be taken. 5.This step aims to provide understanding about the O.T. that e-business represents for the market environment and for the specific EE. These activities are designed in two step: gathering detailed information together with OT identification and description. Internal Analysis External Analysis Final Summary Situation Analysis Strategy Development Project Description Project Implementation and Results evaluation Check List for Situation Analysis 1. Assess Products and markets 2. Analyse Purchasing Criteria 5. E-business impact analysis on the market and the EE 4. Comparison with the competitor Summary of the analysis 3. Competitors analysis

4. G1RD-CT-2002-00698 e-Volution Page 4 Product and Market assessment Product Market table Financial data in the P/M table P/M area attractiveness “E” assessment of : - P/M area - Competitive position – Product definition – Market definition – Contribution margin analysis – Matrix representation – Total assessment Competitive position in P/M area Matrix portfolio assessment – P/M area choice Internediate SWOT analysis – SWOT item identification

5. G1RD-CT-2002-00698 e-Volution Page 5 Product and Market assessment Product Market table Financial data in the P/M table P/M area attractiveness “E” assessment of : - P/M area - Competitive position – Product definition – Market definition – Contribution margin analysis – Matrix representation – Total assessment Competitive position in P/M area Matrix portfolio assessment – P/M area choice Internediate SWOT analysis – SWOT item identification PRODUCT – MARKET MATRIX IDENTIFICATION

6. G1RD-CT-2002-00698 e-Volution Page 6 Product and Market assessment Product Market table Financial data in the P/M table P/M area attractiveness “E” assessment of : - P/M area - Competitive position – Product definition – Market definition – Contribution margin analysis – Matrix representation – Total assessment Competitive position in P/M area Matrix portfolio assessment – P/M area choice Internediate SWOT analysis – SWOT items identification TURNOVER CONTRIBUTION MARGIN CONTRIBUTION RATIO The values of this matrix will influence the following assessment of the market attractiveness, providing automatic default values for filling in the P/M attractiveness table; Future financial data are foreseen by using Neural Network algorithm;

7. G1RD-CT-2002-00698 e-Volution Page 7 Product and Market assessment Product Market table Financial data in the P/M table P/M area attractiveness “E” assessment of : - P/M area - Competitive position – Product definition – Market definition – Contribution margin analysis – Matrix representation – Total assessment Competitive position in P/M area Matrix portfolio assessment – P/M area choice Internediate SWOT analysis – SWOT items identification I =  PiLi PiLi Pi Pi PiLi PiLi Pi Pi 0.Definition of the scale used on the two axis of the matrix (Attractiveness e Competitive position) 1.Choice of the most important factors related with the Attractiveness and Competitive position 2.Evaluation of factors relevance (weighting phase - Pi -) for the Attractiveness and competitive position of each P/M areas 3.Evaluation of the level (L i ) for each analysed factors (Qualitative assessment of predefined questions) 4.Total assessment determined by Attractiveness and Competitive position index for the specific P/M area, according to the following formula

8. G1RD-CT-2002-00698 e-Volution Page 8 Product and Market assessment Product Market table Financial data in the P/M table P/M area attractiveness “E” assessment of : - P/M area - Competitive position – Product definition – Market definition – Contribution margin analysis – Matrix representation – Total assessment Competitive position in P/M area Matrix portfolio assessment – P/M area choice Internediate SWOT analysis – SWOT items identification H H H M M M MM M M M M H L L L I =  PiLi PiLi Pi Pi PiLi PiLi Pi Pi Total evaluation for each P/M areas P/M ATTRACTIVENESS TABLE COMPETITIVE POSITION TABLE

9. G1RD-CT-2002-00698 e-Volution Page 9 Product and Market assessment Product Market table Financial data in the P/M table P/M area attractiveness “E” assessment of : - P/M area - Competitive position – Product definition – Market definition – Contribution margin analysis – Matrix representation – Total assessment Competitive position in P/M area Matrix portfolio assessment – P/M area choice Internediate SWOT analysis – SWOT items identification H = High M = Medium L = Low for qualitative answer. Graduation of influence of e- business on attractiveness and EE position on the specific P/M area The answers influence directly the position of the second bubble in the following Matrix representation. The 2nd bubble provide a clear picture of the future tendency

10. G1RD-CT-2002-00698 e-Volution Page 10 Product and Market assessment Product Market table Financial data in the P/M table P/M area attractiveness “E” assessment of : - P/M area - Competitive position – Product definition – Market definition – Contribution margin analysis – Matrix representation – Total assessment Competitive position in P/M area Matrix portfolio assessment – P/M area choice Internediate SWOT analysis – SWOT items identification First P/M area Second P/M area P/M area attractiveness Weak Low High Strong 2nd priority Not a priority3rd priority EE position in the P/M area 1.st priority2nd priority Not a priority3rd priority Matrix areaDescription 1 st Priority:High score on both attractiveness and competitive position. 2 nd Priority:High score on attractiveness but not on the EE competitive position  the EE should decide whether it is possible to achieve a better position in the market. 3 rd Priority:High score on EE competitive position but a low score on attractiveness  assessment of how attractive is this market, and if this is enough to render an acceptable profit ('milk' the P/M areas for as long as possible without making too large investments) Not a priority:Low score on both attractiveness and EE position  consider withdrawing from the market if profits are not satisfactory or future prospects are not brighter. The position of the bubbles in the Matrix quadrants influence the P/M areas choice.

