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1、CONFIDENTIALMobile Handset Competitor Analysis: SiemensSAMSUNG ELECTRONICS CHINA (SEC China)August 20, 2001This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval fro

2、m McKinsey & Company. This material was used by McKinsey & Company during an oral presentation; it is not a complete record of the discussion.SAMSUNG010605BJ-kickoff2OVERVIEW OF COMPETITOR ANALYSIS FRAMEWORK1. Background informationLocationRegistered capitalManagementteamEquitystructureStarting year

3、Number of employeesEra analysis4. Value chain strategy5. Organization and ownership6. Financial performanceFocus onMarketing, advertising and promotionDistribution (channel and sales force)Organization structureOwnership structureSales Profit 2. Strategy 3. Product/market MissionVisionCorporate stra

4、tegyMarket positionKey product offeringsKey customersValue propositionGeographic focusPricing1SAMSUNG010605BJ-kickoff2KEY ISSUES TO PROBE - SIEMENSStrategyProduct/marketValue chainstrategyOrganization &ownershipFinancialperformanceWhat does Siemens aim to be in 2005 in mobile communication?How are S

5、iemenss product and value delivery system strategies different from its competitors?What will be Siemenss future products and which segments of the market will it target at?In which segment of the market is Siemens strong or weak?What is the key success factors for Siemens to pick up market share qu

6、ickly since 1999?How does Siemenss distribution channel differ from its competitors?How capable is Siemens in R&D, manufacturing, sales and marketing?With a broad product portfolio, how does Siemens organize or reorganize itself?How does Siemens perform and is its performance expected to improve fur

7、ther?2SAMSUNG010605BJ-kickoff2BACKGROUND INFORMATION1. Background informationLocationRegistered capitalManagementteamEquitystructureStarting yearNumber of employeesEra analysis4. Value chain strategy5. Organization and ownership6. Financial performanceFocus on Marketing, advertising and promotion Di

8、stribution (channel and sales force)Organization structureOwnership structureSales Profit 2. Strategy 3. Product/market MissionVisionCorporate strategyMarket positionKey product offeringsKey customersValue propositionGeographic focusPricing3SAMSUNG010605BJ-kickoff2CHINA HAS DEVELOPED INTO A MAJOR PI

9、LLAR FOR SIEMENS BUSINESS IN ASIA PACIFICLocationBased at Germany50+ JVs, 28 offices in China Shanghai is the largest Siemens location outside GermanyInvestmentInvested USD 0.44 billion in ChinaBusinessAll business sectors of Siemens including information and communication, automation and control, p

10、ower,transportation and household appliance, etc.StartingEntered Chinas telecommunication in 1985Information and communication business started 1991Employees 30,000 staff in information and communication mobile globally25,000 employees for all business sectors in china History1982 Siemens Beijing of

11、fice opened1985 entered Chinas telecommunication market1990 established JV Beijing International Switching System1994 Siemens China founded in Beijing1998 formed business segment - Information and Communication2000 joined forces with CATT and Huavei for next generation mobile technology. Founded TD-

12、SCDMA international forum with Datang, CATT, Huawei, Motorola, Nortel, China mobile, and UnicomImplicationAn early entrant to Chinas telecommunication marketBroad product portfolio representing all business sectors of Siemens worldwideSource: Siemens press release4SAMSUNG010605BJ-kickoff2STRATEGY1.

