Real Estate Bust a Web Boost?
Slowing housing market could drive smart shoppers to the internet.
August 24, 2006
Will a U.S. real estate bust spark a boom for web-based discount real estate companies? Web companies are already talking up their chances after the National Assocation of Realtors Wednesday reported that existing home sales fell 11.2 percent in July from the same period a year earlier
“We think as the market goes on to become a buyer’s market, we have a huge advantage over anyone else as 80 percent of our business comes from buyers,” said Pat Lashinsky, senior vice president of new product development at online real homebuying service ZipRealty.
The stakes are high. The real estate market powered the economy through the tech bust. Perhaps as a result the internet has scarcely changed the way the vast majority of homes are bought and sold— even as the music, advertising, and software industries have been dramatically altered.
Now that the technology business is rebounding, though, real estate is starting to stumble. That could give online real estate companies a chance to disrupt the home buying market and break into the mainstream.
“Sellers never really migrated to the Internet, but now as they are disadvantaged they will use the Internet in ways that never happened before,” said Brad Inman, founder and publisher of real-estate news service Inman News.
This is about real estate market, however the tendency is the same: when the material handling industry growth slows down, with its very commoditylike products , the business will go 'airborne' (online) - service request-responce, project management, delivery, EVERYTHING. In this case only the companies that adjusted to the web based operations - will survive. Web based operations - doesn't mean that nead for the service techies goes away. What it means - is that having a techies waiting or sales cold colling is the least efficient.
lift truck industry analysis
Thursday, August 24, 2006
Monday, August 21, 2006
Case: part 7, Industry Analysis - Threat of Entry
2.2.2 Threat of entry: (Low-WE; Strong-LT)
The Number and size of potential entrants depends in large part on the size and nature of barriers to entry. The analysis of barriers to entry is important in projecting competitive intensity and profitability levels in the future. Existing differences in the WE and LT markets result in different entry threat levels. The maximum threat of entry appears in the LT segment, while the WE segment is able to maintain the threat at a minimum level that limits potential entrants.
The export and import of equipment within US and Canada market is regulated by the NAFTA agreement, which allows free movement of products between both countries. Imports from outside of the US and Canada are under the supervision of the US Department of Commerce, which ensures that fair competition is taking place. On January 26, 2006, the commission removed all import restrictions. The removal of the import restrictions will most likely lead to increased imports to the US and Canada from Japan and other countries in the South Pacific area, and therefore raise the general threat of entry from those countries.
WE segment: The removal of import restriction will affect the WE segment less, as most WE equipment is manufactured in high labour cost areas such as Europe and North America.
LT segment: The market is likely be affected by the removal of import restrictions, as most LT products enter the US from Japan, China, Korea and other countries in the East and Southeast Asia . With the globalization process, this threat will greatly increase.
2.2.2.1 Brand:
AY: see a picture authorBrand is important for both industry segments.
WE segment: The WE market in US and Canada is represented by a few companies, with Crown Equipment and Johnston Equipment sharing approximately 80 per cent of the entire market. Crown Equipment is represented in BC by ATRAC, and the equipment manufacturer Raymond Equipment is represented by Johnston Equipment. These two leading brands have such a close brand identity in the WE segment that in most cases when the user faces the decision of what warehousing equipment to purchase, the answer is almost by default Crown or Raymond. Due to their sheer market presence, these two brands are strong enough to discourage potential entrants.
LT segment: The wide presence of many manufacturing brands in the LT segment and the fact that most of this equipment is cross-manufactured creates “white noise” brand perception; thus the brand factor in LT will not stop potential entrants.
2.2.2.2 Product complexity & simplicity:
WE segment: The WE segment, with its complex product applications and greater product modifications, necessitates a more careful matching of the equipment with existing storage configurations. Existing differences between pallet sizes, which are detrimental for equipment selection, and different measurement systems in America and the rest of the world, brings some scepticism towards import of new brands into the highly specialized WE segment.
LT segment: The products in general use in the LT equipment market segment are simpler than those in the WE segment; thus there is less need for complex product configurations. Equipment in this market segment can easily handle all pallet sizes. The difference in measurement systems does not affect the equipment user. The user can locate the equipment anywhere in the world and bring it to the local market without concern for compatibility. In these regards, significant price advantages for the imports from low labour cost countries will encourage potential entrants to this market. The industry doesn’t have proprietary technologies that could discourage the entrants, and thus, with the globalization process, the threat of entry is likely to increase.
2.2.2.3 Economies of scale
Economies of scale for equipment distributors entail selling enough equipment. The Minimum Efficiency Scale (MES) for equipment vendors varies greatly depending on size and structure of the local markets, as well as the size and amount of services provided by a particular equipment dealer.
WE segment: There are no industry statistics on minimum efficiency level, but it is safe to say that MES for an average equipment dealer in the WE segment is approximately 150 “average” units of equipment sold annually. Even though different brands within the WE segment might have different minimum efficiency scales, the difference most likely is insignificant. Volume discounts from a supplier generally vary by only a few percent, and are unlikely to drastically change efficiency scales. It is unlikely that new entrants without previous market presence will have significant sales in the first few years; thus WE’s MES will repel new potential equipment dealers from entering the BC market, as it requires significant time investments.
LT segment: The LT market segment has less complex products and basic service requirements. The MES is much lower than the MES in the WE segment. Some dealers can survive in this market by selling only half of what is needed in WE. Due to the commoditized nature of the LT market, new entrants, even without nay previous market presence, will not find it difficult to sell equipment even in the first years.
The threat of entry, especially in LT, is likely to increase because of the existing distribution system in the LT segment that allows dealers to sell multiple brands within one dealership, which is a common situation. Existing equipment vendors that have in place service capabilities and infrastructure, could easily add new product brands, especially those that are imported from low cost labour countries. In these regards, for entrants into the LT market, MES is less relevant. As there is no need for MES, the possibility for market entry increases, as the uncertainty period related to a new product’s adoption is less than that in WE. The current distribution model (Figure 7) decreases the need for capital investment by the entrants, and thus market entry becomes easier. The existing distribution systems do not “burden” existing dealers, either, as the dealers can sell the new products incrementally, and therefore the need for a long period of time to build up sufficient sales level becomes less obvious.
Figure 7 Market Entry Using Current Distribution Channels
2.2.2.4 Access to client
WE segment: Access to the client is very important due to the complexity of equipment and the greater need for product customization.
LT segment: In the general-use LT equipment market segment, the need for direct and constant access is less obvious; therefore, the potential entrant will not be discouraged by lack of previous contact with the client. The most common ways to reach the client in the general LT segment are through e-commerce, web sites and direct advertising in newspapers or Yellow Pages.
2.2.2.5 Summary of threat of entry:
The recent revocation of import anti-dumping orders that affect the LT market most and the lower importance of brands, along with the absence of MES and the lower need for capital and time requirements, bring the threat of entry in the LT segment to a high level. The WE segment is able to keep threat of entry at a low level due to product complexity and the need to have constant access and a relationship with a client. In addition, the wide dominance of two biggest players’ brands in the WE segment further discourages potential entrants to the WE market segment.
to be continued
business case industry analysis material handling forklift porter five forces
Case: part 7, Industry Analysis - Buyer's power
2.2 Porter’s 5-forces analysis:
The industry analysis is best described by using Porter’s 5-forces analysis. Porter’s concept describes five forces that determine the attractiveness of a market. According to Porter, five forces create a microenvironment within the company that affects its ability to serve its customers and make a profit. Since the industry consists of two major segments, warehousing equipment and general purpose lift trucks, Porter’s analysis will be performed for both industry segments to show any potential differences and similarities. Differences in the five forces between two market segments normally require a company to re-assess the marketplace.
The summary of market forces is indicated in Figure 5. The WE segment is characterized by high intensity buyer’s power, with the rest of the forces being at a low level. The other industry segment, LT, has a high level of all market forces.
Figure 5: Summary of Market Forces within Industry Segments.
2.2.1 Bargaining power of buyers: (Strong)
The bargaining power of buyers refers to the ability of buyers to influence the setting of prices, the terms of transactions and the nature of business relationships. Powerful buyers can make an industry less attractive by extracting price concessions for products and services that reduce industry profitability. In the material handling equipment industry, the power of buyers is strong, especially in the LT segment.
2.2.1.1 Buyers’ profile and decision making process
The typical user in both segments of the industry is a business account. Generally, companies employ professional buyers to select and obtain the equipment. A typical purchasing process in the industry includes several decision makers. Professionals that select the equipment and make a purchase have skills and qualifications that allow them to do so while maintaining maximum benefit to the company that makes the purchase. There is less emotional context involved in the process of selecting the equipment. The latest trend toward vendor rationalization is expected to continue as companies seek additional efficiencies in their supply relationships and buying processes. The buyer uses a variety of financial tools and criteria such as ROI and IRR to evaluate the purchase. In general, the typical customer in the material handling industry is very price sensitive, and price becomes one of the crucial factors in evaluating the supplier.
