Guest Blogger: Greg Hazlett, Principal, Global Supply Chain Services, Tompkins Associates
Greg lives in the San Francisco Bay Area and is an expert in helping high-tech companies – including manufacturers and distributors of computer hardware and software, consumer electronics, semiconductors, components and peripherals, and capital equipment – improve their global supply chain activities.
As high-tech companies continue to find their way in this new economy, many have either circled back around to, or discovered for the first time, Strategic Market Planning. Below are a few words of wisdom on the subject from a recent Tompkins’ article entitled, Top 10 List of Issues/Opportunities Facing High-Tech Companies.
It’s no secret that high-tech companies thrive on innovation. This innovation creates products that are “first to market,” “feature rich,” “easy to use,” “low cost,” or sometimes simply “trendy.” Success comes from gaining a leading and sustainable position in the served markets.
To achieve this position, a strategic market plan will combine market and competitor intelligence, assessment of the addressable opportunity and a penetration strategy.
It is an execution plan to compete in the selected markets to maximize profitable growth by answering the following questions:
• What is the best strategy to achieve our growth objectives?
• Will a merger or acquisition be required? Can it accelerate achievement of our goals?
• What is the market? What opportunities are available and how can we penetrate them?
• How do we serve the customer and achieve our profit objectives?
• What does the customer expect, and how can we deliver the best value proposition?
• Is the investment feasible? How profitable will it be?
Many high-tech companies develop great strategic market plans, but fall short in the execution. You see this a lot today. With the strong economic rebound, demand for many products often exceeds supply, resulting in allocation for many manufactures, distributors and retailers.
When a company finds itself on allocation, it adversely affects sales, margin realization, and can even disrupt or cut short the life cycle of the product(s). By performing a thorough strategic market plan, high-tech companies:
• Initiate new growth plans with better visibility into the challenges and opportunities by comparing the value proposition of alternative paths.
• Improve their timing and entry point into new markets.
• Achieve more effective distribution strategies in their sourcing, supply and distribution channels to improve cost, quality and reliability of supply.
• Develop more effective partnerships and acquisitions that deliver higher strategic value.
• Find cost reductions (margin enhancements) by incorporating dual sourcing strategies, improved inventory management from manufacturing through distribution, and comprehensive transportation and distribution strategies.
For high-tech companies, the rapid pace of technology advancements and market acceptance place a premium on the speed in which they can enter markets and react to forces that impact the balance between demand and supply.
The old cliché, “time is money,” still holds true. In the high-tech industry, how well the product meets market expectations and how prepared the organization is to meet these challenges will often dictate to what degree a product achieves its full potential. More on strategic market planning.
-- Greg
Photo Credit: alancleaver_2000