13、Background informationLocationRegistered capitalManagementteamEquitystructureStarting yearNumber of employeesEra analysis4. Value chain strategy5. Organization and ownership6. Financial performanceFocus on Marketing, advertising and promotion Distribution (channel and sales force)Organization struct

14、ureOwnership structureSales Profit 2. Strategy 3. Product /marketMissionVisionCorporate strategyMarket positionKey product offeringsKey customersValue propositionGeographic focusPricing5SAMSUNG010605BJ-kickoff2SIEMENS AIMS TO BE NUMBER 2 IN MOBILE COMMUNICATION MARKET IN CHINA Product Focus on styli

15、sh new models with suitable pricing targeting mid to low end of the market Invest in future products, e.g., TD-SCDMA handsets and wireless home network devices, etc.Strategy Value delivery system Establish R&D centers for mobile communication in Beijing and Shanghai Mobile handset production capacit

16、y being raised to 14 million in Shanghai, a growth of 40% since 2000Intensive marketing on new products with most competitive pricing Carefully select exclusive channel partner PTAC to maintain uniform price level nationwide to ensure healthy sales Helps resellers set up service centers to handle re

17、pair and maintenanceVisionTo be number 2 in the Asian mobile communication market (without Japan and Korea) 6SAMSUNG010605BJ-kickoff2SIEMENS IS RISING STEADILY IN MOBILE HANDSETS SINCE 1999Monthly market share development (Percent of market in units sold)9899Jan 00Dec 00010203040NokiaMotorolaSiemens

18、 EricssonSource: Retail AuditSource: IDC, McKinsey Analysis7SAMSUNG010605BJ-kickoff2SIEMENS HAS OVERTAKEN ERICSSON TO BE NO.3 IN MOBILE HANDSET BY BOTH REVENUE AND SALES VOLUMEOthers SiemensEricssonMotorola3332342927268777810599181714199920012000Samsung NokiaBreakdown of sales by brand each yearPerc

19、entSource: GfK, IDC, McKinsey analysisOthers SiemensEricssonMotorola34293032282888981012387151714199920012000Samsung NokiaBreakdown of units sold by brand each yearPercent8SAMSUNG010605BJ-kickoff2PRODUCT/MARKET1. Background informationLocationRegistered capitalManagementteamEquitystructureStarting y

20、earNumber of employeesEra analysis4. Value chain strategy5. Organization and ownership 6. Financial performanceFocus on Marketing, advertising and promotion Distribution (channel and sales force)Organization structureOwnership structureSales Profit 2. Strategy 3. Product /marketMissionVisionCorporat

21、e strategyMarket positionKey product offeringsKey customersValue propositionGeographic focusPricing9SAMSUNG010605BJ-kickoff2Siemens offers a compete range of mobile communication solutions including devices, infrastructure and applications. Siemenss mobile handsets come with good quality and competi

22、tive pricingSiemens targets the mid to low end of the mobile handset market. Most of its models are in the price range from below RMB 1000 to RMB 2200Siemens has devoted great attention to the important 4th-tier cities and west China, hence its market share in these developing areas are relatively h

23、igher than its share in the more developed areas. KEY MESSAGES - PRODUCT/MARKET10SAMSUNG010605BJ-kickoff2SIEMENS OFFERS A COMPLETE RANGE OF MOBILE SOLUTIONS INCLUDING DEVICES, INFRASTRUCTURE AND APPLICATIONSProductsNow and futureInformation and communication mobileSiemens product offeringsInformatio

24、n and communication networksMobile networkWireless home network & office networkMobile handsetC2588 (small, light smart)S2588 (brain truster)3508 (small, light, sexy)3518i (tough enough)3568i (smart thinking)Broadband networkIP networkFixed-line networkTransmission networkOffice networkCable network

25、Take TD-SCDMA mobile handsets to serial production level by 2003Offer the complete range of mobile solutions including mobile devices, infrastructure and applications, e.g., wireless home network,Complete range of GSM, GPRS and UMTS mobile networks, unified messaging and mobile payment Overall strat

26、egy of a universe of one, pursuingIP driven voice and data communication and customer-oriented end-to-end solution and services Source: Siemens press release11SAMSUNG010605BJ-kickoff2SIEMENS MODELS HAVE THE MOST COMPETITIVE PRICINGSource:McKinsey Analysis Product positioning Dec 2000A6188 (1.4%)8850