The most attractive industry segment is huge national and multinational accounts. Usually approximately 80 percent of the total equipment available on the market is purchased by huge multinational accounts, such as Wal-Mart, Coca-Cola, Costco, General Motors, and Ford. These accounts not only have extremely skilled professionals who obtain the equipment, but also enjoy economies of scale in purchase that allow them to obtain huge discounts while buying in volume. In some cases these large purchases are followed by long-term contracts that specify additional long-term benefits for the buyers. While material handling equipment distributors and dealers constitute a popular, if not a preferred, buying channel, such customers aren't necessarily committed to buying only from local distributors. Thus, price becomes increasingly important in the process of selecting the equipment vendor.
The two different equipment market segments contain some differences in regards to the buyer’s power.
Warehousing Equipment (WE) segment: The typical customer in the WE market is a distribution centre or a warehouse. Such accounts require higher degree of physical configuration and even customization of the products; thus, besides price, quality and reliability become important. The reliability is very closely associated with manufacturer’s brand, and consequently brand becomes the second biggest factor in the decision-making process. The ability of the dealer to provide expertise while selecting the equipment is another important factor. In general, in the WE market, brand and dealer’s reputation (based on the knowledge and experience level of dealer’s personnel, and the dealer’s ability to perform complex tasks such as project assistance and product customizations) are next in importance to price in the customer’s decision-making process.
Equipment in WE is not perceived as a commodity. There are significant differences in the operational and technical side, as well as in the functionality. These differences in design lead to the point where the user faces significant costs if switching away from his current supplier. The ability of the equipment vendor to provide appropriate service for a long period of time becomes the next important factor in the purchasing decision. In some cases, at a customer’s request, the dealer needs to provide a packaged offering that covers equipment and storage systems. Such packages usually cover installation of the entire warehouse system with relevant equipment included.
In summary, several factors are considered by a customer while selecting the equipment vendor in the WE segment. These are, in order of importance, price, equipment brand, the reputation of the equipment vendor and his ability to provide service, and project management.
Lift Truck (LT) segment: The LT segment is affected by different market forces. Due to simpler applications and product designs, equipment in LT market tends to be perceived as a commodity. Even though there are some smaller subgroups within LT segment, such as heavy-duty lift trucks in the lumber business, in general, most of the equipment is still perceived as a commodity. The group of equipment manufacturers serving the LT segment is larger than that in WE The equipment itself and the process of selecting equipment in LT is much simpler than in WE. LT equipment purchases usually do not require complex coordination with other products, such as storage systems. Customization of LT equipment is very limited compared to that in WE. The existing small differences in design allow users to change their current equipment brand and equipment vendor without involving a significant switching cost. This product and market homogeneity leads to the point where the most important criterion in the decision to buy a particular piece of equipment is price.
Even though the LT market tends to be a commodity market, there is a minimum level of quality and reliability of the equipment that is acceptable to the user. Very low-quality products cannot be sold, despite having a low price. The quality of the products is usually associated with the brand; thus the brand becomes the second important factor in the buyer’s decision. However, the wide range of equipment manufacturers with similar quality and reliability characteristics in LT makes this factor of lesser importance to users than is true in the WE segment. The low service switching cost and the wide availability of equipment dealers in the LT segment make other factors less important.
In summary, in the LT market, the most important factor in a buyer’s decision is price. Brand is of significantly lower importance than price; it is even less important as a factor than in the WE segment. Other factors, such as a dealer’s reputation and service, are of low importance.
The buyer’s priorities and their comparative importance are given in Figure 6.
Figure 6 Buyer’s Decision Making Factors and Their Relative Importance Scale
2.2.1.2 The globalization process and power shift:
The material handling industry is a mature industry. In mature industries, buyers usually have a high level of product knowledge that gives them extra bargaining power.
WE segment: In the WE segment of the industry, the buyer’s knowledge is greatly reduced. Material handling equipment is a part of a global supply chain industry. The supply chain reflects general economy changes. Markets in developed countries, such as North America and Europe have a tendency towards building more specialized warehouses, utilizing less floor space and providing more storage space, and significantly increasing speed and functionality. The trend towards building more specialized high performance facilities places more emphasis on the WE as opposed to the LT segment. The WE segment becomes more specialized and therefore more fragmented. The fragmentation of the WE segment greatly reduces the level of the typical buyer’s knowledge base and therefore shifts the bargaining power towards the equipment vendor. To reduce product uncertainty, the buyer tends to count more on the seller and his expertise; thus the need for support tends to necessitate the need for a relationship.
LT segment: Globalization trends affect the less technical side of commodity-type equipment in the LT segment; the buyer has less incentive for maintaining a relationship and instead concentrates more on the lowest price. In the latter case, the globalization process will greatly increase the threat of entry, since the buyer can shop around the globe for the best deal.
In the US, the clientele base for LT equipment has decreased as new industry trends put more emphasis on building more specialized warehouses that are served by WE equipment market. The declining customer base in LT brings extra bargaining power to the remaining customers.
In summary, the global economy and globalization processes change the bargaining power of buyers in the industry, affecting the LT segment and easing competition in WE.
2.2.1.3 Long product life cycles and relationship management:
The equipment is purchased on a regular basis. An average product life cycle in the industry is in the 5- to 15-year range. Within this period the equipment is serviced by the equipment vendor. During that time, the equipment vendor usually provides customer and service support to the equipment user. Customer support usually involves a wide range of activities: dealing with complaints, gathering a customer’s preferences for the next purchase, consulting, and providing technical expertise. As the equipment is purchased on a repeated basis, relationships become important, especially when the time comes to make another sale. Such relationships need to include several decision making layers; customer relationship management becomes very complex and more important.
WE segment: In the WE market with its different and complex products, the need to maintain and even develop a new level of relationships becomes essential for business.
LT segment: In the LT equipment market with its commodity-like products and significant price pressure, the need to maintain relationships with the client becomes less and less obvious, since the relationships comes for a price. The equipment cross-servicing also reduces the need for a relationship with the buyer.
In general, while the customer relationship becomes one of the crucial factors in dealing with the buyers in WE, the specificity of the LT market makes the need for such relationships less obvious.
2.2.1.4 Summary of buyer’s power:
The buyer’s bargaining power in the material equipment industry is very high, with a tendency to become even higher in the LT segment. Factors that affect a buyer’s decision are different for both industry segments.
WE segment: In the WE segment, the most important factors are price, product brand, the dealer’s reputation, the ability of the equipment vendor to provide adequate service, and the customer relationship. The importance of these factors, especially the customer relationship, becomes more important as the customer’s knowledge base is quite limited.
LT segment: In LT segment, the most important factor is the price, followed by brand; other factors are relatively low in importance.
to be continued
business case industry analysis material handling forklift
porter five forces
The industry analysis is best described by using Porter’s 5-forces analysis. Porter’s concept describes five forces that determine the attractiveness of a market. According to Porter, five forces create a microenvironment within the company that affects its ability to serve its customers and make a profit. Since the industry consists of two major segments, warehousing equipment and general purpose lift trucks, Porter’s analysis will be performed for both industry segments to show any potential differences and similarities. Differences in the five forces between two market segments normally require a company to re-assess the marketplace.
The summary of market forces is indicated in Figure 5. The WE segment is characterized by high intensity buyer’s power, with the rest of the forces being at a low level. The other industry segment, LT, has a high level of all market forces.
Figure 5: Summary of Market Forces within Industry Segments.
2.2.1 Bargaining power of buyers: (Strong)
The bargaining power of buyers refers to the ability of buyers to influence the setting of prices, the terms of transactions and the nature of business relationships. Powerful buyers can make an industry less attractive by extracting price concessions for products and services that reduce industry profitability. In the material handling equipment industry, the power of buyers is strong, especially in the LT segment.
2.2.1.1 Buyers’ profile and decision making process
The typical user in both segments of the industry is a business account. Generally, companies employ professional buyers to select and obtain the equipment. A typical purchasing process in the industry includes several decision makers. Professionals that select the equipment and make a purchase have skills and qualifications that allow them to do so while maintaining maximum benefit to the company that makes the purchase. There is less emotional context involved in the process of selecting the equipment. The latest trend toward vendor rationalization is expected to continue as companies seek additional efficiencies in their supply relationships and buying processes. The buyer uses a variety of financial tools and criteria such as ROI and IRR to evaluate the purchase. In general, the typical customer in the material handling industry is very price sensitive, and price becomes one of the crucial factors in evaluating the supplier.
The most attractive industry segment is huge national and multinational accounts. Usually approximately 80 percent of the total equipment available on the market is purchased by huge multinational accounts, such as Wal-Mart, Coca-Cola, Costco, General Motors, and Ford. These accounts not only have extremely skilled professionals who obtain the equipment, but also enjoy economies of scale in purchase that allow them to obtain huge discounts while buying in volume. In some cases these large purchases are followed by long-term contracts that specify additional long-term benefits for the buyers. While material handling equipment distributors and dealers constitute a popular, if not a preferred, buying channel, such customers aren't necessarily committed to buying only from local distributors. Thus, price becomes increasingly important in the process of selecting the equipment vendor.
