TRANS-COSMOS INC CHINA ENTRY STRATEGY PRESENTATION(英文版)(ppt 116页).ppt

ENTRYFORPROFITTRANS COSMOSINC CHINAENTRYSTRATEGYPRESENTATION February8 2001 AGENDA ExecutiveSummaryCallCenterBusinessMarketOverviewCCCustomerSegmentationIn houseusersOutsourcersDemandCustomerEconomicsCompetitionRecommendationsSuccessbusinessmodelPartneringstrategyE CommerceMarketOverviewTCITianjinCurrentSituationAnalysisRecommendations AGENDA ExecutiveSummaryCallCenterBusinessMarketOverviewCCCustomerSegmentationIn houseusersOutsourcersDemandCustomerEconomicsCompetitionRecommendationsSuccessbusinessmodelPartneringstrategyE CommerceMarketOverviewTCITianjinCurrentSituationAnalysisRecommendations CHINAISBECOMINGAHIGHLYDYNAMICCCMARKET China scallcentermarkettookoffsince1998withanannualgrowthrateover100 Non pagingmarketsizereached54 000seatsin2000HoweverpastgrowthwaslargelydrivenbydemandsfromadministrativedrivensectorOver60 ofthenewCCdemandcomesfromfourpillarindustries Banking PostServices Fixed lineTelecom andInsuranceDistinctivepurchasingbehavioridentifiedforthesepurchasesFuturegrowthwillbepropelledbyserviceorientedandoutsourcingsegmentsServiceorientedsegmentexpectedtobe50 oftotalCCmarketOutsourcingmarketwillgrowatleast50 ayearforthenextfewyearsHoweverlargevarianceexistsforoutsourcingsegmentgrowthOverall ChinaCCmarketisexpectedtoreachover130 000seatsin2004and340 000seatsin2010 CCOURSOURCERSAREEMERGINGBUTSTILLEXPLORING I Currently CCoutsourcingbusinessisbrandnewinChinaNomorethan30companiesprovidingmerelyabout3 200seatsinserviceOver70 80 supplyconcentratedin4majorcitiesFutureoutsourcingdevelopmentishighlydependentoncurrentplayer sperformanceandstrategiesPotentialcustomersconcernedaboutquality confidentiality informationprocessingability HR andpriceGrowthwillfluctuatewidelyaccordingtotheindustry sabilitytosatisfycustomerconcernsandrequirementsnowInshortterm competitionwillbeminimumduetohighlydifferentiatedpositionsandlargenumberofunexploitedpotentialoutsourcingcustomersInmediumterm pagingcompaniescanbepowerfulanddesperatecompetitorsinthelow endoutsourcingmarketThatmightdistorttheindustryprofitabilityandtriggerviciouscompetitionHoweverhigh endoutsourcingmarketmightbeintact Currently onlylow price standardservicevendorsareprofitableUtilization andtherefore long termcustomers isthekeyforprofitabilityHowever high pricedoutsourcingsolutionsnotwidelyacceptedbythemarketButinthelong run webelievehigh endserviceswillbevaluedbycustomersWeareencouragedbyrecentpositivenewsonclients long termcommitmentstohigh endoutsourcersWithChina spendingWTOEntryandcontinuedeconomicgrowth webelieveit sthedirectionHigh endoutsourcerscanwinthegamebyaggressivelyestablishinglong termclientbase andtargetingvariousoutsourcingopportunitiesalongthevaluechainFivesuccessfulstrategiesidentifiedfornewcustomerdevelopmentTelemarketingandvalue addedinformationservicemostlikelytobeoutsourced CCOURSOURCERSAREEMERGINGBUTSTILLEXPLORING II TCISHOULDPARTNERWITHRIGHTLOCALCCOUTSOURCERS ApartneringstrategyisessentialforTCItocapturethegreatopportunitiesinChinaTCIlacksabunchoflocalcapabilities whiletimeiscontingentTCIshouldtargetbothmoneymaking andmoneylosingtechadvancedoutsourcersduringnegotiationprocess basedontwoplausiblepartnershipstrategiesMoneymakingones shareprofitsandleveragelocalstrengthMoneylosingones controlandnegotiateforabargaindealConsideringthelimitednumberofcandidatesinChinaandTCI stightschedule abroadersearchcanstrengthenTCI snegotiationpositionFivepromisingoutsourcersidentifiedduringtheinterviewprocessMoneymakingones ChinaMotion 800Teleservices andCompaq StarMoneylosingones TCY ITSShanghai EC ONLYSOFTWAREFIRMSANDSIsWORTHPURSUING Althoughunderbooming ChinaE CommercemarketareexperiencingbottlenecksOnlinepopulationandrevenuesgrew10timesinthepast3yearsHowever macro environmentandinfrastructureareproblematic andonlyfewICP ISPsaremakingmoneyICP ISPandtechnologycompanies asasector arenotworthTCI spursuitICP MarketisdownwhilemostChinaICPsarestillattheirearlystagedevelopmentISP Highlyfragmentedandregulated whichsuffocatebothforeignparticipationandprofitabilityTechcompanies