Note that there is no precision to the plotting of points. It's down to judgement, and don't spend too much time worrying about precisely where to place each company strategy. To avoid overcrowding, I try to keep the label for each point down to 2-3 words—a fuller description of the activity is given in the notes.
Here are the notes for the chart above:
Acquire:
HP-EDS: HP is acquiring EDS—both have strong SAP competencies. Clients want 'one throat to choke‘.Oracle: Oracle is acquiring large and small ISVs in order to maintain high (admittedly inorganic) growth rates, and because it has the cash.
HP: SaaS vendor: HP is expected to make an acquisition in the SaaS or Cloud Computing space.
Dell: Solutions: Dell acquiring MessageOne and other small, niche firms to build itself into a solution provider.
Infosys: N. Europe vendor? Infosys is strongly tipped to make a consulting acquisition in northern Europe this year valued at $300-400m. Its reasons: the US slowdown means the firm cannot rely on organic growth to achieve its stated targets; and Infosys has the largest cash reserves of any Indian vendor.
Expand geographically:
TCS: Morocco: Build sales centres on-shore or near-shore to target countries. For example:TCS expanded into Morocco for its French (and Spanish) language skills as a means of targeting France and Spain, and TCS is building centres in the Middle East to target markets in the Middle East.
EMC: Disk #1: Target any country where they aren't No. 1 in their field.
Accenture: US skills: Transplant experience grown in one geography to another geography—e.g. Accenture is expected to bring its US-cultivated skills in lean Six Sigma and Command-and-Control systems to Europe.
Wipro: NEIOT: Expand in familiar or similar markets, rather than targeting culturally different markets—for instance, Wipro is expected to step up a gear in northern and eastern Europe before it goes after southern Europe. And there are similarities between much of SW IOT and Latin America. Wipro is relatively small in Latin America, so is unlikely to go after southern Europe while there remains so much potential in the more familiar northern Europe.
Sage: Diversity: Emphasise (to investors and customers) the protection offered by the diversity of their portfolio, particularly in the BRIC countries—for example, Sage and IBM.
Accenture: Grow Europe: Focus sales resource systematically on specific cities—as Accenture has done with its Grow Americas and Grow Europe campaigns.
Sales resource actions:
Dell: Indirect: Increase use of the indirect channel. For example, DSG has agreed to sell Dell laptops and desktops at its PC World stores in much of Europe, including Spain, Greece and Italy.HP, FSC, Cisco: Channel loyalty: Focus more channel resources on those partners who show greater commitment.
HP: Unix specialists: Switch sales responsibility from generalists to specialists—as HP has successfully done with its Unix servers.
HP: Cross-sell: Focus on cross-selling and 'attach' rates—for example, HP is pushing a integrated approach, designed to sell products from all three business units—servers, storage, PCs and printers.
Concentrate on customer needs:
Accenture: Client Value: Focus intensely on the growth and value the firm can bring to each client—as Accenture does in its planning process.HP: Virtualisation: HP is capitalising on a strong market for virtualisation in the data centre.
EDS: Cust Sat and Capgemini: Intimacy: Get closer to big customers and potential customers—as Capgemini is doing with its client intimacy strategy, and EDS did last year by soliciting client feedback on its services capabilities in Outsourcing. (EDS discovered this approach improved its win rate on new contracts.) Fujitsu Services has an open book accounting relationship with some clients to share financial information about the cost of servicing their contacts.
Accenture: Datacentres: Data centre consolidation is a popular theme, and Accenture is growing its Systems Integration services there.
Dell: Simplify IT: And Dell is pushing a Simplify IT message, for which capability Dell has made seven acquisitions.
Improve reliability of revenue streams:
Some vendors shift towards reliable and predictable sources of future revenue…SAP: Withdraw budget support: Raise prices in subtle ways—for example, SAP is withdrawing its entry-level support options.
Dell: services: Re-position the firm as a supplier of higher-value annuity offerings—as Dell is trying to do by changing perceptions from box-shifter to solution provider.
Accenture: Public Sector: Target the Public Sector as a robust source of spending less affected by economic conditions than most sector. Despite its troubled reputation in the Public Sector as a result of withdrawing from the UK Health Service mega-deal, Accenture is trying to re-establish itself in that sector.
CA: support: Look to the annuity revenues provided by services contracts and software rental/support—for example, Sage and Computer Associates.
Make a strategic commitment:
Accenture: BI?: Declare a key investment area each year—a broad technological area where the firm needs to spend in order to achieve at least parity with the industry leader. HP has also identified BI / Data Warehousing as a major growth area.Focus on existing customers and strengths:
Narrowing their client focus – i.e. avoiding being spread too thinly – may create disproportionate dividends in their chosen niches.Some firms are narrowing their sales focus to a specific set of customers—as Ericsson has done by selling off its PBX business which sold to a full range of verticals. It now sells only to telcos and service providers, which means its SRs can be more specialised.
Atos: niches: For firms already in trouble, launch a strategic recovery programme—for example, Atos Origin with its '3o3' transformation plan.
EDS: installed base: EDS tends to be much better at selling to its installed base than in acquiring new customers in new locations.
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