27、 (1.8%)V8088* (3.9%)S800C (1.2%)A100 (0.8%)T28 (3.6%)8210 (4.6%)7.8%21.9%18.2%52.2%Business/professional Personal*WAP phoneProduct positioning June 20009110S800C (1.8%)V8088 (1.6%)8850 (1.7%)V998 (5.6%)3568* (0.5%)S600C (3.8%)7110* (0.9%)T28 (3.3%)8210 (3.7%)LF2000* (2.9%)6150 (1.8%)L2000* (4%)S2588

28、 (1.8%)CD928 (1.1%)T18 (6.1%)T10 (1.2%)C2588 (3.2%)2188 (3.8%)L2088 (2.5%)3210 (2.2%)5110 (9.6%)368C (3.1%)3508 (1.6%)338C (0.6%)T2688 (4.8%)11.4%17.4%25.3%45.9%High High-mediumMedium-low Low Business/professional Personal*WAP phoneV998+ (6.9%)7689i (1.8%)LF2000i* (1.7%)3568* (1.7%)7110* (0.3%)6150

29、(0.9%)600C (2.3%)3310 (6.8%)3518i (1.8%)T18 (3.3%)CD928 (0.1%)S2588 (0.2%)C2588 (0.1%)T10 (0.7%)T2688 (6.2%) 3508 (3.9%)V2088 (1.0%)3210 (9.6%)5110 (5.9%)Retail price High High-mediumMedium-low Low Retail price RMB 3,500RMB 2,200RMB 1,600368C (2.3%)V2188 (1.3%)RMB 3,500RMB 2,200RMB 1,600Red - NokiaW

30、hite - MotorolaBlue - EricssonBrown - SiemensGreen - Samsung8250 (0.0%)6210 (0.6%)12SAMSUNG010605BJ-kickoff2SIEMENS TARGETS MID TO LOW END OF THE MARKETHigh( RMB 3,500)Source: Sino-MR (Jan 2001 Feb 2001), CCIDBreakdown of unit sold by brand for each price pointPercentHigh-mid(RMB 2,500-3,500)Mid(RMB

31、2,000-2,500)Mid-Low(RMB1,500-2,000)Low (RMB1,500)565123241629323400121013141615433010550171800020Others SiemensEricssonMotorolaSamsung Nokia9%15%7%Units as % of total26%43%713SAMSUNG010605BJ-kickoff231303024293028109911107772125243028Tier 1Tier 2Tier 3Tier 4NokiaMotorolaOthersSIEMENS ALSO ADDRESSES

32、THE IMPORTANT 4TH TIER CITY MARKETPercent market share, 2000EricssonSiemens18%19%23%40%Tier size as % of total100%=Million units 6.77.08.514.8Source: McKinsey Analysis14SAMSUNG010605BJ-kickoff2SIEMENS IS RELATIVELY STRONG IN CENTRAL, EAST AND WESTMarket share by brands per geographic area, 2001Perce

33、ntMarket share by geographic areaPercent293129312828302529262926141613131117987581315121513146410571311EastSiemensEricssonSamsungOthersNokiaMotorolaWestNorthNorth-eastSouth3013151311Central18Source: GfK, McKinsey Analysis15SAMSUNG010605BJ-kickoff2VALUE CHAIN STRATEGY1. Background informationLocation

34、Registered capitalManagementteamEquitystructureStarting yearNumber of employeesEra analysis4. Value chain strategy5. Organization and ownership 6. Financial performanceFocus on Marketing, advertising and promotion Distribution (channel and sales force)Organization structureOwnership structureSales P

35、rofit 2. Strategy 3. Product/market MissionVisionCorporate strategyMarket positionKey product offeringsKey customersValue propositionGeographic focusPricing16SAMSUNG010605BJ-kickoff2Siemenss value delivery system strategy has evolved since 1999. It has invested $1.5 billion in the Asian Pacific area