SuperioronescanhardlysurviveinChinaHowever severaltopventuresintheabovesectorsarequiteinteresting whichareidentifiedandillustratedindetailforTCI sfurtherinterestICP S A DISP 263Net Eastnet TCI TJ RSTRUCTURINGANDBUILDINGSTRATEGICALLIANCES TCI TJexperienceddifficultiesduetobothpromotionandmanagementissuesThoughimproving thefirmisintrinsicallyuncompetitiveinChinamarketItshouldrestructureforbetterperformance RedefinecorporatemissionsandstrategiesRestructureprojectarrangement reporting measurementandincentivesystemsRefocusitssalesonJapanesecompaniesinChinaandinJapan andfindstrategicallianceforTCI sChinaexpansionTCIshouldonlypartnerwithprestigiouslocalsoftwarecompanyorsystemintegratorsWisewayscreenedallthepotentialcandidateslistsandfunneleddown5mostpromisingcompaniesforTCI sfurthercontactLongshine GlobaleForce eBIS ModernComputer HuatengSoftware AGENDA ExecutiveSummaryCallCenterBusinessMarketOverviewCCCustomerSegmentationIn houseusersOutsourcersDemandCustomerEconomicsCompetitionRecommendationsSuccessbusinessmodelPartneringstrategyE CommerceMarketOverviewTCITianjinCurrentSituationAnalysisRecommendations CCMERELYABUSINESSPRACTICEBEFORE1997 Hightelecomcharge Lowphonepenetration Weakserviceattitude Widespreadindustrymonopoly CommercialCClessthan10 000seatsin1997 2 Phonecallcharge centsperminute China US Phonepenetration ofphones 1 million 1997 82 53 99 229 AutomotiveExample ExpertSurvey1997 Price Competitionfocus 1 Fixedline mobile 2 Excludingabout50 000seatsinpagingcompanySource WorldDevelopmentReport1999 2000 ChinaAutoMarket1997 JardingFlemingResearch interviews Quality Service Style NationalmonopolyBankingTelecomInsuranceUtilitity RegionalprotectedSteelAutoPetrochemicalTobacco Monopolizedindustryestimated55 ofindustrialoutput Highertelecompenetration COMMERCIALCCTOOKOFFSINCE1998EspeciallyinNon PagingServiceSector Penetration Year CAGR FixedlineMobile 37 83 Non pagingCCseats 000 Year CAGR 129 Intensifiedcompetition MostindustriescapacityoverproductionDecliningretailprices Year GDPindexRetailpriceindex Index Growingawarenessoftechnology Internetusers mio E Commercerevenue US M Graduallyreducedtelecomfee Source JardingFlemingResearch ChinaStatisticsYearbook interviews OECD ChinaTelecom Longdistance RMB min 1 2 0 8 1 0 0 7 CCINDUSTRYWILLREACH330 370KSEATSIN2010 Illustration IdentifymajordrivingfactorstoCCadoption marketcompetitionandserviceawareness telecomchargesandphonepenetrationQuantifyrelationshipsbetweendriversandCCadoptionhereweusedUSbenchmarkProjectCCdevelopmentbyforecastingdevelopmentofdriversProjectCCpenetrationinmajoruser sindustries banking telecom insurance AddupnumbersofeachindustrytogiveaCCmarketoverviewInterviewindustryexpertsorknowledgeableindustrypractitionersfortheiropinionofCCmarketgrowth systemintegratorsandexperts 2004projection 1 000seats 158132145 2010projection 1 000seats 368337N A Drivingfactoranalysis Bottom upanalysis Expertsopinions 1 Withoutpagingcompany TOP DOWNAPPROACHREVEALSAPROMISINGENDGAME Phonelineper1000people CCagentsper1000people USbenchmark Y 0 00146X 4 79 Deflatedtelecomfeeindex Phonelineper1000people Chinaphoneline Year Non pagingCCseats 000 Source USTelephoneStatistics Datamonitor MIIdata ChinaStatisticsYearbook 1998 99 2000 01 04 10 REDUCINGTELECOMCHARGESWILLBOOSTFIXED LINEADOPTION Backup Competitionpushesfurthertelecomreduction Mostalternativesatleast50 cheaperIP internetphonecall callback services Ministrydeterminedtofurtherreducetelecomcharges Currenttelecomchargestilldoesnotreachitsoptimumstageyet MinisterofMII Telecomreductionprojection Phonepenetrationper1000 Deflatedpriceindex 1 Phonelineper1000people Year 1 PricedeflatedbyGDPindexSource ChinaTelecomChargesPolicyBook Wisewayanalysis TELECOMISTHEMOSTSIGNIFICANTCCUSERNOWBottom upAnalysis Industry TelecomMobileBankingInsurancePostserviceManufacturingComputerAirlineSecurityCourierHomeapplianceTVsellingOthersOverall Projectedseats CAGR 200025 0007 6674 5452 0001 6001 5018005942572402403006 67551 419 200435 71422 85711 1003 7606 0007 5195 2504 1004 1581 0002 4601 00026 669131 588 201041 66750 00047 