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GROUP 8 Nikhil | Rishav | Sameer | Poulomi | Anupriya | Anshumali

Company Overview 1. 2. 3. 4. 5. 6.

1971 1988 2007


Delta Electronics 8 Electronics
th Developed the
founded by Bruce company to be worlds first
C.H. Cheng listed on Taiwan company wide
Started with Stock Exchange Green map
producing electronic system
components for TV

1973 1992 2008


Global Oil First plant in Listed as Global
crises and Dongguan in top 100 Low-
impacted the China Carbon Pioneer
Taiwanese by CNBC
Industry European
Delta Electronics is looking forward to enter in the growing future segment of ElectricMagazine
or Hybrid
Propulsion vehicles as a sub-system provider to big companies and to enter the tier-two automotive
market in China
Hybrid Electric Vehicles 2. 3. 4. 5. 6.

HEV combines battery and electrical drive system with an Internal Combustion engine & Fuel efficiency
is generated through the combination of energy optimization and Breaking energy (Toyota Prius is the
best example which has mileage of 26.3 Kmpl)
Expansion into HEV Powertrain segment Justified? 3. 4. 5. 6.

SWOT Analysis Porters Analysis of HEV Powertrain


Segment
Strengths Weaknesses Competitive Rivalry- New Entrants - HIGH
Market adjacency From No experience in HIGH New tier-2 manufacturers
industrial automation automotive powertrains Segment is growing, so coming up threat of IP
business to automotive No knowledge about not many existing big infringement
components system level issues of players Chinese new entry due to
Core competency in automobiles and the Industry in growth stage cheap factors of production
manufacturing energy impact on sub-systems Some existing big Huge opportunity of
efficient (~96%) No collaboration with any players Toyota Growth in HEV/PHEV
electronic components automobile manufacturer experimenting with segment would attract
A complete turnkey solar to support prototyping Toyota Prius new entrants
PV solution provider Powertrains not a core Governmental and legal
Understanding on competency of the firm Bargaining Power of barrier is low. Government
Opportunities
Chinese market 4 Threats Buyers-HIGH supportive of green energy.
New tier-two
decades automobile
presence Unwillingness of Tier-1 Tier-1 manufacturers Threat of Substitute
players in China market automakers to buy for exercise great power in Gasoline powered
willing for subsystem fear of losing control of terms of control
purchases system design HEV performance
Growth in HEV/PHEV Sharing and theft of IP directly linked to the Technology Partners -
segment huge (Intellectual Property) with powertrain Collaborators
opportunity tier-2 Chinese automakers Custom-designed Some part of technology
Opportunity to New entrants in China due powertrains would be support was from outside.
leapfrog established to cheap factors of required Collaboration Partnering with Ricardo-
auto-manufacturers production needed for system level expertise
Only company
Vehicle Controlto focus
Unit on powertrain systems among Manufacturers viewed on vehicles.
most important Taiwanese
for car tech firms this an excellent
Strategic approach to Design Historical 4. 5. 6.

Historical Approach of Delta Electronics

Delta Electronics wanted to stay with the Industrial Automation


rather than venturing into the Automotive market as its entry
barriers were very high
Industrial automation was highly profitable for the company
whereas the automotive sector was very competitive
The organization was focusing more on becoming leader in
Power management solution provider for Computers,
Information Technology, Telecom, Networking Gear and
Consumer products
The company was focusing most of its resources in the
development of Green Energy Solutions and alternate energy
resources
Delta produced Solar Optoelectronic modules which were used
Delta
as roofElectronics
panels on took a chance
the stadium ofof venturing
2009 World into Automotive
games in Taiwan
Industry as a key supplier for the development of components
for electric vehicle
This was in line with its long term mission of To provide
innovative, clean and energy efficient solutions for a
better tomorrow
Strategic approach to Design Hybrid Powertrain 4. 5. 6.

Core Competency: Deltas core competency lies in design and manufacturing of energy-efficient power management and
automation systems.
They had years of learning in the energy efficiency domain after manufacturing electronic components for TV, PC & laptop, UPS,
Partnership
batteries with
and solar Ricardo Win-Win
PV industries.
To benefit by the rich expertise of Ricardo in Engines, Transmissions (automatic transmissions & Torque Vectoring) &
Structure (Noise, Vibration, Harshness, Thermal Systems and Safety)
To benefit by gaining deeper understanding of system-level issues with hybrid electric vehicles and their impact on
those components and subsystems
To become an independent subsystem supplier by leveraging its core competency and access to latest technology and
designing techniques by Ricardo
To cover itself under Ricardos patents and hence reduce risk of brand dilution and IP infringement
Platform approach to design
Build a common platform for each different frame size for different car sizes A frame, B frame, etc
Core circuitry and core designs will be the same. Dimensions, outside mounting will change as required
Strategy reduces design (engineering) fees since customers (Chinese manufacturers) wont pay high fees
Downside of the platform approach: Even low-volume customers need lot of customization Design would not be
optimized on cost or performance which a complete integrated customer design might offer
Parallel Management Approach
A separate BU setup to develop & supply components for electric vehicles. Shared manager model
Automotive and industrial control 2 departments, 1 common manager, 2 different product design teams
Once these incubated units got larger, a separate manger would be put in place to run it
Using existing CashFlows to fund investment; Investments not so big incremental changes only to existing capabilities
and technologies
Hire new people for technologies that they didnt have expertise in and build the expertise slowly by finding and utilizing
resources internally
Distributed Intelligence approach

Deltas Response to Customers Demand 5. 6.
Countering threat of imitation

Dedicated Joint Team


A team from Delta to be sent to Chinese client to help them make changes and customize
control unit as per its specific vehicle design and characteristics

Become Major Supply and slowly Family Member Supplier Relationship


Convince Chinese client for making itself a major supplier to develop strong supplier
relationship
Form inter-organizational teams for product development and design
Use simultaneous engineering as an approach to designing the components together

Data analytics
Through distributed intelligence approach, industrial automation is updated through two
phases- upper layer for master control and execution layer at device level
The various sensors at the execution level like shaft encoders, voltage or temperature
sensors, will incorporate fair amount of intelligence. This will make duplication harder
Countering threat of Imitation 6.
Countering threat of imitation
A B
Distribute Upper Layer Constant Innovation-Upgrading
d Master layer the technology of vehicle control
control unit in short intervals will deter
intelligenc
imitation
Execution Layer
e
Device level
incorporating feedback C
from sensors Sign enforceable contracts &
build long term relationships,
Worked well for where protecting IP is a mutual
Industrial benefit for Delta as well as
automation Chinese customers
Simple duplication
will not give access Automotive industry
to the know-why has higher focus on D
costs-such systems
Filing Patent for the new
Imitation lag-Slow
will shoot up the cost technology- This is a strong
down the rate of
copying Higher volumes- method of protecting IP but China
Chinese customers difficult to install has a poor legal system and hence
can control the patents are easily copied.
master layer &
execution layer could
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