36、 as its Asian offensive campaignSiemens has spent a great effort in localizing R&D and manufacturing. It has built R&D centers in Beijing and Shanghai and has raised the mobile handset production capacity in Shanghai to 14 million units in 2001. It is a leader in TD-SCDMA 3G technology in China Siem

37、ens has achieved a market share of 12% in sales volume, after intensive marketing of new models with competitive pricing, and aims to increase its market share to 15%Siemens distributes through exclusive 1st-tier national reseller PTAC and 2nd-tier provincial resellers. A uniform price level in the

38、market is maintained nationwide to ensure healthy sales.KEY MESSAGES - VALUE CHAIN STRATEGY17SAMSUNG010605BJ-kickoff2SIEMENS VALUE DELIVERY SYSTEM HAS EVOLVED OVER THE YEARS From. . . (1997)To. . . (2000)No R&D facility in ChinaNo product localizationProduction capacity in Shanghai Pudong (150,000)6

39、0% of products for Chinese market produced in Hong KongBrightpoint handling over 90% of distributionMarket share less than 5%ProductProduction DistributionMarketing High commitment to TD-SCDMA tests across China in 2001Asian offensive campaign with US 1.5 billion investment in R&D and marketing unti

40、l 2003Production capacity in Shanghai has been raised to 14 million units from 10 million units in 2000 Uses different distributor (PTAC), but still only one nationwideMarket share 12% as a result of intensive marketing of new models with competitive pricingAims to increase market share to 15% Sourc

41、e: Interviews, McKinsey analysis18SAMSUNG010605BJ-kickoff2SIEMENS INVESTS TREMENDOUS EFFORT IN EVERY PART OF THE VALUE CHAIN R&D Manufacturing and supply chainMarketing and branding Sales and distribution Service StrengthsR&D centers for mobile communication in Beijing and Shanghai with more than 50

42、0 engineers planned Lead international forum in TD-SCDMA Frequent introduction of new models Continuously increase local production capacity and capability Intensive marketing on new models with competitive pricing Healthy sales through exclusive channel partner PTACCapable after-sales service with

43、100 service stations nationwideLevers for improvement Lacks capability in W-CDMA and CDMA 2000Fully dependent on single national distributor Source: World computer journal, McKinsey analysis19SAMSUNG010605BJ-kickoff2SIEMENS VALUE DELIVERY SYSTEM IS ORGANIZED AROUND PRODUCT LINES WITH MULTIPLE CUSTOM

44、ER INTERFACESValue delivery systemCustomer interfacesIC Mobile and IC Network communicate with the same telecom operators separately, with “multiple faces”010726BJESM003CSAVv5.i14Washing machineRefrigerator/freezerMobile handsetMobile networkSwitchingTransmissionR&DManufacturingMarketing and brandin

45、gSales and distributionServiceBSWH JiangsuBSYC AnhuiGermanyGermanyGermanyGermanySiemens GuangdongBeijing International Switching System CorporationSiemens ShanghaiSiemens ShanghaiSiemens ChinaBSWH JiangsuBSYC AnhuiRetailerPTACSource: McKinsey analysis20SAMSUNG010605BJ-kickoff2SIEMENS DISTRIBUTES THR

46、OUGH EXCLUSIVE NATIONAL RESELLER PTACSource: IDCRationalesSiemens partners with PTAC, taking advantage of their streamlined and efficient distribution channels. PTAC is selected as the exclusive national distributor due to resources and image.A uniform price level in the market is maintained nationw

47、ide to ensure healthy salesSiemens Channel StructureRely on both 1st-tier national reseller PTAC and 2nd-tier provincial resellersDevote much attention to low-tier city marketVendor1st-tier resellersConsumers2nd-tier resellersRetailers/retail chain stores12%9%79%67%12%67%12%21%21SAMSUNG010605BJ-kick