11. G1RD-CT-2002-00698 e-Volution Page 11 Purchasing criteria analysis 1/4 1.Gather information about customers' purchasing criteria, and about the way in which your organisation accomplish them; Internal workshop by Marketing department Direct or phone interview Market research 2.Research results documentation; 3.Assess how your main competitors satisfy customers' purchasing criteria and benchmarking; 4.Conclusion: EE’s SWOT assessment according to the investigation of consumers' purchasing criteria – Product quality – Delivery precision – … Purchasing criteria prioritised Value creating activities’ identification – Production – Distribution – ….. Performance assessment – Qualitative assessment of each internal value creating activities – Comments – e-solution id. INTERMEDIATE SWOT ANALYSIS EE Purchasing criteria analysis Competitors Purchasing criteria analysis FINAL SUMMARY Benchmarking between the EE criteria and the competitor n°1 for each specific criterion.

12. G1RD-CT-2002-00698 e-Volution Page 12 Purchasing criteria analysis 2/4 1. Purchasing Criteria identified & prioritised 2. Value creating activites identification 3. Performance assessment 4. Cause description 5. E-solution contribution

13. G1RD-CT-2002-00698 e-Volution Page 13 Purchasing criteria analysis 3/4 1. Purchasing Criteria identified & prioritised 2. Performance assessment 3. Cause description 4. E-solution contribution TEMPLATE FOR COMPETITOR ANALYSIS

14. G1RD-CT-2002-00698 e-Volution Page 14 Purchasing criteria analysis 4/4 These qualitative values are picked from the previously analysed tables. Summary: the EE vs competitors

15. G1RD-CT-2002-00698 e-Volution Page 15 Competitor analysis1/2 Competitor's position in the market and competitive advantages Assessment of competitor's value creating activities – S.W. – P/M areas served by the competitor – Competitor's market position and market share Description of competitors’ current e-solution Intermediate OT Analysis – Information (one way) – Communication (two way) – Trade/e-Commerce – Business Integration – Based on the description and the assessment of main competitors – describe intermediate OT elements

16. G1RD-CT-2002-00698 e-Volution Page 16 Competitor analysis2/2 Description of competitors’ current e-solution for each value creating activities

17. G1RD-CT-2002-00698 e-Volution Page 17 Comparison with competitors1/3 1.Summary assessment of how the EE fulfils the customers' purchasing criteria in comparison with its competitors; 2.Summary assessment of EE’s productivity compared to those of the direct competitors; 3.Assessment of EE’s current e-solutions (if any) compared with its competitors‘; 4.Description of strengths, weaknesses, opportunities and threats based on the summaries above. INTERMEDIATE SWOT ANALYSIS - Purchasing criteria analysis - Value creating act. analysis - E-solution analysis Extended Enterprise Competitors FINAL SUMMARY Benchmarking between the EE and the competitors Purchasing criteria comparison

18. G1RD-CT-2002-00698 e-Volution Page 18 Comparison with competitors (Value creating act. Analysis) 2/3 Support activities Primary activities

19. G1RD-CT-2002-00698 e-Volution Page 19 Comparison with competitors (e-solution) 3/3 Examples of e-solution – Information (one way) – Communication (two way) – Trade/e-Commerce – Business Integration

20. G1RD-CT-2002-00698 e-Volution Page 20 E-business impact on the EE market Information gathering O.T description of EE partners Specific e-business related survey (MM help on line - CSP); External link by using the Information Selector (CSP - WWW) EE networks Trade association DESCRIPTION OF OPPORTUNITY Opportunity definition Improvement of current business /new business model Improvement the Opportunity create in term of cost, revenues, market situation DESCRIPTION OF THREATS Threats definition Threats description Description of how this threat may influence costs, revenues or market position OpportunityImpact on business model Opportunity descriptionCosts Improvements Access to more customers both national and international Improvement of existing business models Internet sales allows to sell to more customers. They may use their own Web site or a marketplace for buying the products. Less sales costs per customer

21. G1RD-CT-2002-00698 e-Volution Page 21 COMPLETE FRAMEWORK PRELIMINARY APPROACH

22. G1RD-CT-2002-00698 e-Volution Page 22 OT ANALYSIS ( based on the ranking algorithm ): STEPS and STAGES Market requir ement s Tre nd Ana lysi s Cust omer s Anal ysis Comp etitio n Analy sis Products /services Analysis TREND FINDING TREND FILTERING TREND FORMATTING TREND FOCUSING Sup plier s Ana lysi s IN CASE OF E-PROCUREMENT ANALYSIS Three kind of analysis allowed: 1. E-SALES 2. E-PROCUREMENT Each analysis is divided in steps and each step is divided in stages. 1. Collecting data 2. Ordering data table 3. Charts and Histograms 4. Ranking Algorithm

23. G1RD-CT-2002-00698 e-Volution Page 23 OT ANALYSIS ( based on the ranking algorithm) : FINAL SCENARIOS Opportunities Start from trend analysis:  Country C (rank=60) Customer analysis:  Customers G (rank=33)  Customers M (rank=30)  Customers H (rank=29) Competitors analysis:  Competitor W (rank=10)  Competitor B (rank=13)  Competitor A (rank=22) Product analysis:  Product T (rank=48)  Product J (rank=37)  Product S (rank=32) Threats Start from trend analysis:  Country H (rank=12) Customers analysis:  Customers D (rank=15)  Customers K (rank=22)  Customers E (rank=26) Competitors analysis:  Competitor E (rank=43)  Competitor J (rank=36)  Competitor Q (rank=35) Product analysis:  Product O (rank=15)  Product C (rank=26)  Product R (rank=27) OUTPUT OPPORTUNITIES AND THREATS QUANTITATIVE PORTFOLIO GENERATION  At the end of the Market Analysis, four final classifications generated by the system concerning the four stages of analysis (TREND, CUSTOMERS/SUPPLIERS, COMPETITORS, PRODUCTS AND SERVICES).  Possibility of choosing the stage considered the most interesting to start the final scenario from.  Automatic alignment for each of the three elements of other stages having the highest rank for the country/region of the segment selected.