In Automotive World, Business planning
and Product life cycle are the most complex phenomena. Dealt with two
important things can make any company, world leader and successful in
their segment. ACG developed a tool to combine Business planning and
Product life cycle together. This also helps to check the business case
of even Electric and Hybrid vehicles by applying ACG concept.
Every segment like Truck, Bus, Passenger vehicle, Two & Three Wheeler, Construction equipment and Agriculture equipment are having specific parameter depending on various factors. In general, life cycle can be defined in four phases as in stages, namely Introduction, Growth, Maturity and Decline. During business phase some companies face financial crunch due to wrong planning. Even in some biggest global automotive merger, we had witnessed some serious issues and consequences due to failure in combining business planning and product life cycle.
As
ACG was doing such specific research, effective division of product
phases from 4 to 10 stages were implied, depending upon the Segment,
Country, Technology, Customer segment, Target segment, Product position,
Buying behavior, Competitor landscape, Network, Brand perception,
Application, model and Business model. Even in the same segment and
model it could be different if the applications are different. Only
after having in-depth, detailed research, we could draw the blueprint.
The
optimal Business Model should be based for Business planning and
product life cycle. At times it has been noticed that different teams
work on all the three different issues, but often fails to put the facts
together. Even the same has been experienced with top Automotive Blue
chip companies both in OE and supplier side.
This
is not a ‘one-time exercise’, but depends mostly on market dynamics and
company strategy. There should be dynamic updates and revision of the
strategies with precision. Some of the OEMs is having a long term goal,
but initially looks to gain some market share and then product
penetration.
Product portfolio plays a
major role in Business planning. Without identifying the optimal
product portfolio, it is very difficult to make Business planning. Based
on this, companies can make budget, Promotion, Branding etc. Without
product portfolio, Business case will give negative results. Once you
have done proper homework on Business model and Business planning then
you have to establish connection with the product life cycle.
Most
of the times we have witnessed the time gap between the phase out and
successor of a product. This eventually results in the nearest
competitor eating up the segment share.
In
full report of ACG it has explained how many OEMs went through this
phase and made losses in India, Other Asian countries and Europe. Now
the million dollar question is how to avoid this situation and what
steps are to be taken and at what time to not only keep their market
share but also increase it. ACG study has released its latest study,
which can save lots of money and time of manufacturing units of parts
and OE. There should be rational to each phase; also how many products
should presence with time span and how to move it from one zone to
another zone.
When you decide to keep
vehicle, consider all important parameters to make it successful.
Parameters depends on nature of segment, whether it is Supplier or OE.
Some of the common parameters could be Technology, Competitors, Buying
behavior, transportation system, Cost, ROI etc.
Profit,
Loss and Break Even Points are one of the important criteria for any
business. It is very important to calculate and make strategy to have
Break even at min time and make more profit.
OE challenges related to Product and Business planning
Challenges for Business planning:
Conclusion:
Proper understanding of the market and accurate analysis of the
dynamics could make any Automotive OE and Supplier successful. But
please not that Product life cycle is different from Product life.
To Purchase Full Report
Contact - sales@autobei.com
Source: Autobei
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