ELIMINATIN G TH E

MIDDLEMA N ?
T EA M 6 | A MD

Kamal Kaushik H21023

Ankit Raj H21069
Sheshna Sekhri H21111
Shruti Batra H21112
 SITUATION ANALYSIS
Competition (Moderate) New Entrants (High)
• a Mid-ran ge player • Ch ina is a h uge m arket
• Sweet sp ot in VFM • Rise of sup plier capabiliti es
• How long will t his last ? • Is t heir ent ry inevit able?
• Low th reat f ro m Existi n g co mpeti ti on • Seemingly too go od t o be t rue End-End
• Pot enti al Chinese entrant s services

Question Question
• Should we shift positioning? • Can we co-exist in a market

Suppliers (High?) Customers (Low)

• Onl y one suppl ie r offe ri ng an e nd-to-end solut ion
• high risk, bot h fro m a liabilit y and st rat egy POV
• Is t his a market phenom enon or fi rm specifi c
• Premium players wit h high er qu alit y st andards
are manu fact uri ng.
• Cust ome rs are individuals wit h almost no
bargaining power
• Cust ome rs will swit ch wh en benefi t s out weigh
swit ch ing cost s
• Using cult ure/local cont ex t t o our advant age

Question Question
• Risk vs Switching costs • How to increase customer stickiness
 PURPOSIT QUESTIONING AND PROBLEM STATEMENT

1 SHOULD WE SHIFT OUR POSIT IONING? Continuous movement

towards premium
C o n s u m e r e l e c t r on i c s i n d u s t r y a l w a y s h a s
Threat of replacement
p l a y e r s a dd i n g m or e a n d m or e f e a t u r es , s l o w l y
creeping into the premium market
Availability of suppliers

2 C O-EXISTING IN THE SAME MAR KET Creating a Niche

Wi l l Ta i s o u r c e be t a rg e t i ng t h e s a m e s eg m en t a s
U S t e c h , c a n t h e r e b e a s u p p l i e r r e l at i o ns h i p i n
this new phase
PROBLEM
3 R ISK VS SWTICHING COSTS
STATEMENT
Whi le there may be i ni ti al swi tc hi ng cost s to
onboard new suppli ers, it wi ll del ay Tai source's How do we ga i n a nd re t a in
event ua l entry, qual i ty i s a non-i ssue.
globa l ma rke t sha re wi th a
c ont inuousl y c ha ngi ng
4 INC R EASING CUSTOMER STIC KINESS c om pe t itor la ndsc a pe
Probl em s wi th bei ng a c os t lea der in elect ronics,
diffe rent ia ti on possi ble only t hough added
feat ure s/ Ni che
KEY FOCUS AREAS

Mitigate Risk of Proprietary Issues and

To increase bargaining
Forward Integration loss of knowledge
power with suppliers
by Supplier from US Tech

To increase control in
To increase Market
process, cost, quality
share
and scheduling, ec
 Stakeholder Analysis
Stakeholder Influence Priorities Concerns Desired Outcome
Level (Reason for resistance)

Change in sourcing strategy, strategic

Greg Sustainable Mistrust with TS,
partnership with current suppliers
Global Sourcing Officer solution change in status quo

Dan High Sales & Future of business & Break into China market, assess the
Neutral competition & product positioning
VP, Marketing flexibility loss to competition

Ease tension with Cost-benefit analysis of options, build other

Morris Low
Future of business &
sourcing capabilities, facilitate the transition
Joe & find
Asian Sourcing Officer loss to competition
alternative in Asia mkt
Mistrust with USTech
Joe RoI with current
,loss of sole supplier
Forward Integration in next 5 years &
NE IL
CEO, TaiSource market status leverage on the strengths of US Tech
contract T RAN
May Sell the end-to- Loss of USTech & Retain US Content
Tech account and build
Neutral
CMO, TaiSource end solution their US capabilities Department
capabilities in US (R&D Units)
 Options Available
• Basis components & materials
1 MULT ISOURC ING STR AT E GY
• Product range
To diversify the numbe r of suppliers of US tech to • Increase rivalry | Volume distribution) -
redu ce dependen cy o n sole sourcing rela tionship Reverse Auction
w ith TaiSource • Find alternatives in China

2 GIVE A PR EMIU M | ACQ UISIT IO N • Offer premium to TaiSource for non-

To ensure the e ase of sourcing and not get into a compete contract
c omp etitive relationship. This reduce s the risk but • Buy (stake) in TaiSource - Backward
integration via Backward Integration
this w ill incre ase the cost to the company

3 ADD VAL UE TO TH E C URR EN T OFFER IN G

• From consumer electronics to end-to-end
Sinc e the c omp any is likely to be fac ed with customized solutions
simila r situations from other suppliers, the • Hardware + Software | R&D
company shou ld either inve st in increa sing brand • Unique after-sales service
value or diversify into other b usinesses • Increase footprint in B2B
 OPTION EVALUATION
ME TR ICS MULTISOUR CING SOL E SUPPLIE R BU IL DING USP

Co st
Ease of Int e grati on
Orgz. C apabilit y
Risk Reducti o n
Qualit y

The solution combination should be high value in Readiness for

aligning with long-term vision as well as the ease of Strategic Value
implementation in the organization Implementation
 RECOMMENDATIONS

MOVE BEYOND SOLE SOURCING RELATIONSHIP

01
Ke ep t h e design capabi lit y
wit h TaiSource
Ent e r int o a n on - co mpet e
fo rmal co nt ract ual
relati on sh ip wit h
TaiSource .
02
Focus o n a m ulti -
so urcin g st rat egy f rom
supplie rs fo r pro ducti on
of elect ro n ic prod uct s
fo r ent eri ng t he Ch in e se
m arket .
03
Ch an ge t h e po int of
co nt act fo r TaiSource.
Mor ris t o be made
re spo n sible for h an dilin g
t h e n ew supplie rs.
 ACTION PLAN
A Maintain Design c apability with TaiSource
1. In the short term, USTech needs to maintain the rela tion ship w ith
TaiSource since it does most of its designing a nd manufa cturing.
2. E nte r into a non-c ompe te c la use for the next 5 y ears to hedge a gainst the
risk in the nea r future.
3. E stablish the R&D in U S w ith TaiSource

B Formal Multi-Sourcing Pla nning Process

Gather data: pre -a ctivities to be carried out before looking for supplie rs
in C hina.
1. Morris to cond uct a be nchmarking: how other tech. g ia nts a re a ble to
maintain t he secrec y of the ir products in the Ch inese market.
2. Understand the supplier & distributor network in China by gathering
data
3. Initia te request for informa ti on an d quotations from su pplie rs.
4. Re ly on multiple suppliers to sourc e different p arts of the p roducts.
 THANK YOU

ANY QUESTIONS?