The two different equipment market segments contain some differences in regards to the buyer’s power.
Warehousing Equipment (WE) segment: The typical customer in the WE market is a distribution centre or a warehouse. Such accounts require higher degree of physical configuration and even customization of the products; thus, besides price, quality and reliability become important. The reliability is very closely associated with manufacturer’s brand, and consequently brand becomes the second biggest factor in the decision-making process. The ability of the dealer to provide expertise while selecting the equipment is another important factor. In general, in the WE market, brand and dealer’s reputation (based on the knowledge and experience level of dealer’s personnel, and the dealer’s ability to perform complex tasks such as project assistance and product customizations) are next in importance to price in the customer’s decision-making process.
Equipment in WE is not perceived as a commodity. There are significant differences in the operational and technical side, as well as in the functionality. These differences in design lead to the point where the user faces significant costs if switching away from his current supplier. The ability of the equipment vendor to provide appropriate service for a long period of time becomes the next important factor in the purchasing decision. In some cases, at a customer’s request, the dealer needs to provide a packaged offering that covers equipment and storage systems. Such packages usually cover installation of the entire warehouse system with relevant equipment included.
In summary, several factors are considered by a customer while selecting the equipment vendor in the WE segment. These are, in order of importance, price, equipment brand, the reputation of the equipment vendor and his ability to provide service, and project management.
Lift Truck (LT) segment: The LT segment is affected by different market forces. Due to simpler applications and product designs, equipment in LT market tends to be perceived as a commodity. Even though there are some smaller subgroups within LT segment, such as heavy-duty lift trucks in the lumber business, in general, most of the equipment is still perceived as a commodity. The group of equipment manufacturers serving the LT segment is larger than that in WE The equipment itself and the process of selecting equipment in LT is much simpler than in WE. LT equipment purchases usually do not require complex coordination with other products, such as storage systems. Customization of LT equipment is very limited compared to that in WE. The existing small differences in design allow users to change their current equipment brand and equipment vendor without involving a significant switching cost. This product and market homogeneity leads to the point where the most important criterion in the decision to buy a particular piece of equipment is price.
Even though the LT market tends to be a commodity market, there is a minimum level of quality and reliability of the equipment that is acceptable to the user. Very low-quality products cannot be sold, despite having a low price. The quality of the products is usually associated with the brand; thus the brand becomes the second important factor in the buyer’s decision. However, the wide range of equipment manufacturers with similar quality and reliability characteristics in LT makes this factor of lesser importance to users than is true in the WE segment. The low service switching cost and the wide availability of equipment dealers in the LT segment make other factors less important.
In summary, in the LT market, the most important factor in a buyer’s decision is price. Brand is of significantly lower importance than price; it is even less important as a factor than in the WE segment. Other factors, such as a dealer’s reputation and service, are of low importance.
The buyer’s priorities and their comparative importance are given in Figure 6.
Figure 6 Buyer’s Decision Making Factors and Their Relative Importance Scale
2.2.1.2 The globalization process and power shift:
The material handling industry is a mature industry. In mature industries, buyers usually have a high level of product knowledge that gives them extra bargaining power.
WE segment: In the WE segment of the industry, the buyer’s knowledge is greatly reduced. Material handling equipment is a part of a global supply chain industry. The supply chain reflects general economy changes. Markets in developed countries, such as North America and Europe have a tendency towards building more specialized warehouses, utilizing less floor space and providing more storage space, and significantly increasing speed and functionality. The trend towards building more specialized high performance facilities places more emphasis on the WE as opposed to the LT segment. The WE segment becomes more specialized and therefore more fragmented. The fragmentation of the WE segment greatly reduces the level of the typical buyer’s knowledge base and therefore shifts the bargaining power towards the equipment vendor. To reduce product uncertainty, the buyer tends to count more on the seller and his expertise; thus the need for support tends to necessitate the need for a relationship.
LT segment: Globalization trends affect the less technical side of commodity-type equipment in the LT segment; the buyer has less incentive for maintaining a relationship and instead concentrates more on the lowest price. In the latter case, the globalization process will greatly increase the threat of entry, since the buyer can shop around the globe for the best deal.
In the US, the clientele base for LT equipment has decreased as new industry trends put more emphasis on building more specialized warehouses that are served by WE equipment market. The declining customer base in LT brings extra bargaining power to the remaining customers.
In summary, the global economy and globalization processes change the bargaining power of buyers in the industry, affecting the LT segment and easing competition in WE.
2.2.1.3 Long product life cycles and relationship management:
The equipment is purchased on a regular basis. An average product life cycle in the industry is in the 5- to 15-year range. Within this period the equipment is serviced by the equipment vendor. During that time, the equipment vendor usually provides customer and service support to the equipment user. Customer support usually involves a wide range of activities: dealing with complaints, gathering a customer’s preferences for the next purchase, consulting, and providing technical expertise. As the equipment is purchased on a repeated basis, relationships become important, especially when the time comes to make another sale. Such relationships need to include several decision making layers; customer relationship management becomes very complex and more important.
WE segment: In the WE market with its different and complex products, the need to maintain and even develop a new level of relationships becomes essential for business.
LT segment: In the LT equipment market with its commodity-like products and significant price pressure, the need to maintain relationships with the client becomes less and less obvious, since the relationships comes for a price. The equipment cross-servicing also reduces the need for a relationship with the buyer.
In general, while the customer relationship becomes one of the crucial factors in dealing with the buyers in WE, the specificity of the LT market makes the need for such relationships less obvious.
2.2.1.4 Summary of buyer’s power:
The buyer’s bargaining power in the material equipment industry is very high, with a tendency to become even higher in the LT segment. Factors that affect a buyer’s decision are different for both industry segments.
WE segment: In the WE segment, the most important factors are price, product brand, the dealer’s reputation, the ability of the equipment vendor to provide adequate service, and the customer relationship. The importance of these factors, especially the customer relationship, becomes more important as the customer’s knowledge base is quite limited.
LT segment: In LT segment, the most important factor is the price, followed by brand; other factors are relatively low in importance.
to be continued
business case industry analysis material handling forklift
porter five forces
Case: part 6, Industry Analysis - Porter's five forces
2 INDUSTRY ANALYSIS
Two major segments in the industry will be discussed later in the analysis. The analytical section will focus on applying Porter’s five forces and industry value chain analysis. Both analyses will help to identify key successful factors so as to determine alternatives that will produce a competitive advantage. Further, the findings will be analysed in terms of the company’s internal capabilities, including management preferences.
2.1 Product segments
The Industrial Truck Association (ITA) defines five classes of lift trucks – Class 1: electric counterbalanced equipment; Class 2: electric high lift; Class 3: electric low lift; Class 4: internal combustion cushion tire; Class 5: internal combustion pneumatic tire. Classes 1, 2 and 3 are usually described as the warehousing equipment ; Classes 4, 5 (and part of Class 1) compose the general use lift truck (LT) market segment. Even though some degree of overlapping between classes exists, two segments of the industry usually serve different customer bases. Class 1 Lift trucks can be used in both the WE and LT segments.
Warehousing Equipment (WE) segment: The warehousing equipment segment is designed for applications that require storage of the product inside warehouses and require storage systems (racks and shelves) for storing the palletized product. Examples of such applications are packaged goods distribution centres, such as Superstore, Versa Cold, Kalotire, Canadian Tire, Costco, Wal-Mart, and Safeway. Such accounts usually run high density warehouses with a high product turnover. The product offering to those users usually requires complex and carefully selected equipment. A key element in the sales of complicated warehouse equipment is the physical configuration of the customer’s equipment to match the customer’s particular storage systems layout.
The user usually receives the equipment within three or four months after placing the order, as the equipment can be manufactured only after all details of the specification are clarified.
Lift Truck (LT) segment: LT segment serves more general and less complex working applications with lower density warehouses that do not require complex storage systems for storing the product. Typical applications for LT products are loading and unloading trucks. The users are usually manufacturers, lumber companies, ports, beverage distributors, and similar operations. Product variations for those customers are less than those for warehousing equipment. In most cases, vendors have a certain amount of equipment in stock. Usually, the different classes of equipment within the LT market compete for one customer, which is an example of cross competition.
Two industry segments with indication of equipment classes within each segment are presented in Figure 4.
Figure 4 Market Segments and Equipment Classes(WE) market segment
to be continued
The industry market segments, WE and LT, are almost equal in size and dollar value.
business case industry analysis material handling
forklift
porter five forces
Two major segments in the industry will be discussed later in the analysis. The analytical section will focus on applying Porter’s five forces and industry value chain analysis. Both analyses will help to identify key successful factors so as to determine alternatives that will produce a competitive advantage. Further, the findings will be analysed in terms of the company’s internal capabilities, including management preferences.
