COVISINT EBIZ 504 e-Business Strategy Feb. 12, 2001 Marquita Alicia McKenney Minho Cho Dale Pudney

Contents Company overview - Alicia Business model - Minho The objectives The players Business model - Minho Revenue model Benefits / Value proposition Issues & 6C Analysis - Dale Issues 6C analysis Recommendations

Company Overview WEB FOUNDED TEMPORARY HQ EMPLOYEES VALUATION PARTNERS COMPETITION www.covisint.com February 2000 Southfield, Michigan 200 $59 billion General Motors, DaimlerChrysler, Ford Motor Company, Renault, Nissan, Commerce One, Oracle (B2B) Ariba Networks, Freemarkets and others (suppliers, other automakers)

One Year Performance Sheet Signed up 20 suppliers Auctions 80 times seven clients Catalogs log up and running on servers 100s supplier

CO VIS INT CO-VIS-INT means… Connectivity,Collaboration, Communication,Cooperation VIS INT International visibility on the Internet, vision Integration, Internet, International

The Objectives The vision for Covisint is to build an online environment to achieve the following goals Reduce development cycle from 40 to12-18 month Compressed order-to-delivery cycles Greater asset efficiency and utilization Higher profitability with direct impact to the bottom line More integrated supply chain planning Reduced business process variability

The Players Founding Partners Business Partners Technology Partners 5 major automakers Business Partners Automotive suppliers (Potential 90,000 suppliers) Technology Partners Commerce One will provide the e-marketplace software, while Oracle will provide e-business applications

Business Model - Purpose Increase speed Increase efficiency Improve communications

Business Model - Services Sourcing, or identifying new sources of supply Negotiating Transacting and payment Supply chain management functions Collaborative design and product life cycle work

Business Model - Changes Traditional COVISINT Paper, Phone, FAX E-mail, On-line Competition Collaboration Time consuming Speed Uncertainty Certainty

Revenue Model One-time licensing fees Flat transaction fees Variable rate transaction fees

Benefits / Value Proposition OEMs and suppliers. Savings in procurement costs. Better information flows between OEMs and suppliers. Better product development front through to capacity decisions. Improvements in inventory holding requirements. End Customer. Total estimated savings: about $1,188 per vehicle in North America. about 80 % of that could be passed on to the consumer through price reductions. Mission: TO BE THE AUTOMOTIVE EXCHANGE OF CHOICE.

Who Saves Most ? 66% $1,188 Dealer OEM Tier1 Tier2 Tier3 Tier4 Total Source: Roland Berger 66% $1,188 Dealer OEM Tier1 Tier2 Tier3 Tier4 Total 12% 48% 18% 13% 7% 2%

Issues Suppliers Competition Neutrality and anticompetitive practices Concerned about price pressures Not joining is economic suicide Competition 1,000s of B2B exchanges Other auto makers & suppliers forming independent exchanges Neutrality and anticompetitive practices Aggregate purchases Always be within the competitive law

Issues Leadership Integration Competitors in bed together Over eager Loan CEO, permanent leadership missing Integration Legacy and back-office systems High cost Competitors in bed together Political infighting Over eager Unfulfilled capability claims

  6C Analysis 1 Context & Competition Suppliers acceptance - Par +  1 Context & Competition Suppliers acceptance Standards for fragmented industry 2 Connectivity  3 Community New platform for existing community Easier communication fosters closer community

6C Analysis 4 Communications - Par + 4 Communications Improved communication offers supply chain optimization 5 Content Standards

Recommendations Standards Leadership Emphasis on Value Add

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