48、off2ORGANIZATION AND OWNERSHIP1. Background informationLocationRegistered capitalManagementteamEquitystructureStarting yearNumber of employeesEra analysis4. Value chain strategy5. Organization and ownership6. Financial performanceFocus on Marketing, advertising and promotion Distribution (channel an

49、d sales force)Organization structureOwnership structureSales Profit 2. Strategy 3. Product /marketMissionVisionCorporate strategyMarket positionKey product offeringsKey customersValue propositionGeographic focusPricing22SAMSUNG010605BJ-kickoff2With a large product portfolio covering information and

50、communication and home appliances etc. Siemenss organization is product focused with clear lines of P&L responsibilitiesSiemens has over 50 JVs and WOFEs in China with large commitments in telecommunication. Siemens Shanghai is devoted to mobile communication including mobile handsetsSiemenss joint

51、ventures are managed under their own global BU, and Siemens China, the holding company, coordinates and provides shared services for the global BU activities in ChinaSiemens is starting to centralize sales and marketing to better handle solution sales, and the goal is to consolidate all marketing an

52、d sales functions under Siemens directlyKEY MESSAGES - ORGANIZATION AND OWNERSHIP23SAMSUNG010605BJ-kickoff2010726BJESM003CSAVv5.i13Siemens International BSH Bosch and Siemens household appliances Information and communication networkConsumer electronics(BSWH Jiangsu, BSYCAnhui) R&D Manufactur-ing Sa

53、les and marketing Siemens China Information and communication network (BJ Intl Switching Corp, Siemens Guangdong)Information and communication mobile (Siemens Shanghai) Marketing HR Finance Legal R&D Manufactur-ing Sales and marketing R&D Manufactur-ing Sales and marketing Washing machine refrigerat

54、or freezer Switching system transmission system Mobile infrastructure mobile handset GermanyChinaInformation and communication mobileOther divisionsWITH A LARGE PRODUCT PORTFOLIO, SIEMENS TENDS TO BE MORE PRODUCT FOCUSED WITH CLEAR LINES OF P&L RESPONSIBILITYOrganization structureP&L responsibility

55、ICM manager for information and communication mobile ICN manager for information and communication networkDriving factorsIn order to meet the trend of technological merging in Information and Communication field, the new Siemens business group - Information and Communication mobile (ICM) started its

56、 operation in April 1, 2000. ICM handles the entire mobile telephone business, with regard to both communications terminals (mobile and wired phones, mobile organizers and digital products) and mobile phone networks (products and services for mobile communication and intelligent networks). Source: S

57、iemens press release, McKinsey analysis24SAMSUNG010605BJ-kickoff2SIEMENS HAS OVER 50 JVs OR WOFEs IN CHINA, AMONG WHICH SIEMENS SHANGHAI IS DEVOTED TO MOBILE HANDSETSSiemens ChinaBeijing international switching systems BISCSiemens transmission systems Guangzhou(STSG)Xin De telecom international vent

58、ures (TIV)Siemens ShanghaiMobile communicating (SSMC)Shanghai Siemens business communication system(SBCS)Main driversTo be close to customersTo be in line with government policiesTo become Chinese company for Chinese people40%With Guangzhou Nanfang photoelectrical telecommunication60%Beijing wire co

59、mmunication.Beijing telephone authoritiesBeijing comprehensive investmentShanghai Aijian,Shanghai XinguangWith Shanghai video and Audio Electronics, ShanghaiPost and telecommunication 51%Establishyear Product offering1990EWSDswitching1993-1994Transmission systems(PDH, SDH,DWDM)1994Finance leasingand

60、 consultingHicom 300 switching systemGSM mobile networks and mobile handsetsMPTs First Research Institute19931993Not ExhaustiveSource: Siemens press release25SAMSUNG010605BJ-kickoff2SIEMENS HAS MADE LARGE COMMITMENTS IN TELECOMMUNICATION IN CHINAJV companyYear of contractPlanned investment (mDM)Siem