2.1 Product segments
The Industrial Truck Association (ITA) defines five classes of lift trucks – Class 1: electric counterbalanced equipment; Class 2: electric high lift; Class 3: electric low lift; Class 4: internal combustion cushion tire; Class 5: internal combustion pneumatic tire. Classes 1, 2 and 3 are usually described as the warehousing equipment ; Classes 4, 5 (and part of Class 1) compose the general use lift truck (LT) market segment. Even though some degree of overlapping between classes exists, two segments of the industry usually serve different customer bases. Class 1 Lift trucks can be used in both the WE and LT segments.
Warehousing Equipment (WE) segment: The warehousing equipment segment is designed for applications that require storage of the product inside warehouses and require storage systems (racks and shelves) for storing the palletized product. Examples of such applications are packaged goods distribution centres, such as Superstore, Versa Cold, Kalotire, Canadian Tire, Costco, Wal-Mart, and Safeway. Such accounts usually run high density warehouses with a high product turnover. The product offering to those users usually requires complex and carefully selected equipment. A key element in the sales of complicated warehouse equipment is the physical configuration of the customer’s equipment to match the customer’s particular storage systems layout.
The user usually receives the equipment within three or four months after placing the order, as the equipment can be manufactured only after all details of the specification are clarified.
Lift Truck (LT) segment: LT segment serves more general and less complex working applications with lower density warehouses that do not require complex storage systems for storing the product. Typical applications for LT products are loading and unloading trucks. The users are usually manufacturers, lumber companies, ports, beverage distributors, and similar operations. Product variations for those customers are less than those for warehousing equipment. In most cases, vendors have a certain amount of equipment in stock. Usually, the different classes of equipment within the LT market compete for one customer, which is an example of cross competition.
Two industry segments with indication of equipment classes within each segment are presented in Figure 4.
Figure 4 Market Segments and Equipment Classes(WE) market segment
to be continued
The industry market segments, WE and LT, are almost equal in size and dollar value.
business case industry analysis material handling
forklift
porter five forces
Case: part 5, Decision Criteria
1.3 Decision criteria
The decision criteria are the criteria that the senior management decision-makers use to evaluate whether a strategic change is satisfactory and should be implemented. Market forces and industry value chain analysis will identify the key successful factors the company needs to concentrate on, and will enable the company to maintain and further strengthen its competitive advantage.
to be continued
business case industry analysis material handling
The decision criteria are the criteria that the senior management decision-makers use to evaluate whether a strategic change is satisfactory and should be implemented. Market forces and industry value chain analysis will identify the key successful factors the company needs to concentrate on, and will enable the company to maintain and further strengthen its competitive advantage.
to be continued
business case industry analysis material handling
Case: part 4, Industry profile
1.2 Material handling equipment Industry:
1.2.1 Industry overview:
The Material Handling Equipment includes lift trucks and inventory-handling systems such as conveyors, sorters, storage racks, shelving systems and carousels. The industry generates combined annual sales of $15 billion, about half due to lift truck sales. NACCO Industries, Toyota and Linde AG are the largest manufacturers worldwide. There are approximately twenty lift truck brands, with about 4,000 distribution outlets for material handling equipment in the US.
The lift truck industry in North America is a mature one. Aggregated figures of the equipment sold in America and Canada total around 180,000 – 190,000 units (Figure 2).
Figure 2: Total Orders of Material Handling Equipment
Source: J. Malvaso (Raymond Corp.), Material Handling Equipment Dealers Conference, 2005
Demand for material handling equipment (MHE) depends on the level of goods moving through the US economy from domestic production, imports, and sales. In general, demand for equipment reflects economy conditions. In a stagnant economy, the only demand for new MHE is to replace retired units.
In the last few years, the industry has gone though rapid growth following the general trend in the US economy. The one-percent industry growth in 2002 was followed by a 16-percent spike in 2004. However, predictions for 2006 and thereafter for aggregated sales in material handling industry indicate a steady industry decline, down to 4 percent growth in 2008 (Figure 3) due to the predicted cooling of US economy.
Figure 3: Predicted Industry Growth
Source: Interindustry Economic Research Fund, Inc. (IERF), College Park, MD, 2005
1.2.2 Industry definitions
A basic principle of material handling is the concept of unit loads. A unit load is a number of items arranged as one unit, to be moved or handled at one time. In effect, the unit load implies the container and the support platform or pallet. The main advantage of using unit loads is the ability to handle more items at one time.
The material handling equipment industry has different classes of equipment that serve different working applications. Only a few manufacturers produce an entire range of equipment “in-house”; the majority of manufacturers specialize in particular types or classes of equipment. The number of companies in the industry varies from class to class. Depending on geographic area, the market share for every manufacturer within certain classes of equipment varies greatly. Worldwide, in general, none of the competitors has a market share of more than 10 percent. Locally, however, the market presence of some brands can reach up to 50 per cent.
Major customers are manufacturing plants and inventory-handling facilities. A typical customer is a distribution centre that services 100 stores a day with 300,000 cases, 21,000 pallets, and 20,000 SKUs. The facility has a flow-through design, with receiving at one end and shipping at the other, and uses single and double-deep pallets and pushback racks, and forklifts to move material. Because the material handling equipment industry is diverse and fragmented, equipment prices vary greatly, depending on the size and complexity of the equipment. High-volume, lower-priced products are susceptible to competitive pricing, but more expensive equipment is less vulnerable to price pressures. A key element in the sales of complicated inventory or process systems is the physical configuration of the customer’s production floor or warehouse space. With construction and real estate costs increasing, customers have distributors help them design and build the best layout and material handling system to maximize use of a compact space.
1.2.3 The material handling equipment distributors (Dealers)
There are almost 4000 distribution outlets for Material Handling Equipment in the US . Distributors usually operate in either the lift truck segment or in the inventory systems segment, but not both. ATRAC seems to be one of the few companies in the industry that operate in both areas – inventory systems and lift truck distribution. Most distributors have just one or two distribution outlets.
Distributors are usually independent, but are often affiliated with a particular manufacturer. Some manufacturers own their own dealerships. Every dealer operates within an assigned territory and assumes all sales and service activities in that territory on behalf of the equipment manufacturers. To reduce uncertainty with future sales, some dealers carry several lift truck manufacturer’s brands; thus it is very common that one dealer sells several products that directly compete with each other.
In addition to selling new and used equipment, dealerships lease and rent equipment, either long- or short-term. Lift truck dealers operate much like traditional car dealers, providing sales, service, spare parts, and financing (often in cooperation with the manufacturer); taking trade-ins; and selling used trucks. A large base of existing trucks provides dealers with a big market for replacement parts, maintenance, and retrofitting. In most cases, the margins on service are better than those on original sales. A dealer’s territory is limited by its ability to provide service. Distributor sales and service personnel of complex material handling products and systems need more advanced training and skills than their peers who work with low-level products. The product lifetime for the industrial type of equipment is in the 5-15 years range. The revenue from the service part of a dealer’s business generally almost equals that from sales of new equipment. The service part of the dealer’s business requires extensive investments in labour resources and supporting infrastructure.
Profitability for distributors is determined by sales volume. Small distributors can compete by specializing in a specific industry or type of equipment, or by offering excellent service programs. Large distributors can negotiate favourable distribution agreements, based on volume. Average sales per employee vary greatly because of the wide variety in equipment, prices, and industries served.
Revenue and cash flow in the MHE industry are highly cyclical, sometimes changing sharply from year to year. The size and quality of receivables depend on the health of the end-use industries a particular distributor sells to.
to be continued
business case industry analysis material handling
1.2.1 Industry overview:
The Material Handling Equipment includes lift trucks and inventory-handling systems such as conveyors, sorters, storage racks, shelving systems and carousels. The industry generates combined annual sales of $15 billion, about half due to lift truck sales. NACCO Industries, Toyota and Linde AG are the largest manufacturers worldwide. There are approximately twenty lift truck brands, with about 4,000 distribution outlets for material handling equipment in the US.
The lift truck industry in North America is a mature one. Aggregated figures of the equipment sold in America and Canada total around 180,000 – 190,000 units (Figure 2).
Figure 2: Total Orders of Material Handling Equipment
Source: J. Malvaso (Raymond Corp.), Material Handling Equipment Dealers Conference, 2005
Demand for material handling equipment (MHE) depends on the level of goods moving through the US economy from domestic production, imports, and sales. In general, demand for equipment reflects economy conditions. In a stagnant economy, the only demand for new MHE is to replace retired units.
In the last few years, the industry has gone though rapid growth following the general trend in the US economy. The one-percent industry growth in 2002 was followed by a 16-percent spike in 2004. However, predictions for 2006 and thereafter for aggregated sales in material handling industry indicate a steady industry decline, down to 4 percent growth in 2008 (Figure 3) due to the predicted cooling of US economy.
Figure 3: Predicted Industry Growth
Source: Interindustry Economic Research Fund, Inc. (IERF), College Park, MD, 2005
1.2.2 Industry definitions
A basic principle of material handling is the concept of unit loads. A unit load is a number of items arranged as one unit, to be moved or handled at one time. In effect, the unit load implies the container and the support platform or pallet. The main advantage of using unit loads is the ability to handle more items at one time.
