The future is now

Anton Herbst
“It is not the strongest of the
species that survives, nor the
most intelligent that survives. It
is the one that is the most
adaptable to change.”
Charles Darwin
Agenda
n How did we end up in this mess?
n How does this affect us?
n Printer and Consumables market
dynamics
n A look into the future
n What are our options?
n The way forward
n Q&A
How did we end up
in this mess?
People like this....
Lent money to
On properties like these.......
How does it affect
us?
How does it affect us?
n Local banks largely spared from crisis
because of
¨ Tight regulatory and debt to capital
requirements
¨ Foreign exchange controls
n It is about confidence
n Sharp increase in global risk aversion
wrecks havoc on emerging markets
How does it affect us?
n Global growth and corporate earnings
revised down continuously
n Infrastructural development and not
consumer demand is driving economy
n Commodities have come down steeply
reducing inflation risk
n Current account woes and portfolio flows
drive Rand
Recession....
CRB commodities index
Consumer stress
Infrastructural development
Current account woes

.
Portfolio flows
The Rand - a $/€ story
Déjà vu?
Printer market
S.A. Printer Market (units)
S.A. Printer Market (units)
S.A. Printer Market (Rand)
S.A. Printer Market (Rand)
But….
n Mono laser MFP volumes declined by
20% from Q1 08 to Q1 09
n Colour laser MFP volumes declined by
19% from Q1 08 to Q1 09 and
n Ink printer volumes declined by 19% from
Q1 08 to Q1 09
n Overall market volume dropped by 23%
and value by 33% from Q1 08 to Q1 09
Consumables
market
S.A. Consumables Market (units)
S.A. Consumables Market (value)
But….
n Mono laser cartridge volumes declined by
1.8% from H1 08 to H2 08
n Colour laser cartridge volumes declined by
12.2% from H1 08 to H2 08 and
n Ink cartridge volumes declined by 10.1%
from H1 08 to H2 08
n The overall market volume dropped by
8.8% from H1 08 to H2 08
In summary
n Strengthening Rand
n and declining volume sales
n plus locked in high costs
n in an environment where capital is scarce
n Requires different thinking
A look into the future
Longer term meta trends
n Economic globalization
n Product and service commoditization
n Sustainable development
n Urbanization
n Universal connectivity
n Convergence
n Social adaptation and modernization
06/02/09
What are our
options?
The typical reaction
 or
n We can respond strategically to these
trends by revisiting our
¨ Business model
¨ Supply chain model
¨ Communication model
n in a collaborative development process
over the next 18 to 24 months
Business model
 Our assumption

n Every successful company operates to an

effective business model
 The elements
n Four interlocking elements that create and
deliver value i.e.
¨ Customer value proposition
¨ Profit formula
¨ Key resources
¨ Key processes
 Customer value proposition
(CVP)
n Target customer
n Job to be done to solve a problem or fulfil
a need
n Offering which satisfies need or solve
problem
 Profit formula
n Revenue model (Volume X Price)
n Cost structure
n Margin model
n Resource velocity
 Key resources
n Those resources that are needed to
deliver the CVP
¨ People
¨ Technology
¨ Equipment
¨ Information
¨ Channels
¨ Brand
 Key processes
n Those processes that are makes delivery
of the CVP repeatable and scalable
¨ Processes like Marketing, I.T., Sales
¨ Rules and metrics
¨ Norms or rules of the game
Supply chain model
Challenges in the supply chain
n Information flows faster than products
n Product life cycle from cradle to grave
is accelerating
n Products proliferate to create short
windows of opportunity
n Inbound lead time in weeks –
outbound in hours
n
Challenges in the supply chain
n Investment in inventory at all levels in
supply chain (just in case)
n Silo-based approach to supply chain
management
n Very limited visibility across the
supply chain
Challenges in the supply chain
n Volatile
currency and price instability
n Continual margin erosion to gain
economies of scale
n Shrinkage
n Green supply chain
What prevents us from working
together?
n Disparate systems
n Price pressures
n Bandwidth
n Trust
n Relationships at operational level only
Evolution of adaptive supply chains
Communication
model
A complex world
n Multi-generational audiences (internal and
external)
n Multiple, disparate communication
platforms and mechanisms
n No longer bound by physical and time
boundaries
n Requires significant customization of
messaging
A complex world
n No longer uni-directional
n Social media tools are proliferating and so
are the people using them
Social Media – What’s all the
fuss
n 1. It’s enormous
n 2. Broadening demographic
n 3. Everyday routine
What is social media and web 2.0
n Groundswell:
¨a social trend
¨ in which people use technologies
¨ to get the things they need from each other instead of
from companies
n Web 2.0:
¨A set of applications
¨ enabling efficient interaction among people, content,
and data
¨ to collectively foster new business practices and
What is social media and web
2.0
n Social media: Blending web 2.0 tactics into the
marketing mix to engage with customer
communities and draw value from social
interaction.
n But
n It does not replace face to face
relationships but offers a rich set of tools
that support and enhances the
relationship
The way forward
The next 18 to 24 months
n We need your input in the business model
process
n We need honest relationships more than
ever
n Get out of command & control mode and
into connect and collaborate mode
n Embrace social media as a platform of
communication
The next 18 to 24 months

n Investin research, systems,

relationships now to get ready
for the next wave
 Thank you for your
time!

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