The material handling equipment industry has different classes of equipment that serve different working applications. Only a few manufacturers produce an entire range of equipment “in-house”; the majority of manufacturers specialize in particular types or classes of equipment. The number of companies in the industry varies from class to class. Depending on geographic area, the market share for every manufacturer within certain classes of equipment varies greatly. Worldwide, in general, none of the competitors has a market share of more than 10 percent. Locally, however, the market presence of some brands can reach up to 50 per cent.
Major customers are manufacturing plants and inventory-handling facilities. A typical customer is a distribution centre that services 100 stores a day with 300,000 cases, 21,000 pallets, and 20,000 SKUs. The facility has a flow-through design, with receiving at one end and shipping at the other, and uses single and double-deep pallets and pushback racks, and forklifts to move material. Because the material handling equipment industry is diverse and fragmented, equipment prices vary greatly, depending on the size and complexity of the equipment. High-volume, lower-priced products are susceptible to competitive pricing, but more expensive equipment is less vulnerable to price pressures. A key element in the sales of complicated inventory or process systems is the physical configuration of the customer’s production floor or warehouse space. With construction and real estate costs increasing, customers have distributors help them design and build the best layout and material handling system to maximize use of a compact space.
1.2.3 The material handling equipment distributors (Dealers)
There are almost 4000 distribution outlets for Material Handling Equipment in the US . Distributors usually operate in either the lift truck segment or in the inventory systems segment, but not both. ATRAC seems to be one of the few companies in the industry that operate in both areas – inventory systems and lift truck distribution. Most distributors have just one or two distribution outlets.
Distributors are usually independent, but are often affiliated with a particular manufacturer. Some manufacturers own their own dealerships. Every dealer operates within an assigned territory and assumes all sales and service activities in that territory on behalf of the equipment manufacturers. To reduce uncertainty with future sales, some dealers carry several lift truck manufacturer’s brands; thus it is very common that one dealer sells several products that directly compete with each other.
In addition to selling new and used equipment, dealerships lease and rent equipment, either long- or short-term. Lift truck dealers operate much like traditional car dealers, providing sales, service, spare parts, and financing (often in cooperation with the manufacturer); taking trade-ins; and selling used trucks. A large base of existing trucks provides dealers with a big market for replacement parts, maintenance, and retrofitting. In most cases, the margins on service are better than those on original sales. A dealer’s territory is limited by its ability to provide service. Distributor sales and service personnel of complex material handling products and systems need more advanced training and skills than their peers who work with low-level products. The product lifetime for the industrial type of equipment is in the 5-15 years range. The revenue from the service part of a dealer’s business generally almost equals that from sales of new equipment. The service part of the dealer’s business requires extensive investments in labour resources and supporting infrastructure.
Profitability for distributors is determined by sales volume. Small distributors can compete by specializing in a specific industry or type of equipment, or by offering excellent service programs. Large distributors can negotiate favourable distribution agreements, based on volume. Average sales per employee vary greatly because of the wide variety in equipment, prices, and industries served.
Revenue and cash flow in the MHE industry are highly cyclical, sometimes changing sharply from year to year. The size and quality of receivables depend on the health of the end-use industries a particular distributor sells to.
to be continued
business case industry analysis material handling
Thursday, August 17, 2006
Industry news: what will happen
Shanghai Automotive to buy Rover brand name: report
The famous Rover brand name, the former flagship of British car making, is to be sold to Chinese auto maker Shanghai Automotive Industry Corp. for just over £11-million ($23.3-million), the Financial Times reported yesterday. A spokesman for Bayerische Motoren Werke AG, which owns the rights to the Rover brand name, declined to comment on the report. “We are currently negotiating with a few interested parties, including SAIC, regarding the sale of the rights, but no agreement has yet been reached,” he said. SAIC has already acquired the design rights for a number of Rover cars for £67-million. BMW (Frankfurt) rose 39 euro cents to ¤39.60 ($56.90). AFP
The equipment business mirrors the automotive business to some extend. The look into an automotive market turbulences allows making a very close predictions regarding the equipment side.
And the prediction is that all the expensive equipment manufacturers will be sooner or later acquired by cheap labour cost manufacturers. This is possibly the reason why Linde is on sale. As the British cars before, ot the IBM computer (hardware). Others will join the train soon. What the point to build the commodity like product in Germany or US. Very expensive. The only delay is the degree of differentiation that alllows to keep the forklifts away from commodity. Aside of very narrow range of warehousing equipment, rest of lift trucks - is a commodity. And, because it is a commodity, the business dictates certain adjustments. One of those is - to build commoditylike products in the low cost labour countries. Period. Those who wants to keep the production in high cost countries needs to have a good reason or differentiation points to justify the price premiums.But do they have them?? Im most cases I doubt.
The famous Rover brand name, the former flagship of British car making, is to be sold to Chinese auto maker Shanghai Automotive Industry Corp. for just over £11-million ($23.3-million), the Financial Times reported yesterday. A spokesman for Bayerische Motoren Werke AG, which owns the rights to the Rover brand name, declined to comment on the report. “We are currently negotiating with a few interested parties, including SAIC, regarding the sale of the rights, but no agreement has yet been reached,” he said. SAIC has already acquired the design rights for a number of Rover cars for £67-million. BMW (Frankfurt) rose 39 euro cents to ¤39.60 ($56.90). AFP
The equipment business mirrors the automotive business to some extend. The look into an automotive market turbulences allows making a very close predictions regarding the equipment side.
And the prediction is that all the expensive equipment manufacturers will be sooner or later acquired by cheap labour cost manufacturers. This is possibly the reason why Linde is on sale. As the British cars before, ot the IBM computer (hardware). Others will join the train soon. What the point to build the commodity like product in Germany or US. Very expensive. The only delay is the degree of differentiation that alllows to keep the forklifts away from commodity. Aside of very narrow range of warehousing equipment, rest of lift trucks - is a commodity. And, because it is a commodity, the business dictates certain adjustments. One of those is - to build commoditylike products in the low cost labour countries. Period. Those who wants to keep the production in high cost countries needs to have a good reason or differentiation points to justify the price premiums.But do they have them?? Im most cases I doubt.
Technology: cell technology is no longer a stranger
Komatsu forklift for fuel cell demo
NASHVILLE, TN, United States
Komatsu distributor Material Handling Resources LLC (MHR) is collaborating with General Hydrogen Corporation to provide fuel cell battery replacement technology for a forklift customer.
Prediction: EVERY forklift manufacturer will try cell technology. This becomes a 'must have it' tendency. Next will be Heli. It is essentual as to have AC or speedreduction control. So what...?
As a result: a lot of money to hydrogen people, Some "first to come" companies had a good publicity (becase they were first); but rest of forklifts need to forget about 'hype' of hydrogen cell (or AC hype in the previous years) and concentrate on what they do - namely forklifts.
Everybody has hydrogen cell under testing. This will not attract new customers. So get back to business as usual now.
NASHVILLE, TN, United States
Komatsu distributor Material Handling Resources LLC (MHR) is collaborating with General Hydrogen Corporation to provide fuel cell battery replacement technology for a forklift customer.
Prediction: EVERY forklift manufacturer will try cell technology. This becomes a 'must have it' tendency. Next will be Heli. It is essentual as to have AC or speedreduction control. So what...?
As a result: a lot of money to hydrogen people, Some "first to come" companies had a good publicity (becase they were first); but rest of forklifts need to forget about 'hype' of hydrogen cell (or AC hype in the previous years) and concentrate on what they do - namely forklifts.
Everybody has hydrogen cell under testing. This will not attract new customers. So get back to business as usual now.
Friday, August 11, 2006
Technology: It is coming. Even to material handling... eventually
Business Travel In 2010: Biometrics, 3D, And RFID
By Lee Hamrick,
August 10, 2006 (9:20 AM EDT)
URL: http://www.techweb.com/tech/160900001
As Web conferencing gets better and better, you may find yourself wondering: In a few years, will we still need to travel for business?
In a word, yes. Web conferencing can be an efficient and inexpensive way to work with far-flung clients or co-workers, and as it becomes more popular, it will certainly cut down on business travel. But nothing can completely replace in-person interactions. Most companies will still want at least one face-to-face meeting before signing a big deal, for instance.
The good news is that business travel will likely be less tedious in the future. Airports and airlines are continually looking for ways to improve your experience before, during, and after a flight. And mobile technologies are making great leaps forward so you can get better use out of the downtime that inevitably accompanies travel.
The following fictional narrative imagines what business communications and travel might be like just a few short years from now. We're not talking wearable jetpacks or teleportation -- this is all based on real-world technologies that are in development or beginning to be available now.
So get ready: You're about to travel from New York to San Francisco in the year 2010.
-- Valerie Potter
Your Day Begins
New York City, 6:30 a.m. Eastern Daylight Time (EDT)
You wake up to NPR news. On the wall in your bedroom, a flat-screen display shows your daily schedule, the weather, and the e-mails and video-mails waiting for you. Uh-oh, there's an urgent message -- the v-mail screen is flashing red.
No bad news today, please. After months of Web conferencing, today's the day you're traveling to San Francisco for a face-to-face meeting with the new Chinese investors in your company. You'll shake hands and sign the deal that puts your mid-sized company on the international map.
Get it over with. "Display urgent v-mail," you say. The divided display screen disappears and is replaced by the face of John F. Kennedy. Through computer animation, the former U.S. president confirms that your flight is on time and informs you that an aisle seat is now available due to a last-minute cancellation. As a preferred JFK International Airport traveler on the waiting list for aisle seats, you can give up your middle-row seat and take the better seat. You jump at the chance. This service is offered through JFK's new Integrated Travel Department, a one-stop-shop for the business traveler. Having Mr. Kennedy as your customer service rep never fails to give you a thrill.
Jump in the shower, where there's more good news. You've gained two pounds of muscle, according to your health-monitor shower readout.
Dried and in your robe, you video-call the office. Your assistant Terry expects your call. She's been working on a holographic model of your trade-show booth that will be the highlight of today's presentation to the investors.
"Don't ask me anything right now," she says. She looks tired. "The booth looks flat and the Chinese characters look like a collection of pick-up sticks. Do we have to have the spinning globe at the entrance? A football I can do. An accurate topographical map of the world is asking too much. And don't tell me I look tired."
You stare at the screen with a look of hopeful expectation.
"Ving me back in a hour," she says. "I should have something for you to look at then." The display darkens, and your standard information screen appears.
Get dressed, grab your tablet and overnight bag, and you're out the door.
8:05 a.m. EDT
Snubbing the streamlined hybrid Cadillac that other executives ride to the airport (the car service hasn't gotten hip to hydrogen fuel-cell cars yet), you're one of the urbanites who takes pride in taking public transportation each and every time. It never hurts to save a $250 car fare, either. You beat the traffic, still hellish even with 40 percent of all workers telecommuting, and know that surveillance cameras help keep you safe even in the press of people on the subway. Like every New Yorker, you can repeat the recorded message word-for-word:
"Thank you for using New York Public Transportation. For your safety, and the safety of others, your trip is being recorded. If you need assistance, please contact our Safe Travel Bureau at 1-800-"
You can even repeat it in Spanish, Japanese, Mandarin, Arabic, and Russian -- the order the recording always uses.
At The Airport And In The Air
8:47 a.m. EDT
At the airport, you use the Ticketed Departing Passengers turnstile, press your right index finger to the reader, and your RFID boarding band spits out. Luckily you've got only carry-on luggage, so you don't have to get in line to check your bags. Even now they haven't figured out a way to make that process smoother. An airline employee still must take the bags, attach RFID tags, and time-stamp them, and passengers must still acknowledge responsibility for the contents of their luggage.
Wrap your identifying band around your wrist, and you're cleared for everyplace you want to go within the airport. Face-recognition software works hand-in-hand with the RFID wristband as you make your way. No sneaky trying to change bands, either. There was a flurry of activity when this system was first introduced -- mostly flyers with nonrefundable fares trying the switcheroo with the bands after selling their tickets to someone else. Not a good idea. A highly publicized and hotly debated trial in 2008 ended with a mother of two small children being sentenced to eighteen months of home confinement.
JFK has been redesigned in the style of the New Urbanist movement. It's like a small town, complete with sidewalks, open-air cafés, trees, and lighting controlled to reflect the passing of time. The loudest noise is conversation between travelers and the occasional crying child. Cell phones were banned in many areas of JFK last year. Gone, too, are the paging systems for passengers. Who needs them when anyone can be found using the RFID wristband system?
An elderly woman is walking toward you wearing some kind of exoskeleton. Oh, that must be one of those bionic suits that help infirm and disabled people get around. You've seen them on the news but never up close. The woman is smiling and moving with apparent ease. Cool.
9:00 a.m. EDT
It's been two hours since you checked in with the office. Flash your wristband at the Office Zone entrance and enter into its more raucous atmosphere. Here, passengers are shouting on cell phones, fingers are flying across typepads, even printers are working. Oh, look: There's someone with a pair of those ridiculous video glasses that were all the rage two years ago.
As you make your way to an empty cubicle, a nine-by-five-foot baby's head appears before you, gurgling and cooing. Whoa! "Sorry about that," says a shame-faced grandfather, who apparently lost control of his 3-D photo gallery.
Take a seat, pull out the scrolling screen from your computing tablet, and unfold the keyboard. Using your fingerprint and a password, you log on to the JFK wireless network. Touch base with Terry. She's in a better mood now, and so is your in-house counsel. The last changes to the contracts are in, approved by Beijing, and waiting at the hotel. The presentation is finished and is waiting on your company's internal wiki.
There are still a few minutes left before your flight boards, so you wander over to the concession kiosk, grab a bottle of water and a bag of trail mix, and swipe your finger across the scanner at checkout. The $12 you owe is automatically debited from your bank account.
10:20 a.m. EDT
Board the plane. As a trusted passenger, you're among the first called and avoid the longer lines. However, this time you are picked for a random iris scan. It's quick and painless, and the guard waves you through.
Take off. Wait the obligatory ten minutes for the airline's network to become available. Swipe your finger over the scanner on the seat back in front of you to access your wireless Internet access account. Run the presentation from your tablet in a one foot = .5-inch scale. There's your booth, in miniature, on your lap. Terry's outdone herself.
You want to call and congratulate her, but an e-mail will have to do. After allowing in-flight cell-phone use in 2007, airlines bowed to consumer outrage and banned cell-phone usage again in 2008. There's talk of re-instituting cell phones on planes when sub-vocalization technology (in which sensors detect soundless speech through nerve and muscle activity in the speaker's neck) becomes widespread, but for now you enjoy the opportunity to chat with your neighbor.
At Your Destination
San Francisco, 12:30 p.m. Pacific Daylight Time (PDT)
After you land, take Bay Area Rapid Transit (BART) from the airport to the hotel. Your itinerary shows you in room 814. Bypass the check-in desk and go straight to your room: Your fingerprint opens the door and checks you in.
As you enter, the lights and the wall-hanging monitor activate. A general welcome message from your concierge team plays. The screen then changes to a live view of the Golden Gate Bridge. You notice you have one message waiting. Touch the screen to play it.
"Good afternoon. The restaurant you requested had no tables at 8:00. I made a reservation for five at 7:30 p.m. If this time does not work, I have selected three similar restaurants nearby that do have openings at 8:00. You can view video presentations of these restaurants by selecting Play Videos Now from this screen. A listing of your hotel services itinerary follows."
The concierge is replaced by your listing. Good. Taxi arriving at 2:30 to take you to your business meeting. Back at the hotel by 4:30. Exercise class from 5:00 to 5:45, time for a steam, a change of clothes, and at the restaurant by 7:30. Since you have no changes, click OK to approve all. Freshen up and relax.
2:25 p.m. PDT
A recorded courtesy message informs you your taxi will be at the door of your hotel in five minutes.
In the taxi, you review the v-mail you've sent yourself on your tablet. Names and faces of everyone you'll be meeting, plus a brief refresher course of the projects you've worked together on for the past three years. Children's names, pastimes enjoyed, and concerns you've gleaned from your conversations with each. You're armed and ready.
4:40 p.m. PDT
You've dazzled them. Your preparations made doing business a snap. Contracts signed, you even had time to delve into the personal. You've got a date three months from now to see a Yankees game with your new partners. You bought the tickets right from your rented boardroom at the Fairmont Hotel, thanks to San Francisco's free Wi-Fi network.
7:30 p.m. PDT
Dinner.
10:00 p.m. PDT
3-D karaoke in Japantown. Together with your new partners, you raise a glass, then tear into a widely applauded rendition of "Octopus' Garden."
1:30 a.m. PDT
Back at the hotel. Call Terry at home. Tell her yes, you know it's 4:30 a.m., and that she's getting a 25-percent raise.
6:30 a.m. PDT
Your breakfast arrives. Shower (the readout notes that you're dehydrated), dress, and review your express checkout bill on the monitor. Agree to standard billing procedure (American Express corporate account, bill e-mailed to you and Accounting, frequent traveler miles updated), and you're homeward bound.
technology future
By Lee Hamrick,
August 10, 2006 (9:20 AM EDT)
URL: http://www.techweb.com/tech/160900001
As Web conferencing gets better and better, you may find yourself wondering: In a few years, will we still need to travel for business?
In a word, yes. Web conferencing can be an efficient and inexpensive way to work with far-flung clients or co-workers, and as it becomes more popular, it will certainly cut down on business travel. But nothing can completely replace in-person interactions. Most companies will still want at least one face-to-face meeting before signing a big deal, for instance.
The good news is that business travel will likely be less tedious in the future. Airports and airlines are continually looking for ways to improve your experience before, during, and after a flight. And mobile technologies are making great leaps forward so you can get better use out of the downtime that inevitably accompanies travel.
The following fictional narrative imagines what business communications and travel might be like just a few short years from now. We're not talking wearable jetpacks or teleportation -- this is all based on real-world technologies that are in development or beginning to be available now.
So get ready: You're about to travel from New York to San Francisco in the year 2010.
-- Valerie Potter
Your Day Begins
New York City, 6:30 a.m. Eastern Daylight Time (EDT)
You wake up to NPR news. On the wall in your bedroom, a flat-screen display shows your daily schedule, the weather, and the e-mails and video-mails waiting for you. Uh-oh, there's an urgent message -- the v-mail screen is flashing red.
No bad news today, please. After months of Web conferencing, today's the day you're traveling to San Francisco for a face-to-face meeting with the new Chinese investors in your company. You'll shake hands and sign the deal that puts your mid-sized company on the international map.
Get it over with. "Display urgent v-mail," you say. The divided display screen disappears and is replaced by the face of John F. Kennedy. Through computer animation, the former U.S. president confirms that your flight is on time and informs you that an aisle seat is now available due to a last-minute cancellation. As a preferred JFK International Airport traveler on the waiting list for aisle seats, you can give up your middle-row seat and take the better seat. You jump at the chance. This service is offered through JFK's new Integrated Travel Department, a one-stop-shop for the business traveler. Having Mr. Kennedy as your customer service rep never fails to give you a thrill.
Jump in the shower, where there's more good news. You've gained two pounds of muscle, according to your health-monitor shower readout.
Dried and in your robe, you video-call the office. Your assistant Terry expects your call. She's been working on a holographic model of your trade-show booth that will be the highlight of today's presentation to the investors.
"Don't ask me anything right now," she says. She looks tired. "The booth looks flat and the Chinese characters look like a collection of pick-up sticks. Do we have to have the spinning globe at the entrance? A football I can do. An accurate topographical map of the world is asking too much. And don't tell me I look tired."
You stare at the screen with a look of hopeful expectation.
"Ving me back in a hour," she says. "I should have something for you to look at then." The display darkens, and your standard information screen appears.
Get dressed, grab your tablet and overnight bag, and you're out the door.
8:05 a.m. EDT
Snubbing the streamlined hybrid Cadillac that other executives ride to the airport (the car service hasn't gotten hip to hydrogen fuel-cell cars yet), you're one of the urbanites who takes pride in taking public transportation each and every time. It never hurts to save a $250 car fare, either. You beat the traffic, still hellish even with 40 percent of all workers telecommuting, and know that surveillance cameras help keep you safe even in the press of people on the subway. Like every New Yorker, you can repeat the recorded message word-for-word:
"Thank you for using New York Public Transportation. For your safety, and the safety of others, your trip is being recorded. If you need assistance, please contact our Safe Travel Bureau at 1-800-"
You can even repeat it in Spanish, Japanese, Mandarin, Arabic, and Russian -- the order the recording always uses.
At The Airport And In The Air
8:47 a.m. EDT
At the airport, you use the Ticketed Departing Passengers turnstile, press your right index finger to the reader, and your RFID boarding band spits out. Luckily you've got only carry-on luggage, so you don't have to get in line to check your bags. Even now they haven't figured out a way to make that process smoother. An airline employee still must take the bags, attach RFID tags, and time-stamp them, and passengers must still acknowledge responsibility for the contents of their luggage.
Wrap your identifying band around your wrist, and you're cleared for everyplace you want to go within the airport. Face-recognition software works hand-in-hand with the RFID wristband as you make your way. No sneaky trying to change bands, either. There was a flurry of activity when this system was first introduced -- mostly flyers with nonrefundable fares trying the switcheroo with the bands after selling their tickets to someone else. Not a good idea. A highly publicized and hotly debated trial in 2008 ended with a mother of two small children being sentenced to eighteen months of home confinement.
JFK has been redesigned in the style of the New Urbanist movement. It's like a small town, complete with sidewalks, open-air cafés, trees, and lighting controlled to reflect the passing of time. The loudest noise is conversation between travelers and the occasional crying child. Cell phones were banned in many areas of JFK last year. Gone, too, are the paging systems for passengers. Who needs them when anyone can be found using the RFID wristband system?
An elderly woman is walking toward you wearing some kind of exoskeleton. Oh, that must be one of those bionic suits that help infirm and disabled people get around. You've seen them on the news but never up close. The woman is smiling and moving with apparent ease. Cool.
9:00 a.m. EDT
It's been two hours since you checked in with the office. Flash your wristband at the Office Zone entrance and enter into its more raucous atmosphere. Here, passengers are shouting on cell phones, fingers are flying across typepads, even printers are working. Oh, look: There's someone with a pair of those ridiculous video glasses that were all the rage two years ago.
As you make your way to an empty cubicle, a nine-by-five-foot baby's head appears before you, gurgling and cooing. Whoa! "Sorry about that," says a shame-faced grandfather, who apparently lost control of his 3-D photo gallery.
Take a seat, pull out the scrolling screen from your computing tablet, and unfold the keyboard. Using your fingerprint and a password, you log on to the JFK wireless network. Touch base with Terry. She's in a better mood now, and so is your in-house counsel. The last changes to the contracts are in, approved by Beijing, and waiting at the hotel. The presentation is finished and is waiting on your company's internal wiki.
There are still a few minutes left before your flight boards, so you wander over to the concession kiosk, grab a bottle of water and a bag of trail mix, and swipe your finger across the scanner at checkout. The $12 you owe is automatically debited from your bank account.
10:20 a.m. EDT
Board the plane. As a trusted passenger, you're among the first called and avoid the longer lines. However, this time you are picked for a random iris scan. It's quick and painless, and the guard waves you through.
Take off. Wait the obligatory ten minutes for the airline's network to become available. Swipe your finger over the scanner on the seat back in front of you to access your wireless Internet access account. Run the presentation from your tablet in a one foot = .5-inch scale. There's your booth, in miniature, on your lap. Terry's outdone herself.
You want to call and congratulate her, but an e-mail will have to do. After allowing in-flight cell-phone use in 2007, airlines bowed to consumer outrage and banned cell-phone usage again in 2008. There's talk of re-instituting cell phones on planes when sub-vocalization technology (in which sensors detect soundless speech through nerve and muscle activity in the speaker's neck) becomes widespread, but for now you enjoy the opportunity to chat with your neighbor.
At Your Destination
San Francisco, 12:30 p.m. Pacific Daylight Time (PDT)
After you land, take Bay Area Rapid Transit (BART) from the airport to the hotel. Your itinerary shows you in room 814. Bypass the check-in desk and go straight to your room: Your fingerprint opens the door and checks you in.
As you enter, the lights and the wall-hanging monitor activate. A general welcome message from your concierge team plays. The screen then changes to a live view of the Golden Gate Bridge. You notice you have one message waiting. Touch the screen to play it.
"Good afternoon. The restaurant you requested had no tables at 8:00. I made a reservation for five at 7:30 p.m. If this time does not work, I have selected three similar restaurants nearby that do have openings at 8:00. You can view video presentations of these restaurants by selecting Play Videos Now from this screen. A listing of your hotel services itinerary follows."
The concierge is replaced by your listing. Good. Taxi arriving at 2:30 to take you to your business meeting. Back at the hotel by 4:30. Exercise class from 5:00 to 5:45, time for a steam, a change of clothes, and at the restaurant by 7:30. Since you have no changes, click OK to approve all. Freshen up and relax.
2:25 p.m. PDT
A recorded courtesy message informs you your taxi will be at the door of your hotel in five minutes.
In the taxi, you review the v-mail you've sent yourself on your tablet. Names and faces of everyone you'll be meeting, plus a brief refresher course of the projects you've worked together on for the past three years. Children's names, pastimes enjoyed, and concerns you've gleaned from your conversations with each. You're armed and ready.
4:40 p.m. PDT
You've dazzled them. Your preparations made doing business a snap. Contracts signed, you even had time to delve into the personal. You've got a date three months from now to see a Yankees game with your new partners. You bought the tickets right from your rented boardroom at the Fairmont Hotel, thanks to San Francisco's free Wi-Fi network.
7:30 p.m. PDT
Dinner.
10:00 p.m. PDT
3-D karaoke in Japantown. Together with your new partners, you raise a glass, then tear into a widely applauded rendition of "Octopus' Garden."
1:30 a.m. PDT
Back at the hotel. Call Terry at home. Tell her yes, you know it's 4:30 a.m., and that she's getting a 25-percent raise.
6:30 a.m. PDT
Your breakfast arrives. Shower (the readout notes that you're dehydrated), dress, and review your express checkout bill on the monitor. Agree to standard billing procedure (American Express corporate account, bill e-mailed to you and Accounting, frequent traveler miles updated), and you're homeward bound.
technology future
Thursday, August 10, 2006
Product: Fuel cell - Ballard
Ballard targets forklifts for fuel cells
VANCOUVER, Canada
Thursday, 10 August 2006
by US correspondent Roger Renstrom
Fuel-cell-stack developer Ballard Power Systems Inc is focusing on forklifts while it waits “seven or eight years” for the automotive world to broadly implement its technology.
The forklift, residential cogeneration and backup power segments may become “very large markets,” John Sheridan, Vancouver-based Ballard CEO, said during a July 26 conference call with security analysts. “We are focused very sharply on positive margin revenue growth as we go forward. We see significant potential” in the non-automotive market.
During the second quarter ended June 30, Ballard shipped 36 of its liquid-cooled hydrogen-fueled Mark 9 SSL to the forklift market and booked new orders for two units. The Mark 9 SSL is a direct derivative of an automotive fuel cell product. Ballard shipped 102 of its hydrogen-rich reformate-fuel-based Mark 1030 for forklift, residential cogeneration and back-up power applications, and it booked 94 new orders for the product.
Ballard lead customers General Hydrogen Corp and Cellex Power Products Inc “are currently active in field trials and demonstration programs with five major forklift end users including Bridgestone and Wal-Mart,” Sheridan said. “The operational feedback continues to be positive on a number of key parameters” such as product life, time between failures and refueling efficiencies.
Ballard develops, manufactures and markets zero-emission proton exchange membrane fuel cell stacks, and lead customers such as General Hydrogen and Cellex Power handle systems integration, fueling and sales with end users.
Across the global industrial truck market, Ballard estimated there could be sales of about 400 fuel-cell units for forklifts this year, 1,000-2,000 units per year in 2007 and 2008 and 6,000-12,000 units per year in 2009 and 2010.
hydrogen lifttruck technology
Friday, August 04, 2006
Case: part 3
1.1.3 Latest developments
New product expansion brought new challenges to ATRAC. The LT market proved to be different from WE, where ATRAC had its expertise. The intense rivalry in LT, a market with an economy that is close to the perfect competition model(The Perfect competition model requires five parameters to be fulfilled: atomicity (large group of producers and consumers), homogeneity (goods are perfect substitutes, low differentiation), perfect information, equal access to technology and resources, and free market entry and exit.) , puts enormous cost pressure on all equipment vendors. The equipment users in the new LT market and their requirements were different from those in the WE market. Following cost pressures, ATRAC started transforming its initial differentiation strategy. The strategy eventually drifted towards a low cost model by adding low cost product lines such as Heli Forklift and other ”me-too” product lines, and in some cases reducing the amount or the quality of service. Eventually, the company’s experiments with lowering costs in some cases and increasing differentiation in others led to the point where the company’s strategy became mixed and confused.
1.1.4 Product mix
Currently ATRAC offers a wide range of products and covers all sectors in the material handling equipment industry. A wide range of products suggests a very broad customer base. A brief summary of ATRAC’s product offerings is indicated in the following diagram (Figure 1), which shows most of the common products and the most common industry segments served by ATRAC.
Figure 1: ATRAC’s product mix
ATRAC carries equipment from Crown Equipment, Nissan Equipment, Heli Industrial Equipment, Taylor Dunn, and Isle Master. Crown products, in some classes of equipment, competes directly with Nissan and Heli, Nissan Forklift is a direct competitor to Heli Industrial Equipment, and some Isle Master products substitute for those in Crown’s range. Such a brand-products mix situation is typical for the industry.
1.1.5 Current strategy:
ATRAC’s current strategy is to supply the entire material handling equipment industry with the maximum possible range of products by providing quality services. The two biggest equipment segments, WE and LT, however, have different rivalry intensities and market forces. The WE segment allows differentiation, while LT, with its enormous cost pressure, makes a differentiation model very difficult. Competition in both market segments has forced ATRAC to change its initial differentiation business model and to apply a differentiation strategy in one industry segment and low cost strategy in others. As mixing two opposing strategies within one company is practically impossible, the resulting strategy became a mix of both strategies.
1.1.6 Company challenges
The mixing of two opposing strategies within one company has become the biggest challenge for ATRAC. ATRAC can’t lower costs while operating in a cost-sensitive market because it still has a legacy of a differentiation business model in WE. Nor can ATRAC better differentiate in WE, which requires differentiation, because the company’s services have already been affected by its low cost strategy. The resulting “mix” strategy doesn’t work effectively as the basis of competition, for both industry segments are different. By applying a single strategy, ATRAC can’t compete well in either industry segment, which represents an efficiency problem.
case strategy equipment analysis
New product expansion brought new challenges to ATRAC. The LT market proved to be different from WE, where ATRAC had its expertise. The intense rivalry in LT, a market with an economy that is close to the perfect competition model(The Perfect competition model requires five parameters to be fulfilled: atomicity (large group of producers and consumers), homogeneity (goods are perfect substitutes, low differentiation), perfect information, equal access to technology and resources, and free market entry and exit.) , puts enormous cost pressure on all equipment vendors. The equipment users in the new LT market and their requirements were different from those in the WE market. Following cost pressures, ATRAC started transforming its initial differentiation strategy. The strategy eventually drifted towards a low cost model by adding low cost product lines such as Heli Forklift and other ”me-too” product lines, and in some cases reducing the amount or the quality of service. Eventually, the company’s experiments with lowering costs in some cases and increasing differentiation in others led to the point where the company’s strategy became mixed and confused.
1.1.4 Product mix
Currently ATRAC offers a wide range of products and covers all sectors in the material handling equipment industry. A wide range of products suggests a very broad customer base. A brief summary of ATRAC’s product offerings is indicated in the following diagram (Figure 1), which shows most of the common products and the most common industry segments served by ATRAC.
Figure 1: ATRAC’s product mix
ATRAC carries equipment from Crown Equipment, Nissan Equipment, Heli Industrial Equipment, Taylor Dunn, and Isle Master. Crown products, in some classes of equipment, competes directly with Nissan and Heli, Nissan Forklift is a direct competitor to Heli Industrial Equipment, and some Isle Master products substitute for those in Crown’s range. Such a brand-products mix situation is typical for the industry.
1.1.5 Current strategy:
ATRAC’s current strategy is to supply the entire material handling equipment industry with the maximum possible range of products by providing quality services. The two biggest equipment segments, WE and LT, however, have different rivalry intensities and market forces. The WE segment allows differentiation, while LT, with its enormous cost pressure, makes a differentiation model very difficult. Competition in both market segments has forced ATRAC to change its initial differentiation business model and to apply a differentiation strategy in one industry segment and low cost strategy in others. As mixing two opposing strategies within one company is practically impossible, the resulting strategy became a mix of both strategies.
1.1.6 Company challenges
The mixing of two opposing strategies within one company has become the biggest challenge for ATRAC. ATRAC can’t lower costs while operating in a cost-sensitive market because it still has a legacy of a differentiation business model in WE. Nor can ATRAC better differentiate in WE, which requires differentiation, because the company’s services have already been affected by its low cost strategy. The resulting “mix” strategy doesn’t work effectively as the basis of competition, for both industry segments are different. By applying a single strategy, ATRAC can’t compete well in either industry segment, which represents an efficiency problem.
case strategy equipment analysis
Thursday, August 03, 2006
Product: Fuel cell
Fuel cell orders received for forklifts in North America, Asia
MISSISSAUGA, Canada
Thursday, 03 August 2006
Hydrogenics Corp has received orders for installations of its fuel cell power packs in class 1 forklifts for use in North America and Asia.
Two of the company’s HyPM-brand packs would go into use on a pair of North American-based Still forklifts, and another would be integrated into a forklift for an unidentified Japanese original equipment manufacturer (OEM), a Hydrogenics statement said.
The Still RX60-40 forklifts have a 10,200lb (4,590 kg) lifting capacity. UK-based Still manufactures forklifts that are widely used in the North American automotive industry.
Hydrogenics also will supply HyPM packs for two Still-made R07 tow tractor vehicles for deployment at Hamburg Airport, Germany.
Germany-based Linde AG’s gas division will provide fuel for the integrated forklifts and tow tractors.
Hydrogenics packs have a company-proprietary HyPM 12 fuel cell power module to handle base-load requirements, energy-storing ultracapacitors to deal with peak loads and the capability to capture energy through regenerative braking.
MISSISSAUGA, Canada
Thursday, 03 August 2006
Hydrogenics Corp has received orders for installations of its fuel cell power packs in class 1 forklifts for use in North America and Asia.
Two of the company’s HyPM-brand packs would go into use on a pair of North American-based Still forklifts, and another would be integrated into a forklift for an unidentified Japanese original equipment manufacturer (OEM), a Hydrogenics statement said.
The Still RX60-40 forklifts have a 10,200lb (4,590 kg) lifting capacity. UK-based Still manufactures forklifts that are widely used in the North American automotive industry.
Hydrogenics also will supply HyPM packs for two Still-made R07 tow tractor vehicles for deployment at Hamburg Airport, Germany.
Germany-based Linde AG’s gas division will provide fuel for the integrated forklifts and tow tractors.
Hydrogenics packs have a company-proprietary HyPM 12 fuel cell power module to handle base-load requirements, energy-storing ultracapacitors to deal with peak loads and the capability to capture energy through regenerative braking.
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