0009 85020 83325 18414 0009 60032 6003 3338 8002 00071 965336 832 2000 049 31 25 17 39 50 60 62 101 43 79 35 41 26 2004 103 14 27 17 23 22 18 15 41 22 24 12 18 17 Source interviews onlineresearch expertsopinions wisewayanalysis EXPERTOPINIONSREVEALAMARKETOF145 000IN2004 Fastdevelopmentisexpectedtocontinueinthenextfiveyears Ibelievethatcallcentersseatswillgrowat30 ayearforthenextfiveyears whichmeans145 000in2004 Director CTIForum Comparedto1999 in2000callcenterseatsincreasedby142 or16 000seats ChinaComputerNews Inthenextthreeyears weprojectthatcallcenterseatswilldouble It sourconservativeestimate ManagerofBusinessDevelopmentDept Huawei Source Wisewayinterviews AGENDA ExecutiveSummaryCallCenterBusinessMarketOverviewCCCustomerSegmentationIn houseusersOutsourcersDemandCustomerEconomicsCompetitionRecommendationsSuccessbusinessmodelPartneringstrategyE CommerceMarketOverviewTCITianjinCurrentSituationAnalysisRecommendations CHINACCUSERBASEVERYDIFFERENTFROMU S Selectedindustryexplanation TelecomChinatelecomcallcenterinvestmentisstillquitegovernmentdriven Topromote 189 serviceline MIIdemandcallcenterateachcity countylevelManufacturingManufacturingCCusagestillnotwidelyadoptedyet Moststate ownedcompaniesareunwillingandunabletoinvestinserviceRemoteshoppingAlthoughremoteshoppingisthebiggestCCuserintheUS it smerelythecaseherebecauseofinconvenientpayment creditanddeliverysystem Also shoppingconvenienceinmetropolitanareaandgeneralpoorconsumptionpowermakeremoteshoppingeconomicallyunsound OthersOutsourcing SecurityTVsellingNews mediaAirlineComputer Tech ManufacturingPostservice InsuranceBankingMobileFixed lineTelecom China US OthersOutsourcingTransportHealthcareUtilitiesRemoteshoppingSecurities AirlineTechnologyManufacturing InsuranceBankingTelecom Our1 5monthsinterviewshavewellcoveredtheaboveindustries Source Datamonitor Interviews onlineresearch expertopinions Wisewayanalysis CCMARKETROUGHLYSEGMENTEDINTOFOURCATEGORIESAccordingtoAreaofCCUsage andWillingnesstoOutsource Selectedindustryexamples Willingnesstooutsource High Low Service oriented Outsourcing Genericservice Admin driven Securities Homeappliance Computer technology Courierservice Publication TVselling Messaging Travel Simpleordertaking Paging Telecom Insurance Bank Postservice Communityservice Utility Corearea Non corearea AreaofCCusage THREECRITERIATODISTINGUISHCOREANDNON COREAREA Industry CoreArea SecuritiesCourierserviceComputer technology GreyArea HomeapplianceBankingInsurancePublicationTelecomTraveling Non coreArea generic PagingserviceMessagingTVsellingUtilities Functionality TechnicalassistanceAftersalesserviceCustomercomplaintsettlement Sourcing suppliercoordinationCustomerinquirysettlementTelemarketing MessagedeliveringSimpleordertaking CallCenter simpacttooverallbusiness Core WhenCCfunctioniscriticaltotheperformanceoftheindustryConfidentialityrequirement Core Iftheindustry functionalitycommandsstrictconfidentialityCallCenteroperationalcomplexity Core IfoperatingCCinthisindustryrequiresgreatsophistication Criteria Manyindustrieshavebothcoreandnon coreareas Backup MANAGEMENTANDOWNERSHIPSTRUCTUREAFFECTWILLINGNESSTOOUTSOURCE Considerations OwnershipstructureCompanysizeCompetitionManagementsophistication Reasons SOEsconsidereconomicslessand managementauthority more Prefertobuildin houseinordertoincreasemanagementpowerandassetsCallCenterinvestmentislesssignificanttolargecompanies Also theiragents needscanjustifyasizablein houseoperationMonopolizedindustrytendstobeadmin driven ortodisregardCCsolutiontotallyPoorlymanagedcompanies industriesseemuchlessvalueofcallcenterstotheirbusinessimprovement SOE 1 LargeMonopolizedindustryPoorlymanaged PrivatelyownedforeigninvestedSmall to mediumMarket driven competingindustryWellmanaged Lesswilling Morewilling 1 SOE State ownedenterprise Backup AGENDA ExecutiveSummaryCallCenterBusinessMarketOverviewCCCustomerSegmentationIn houseusersOutsourcersDemandCustomerEconomicsCompetitionRecommendationsSuccessbusinessmodelPartneringstrategyE CommerceMarketOverviewTCITianjinCurrentSituationAnalysisRecommendations ADMIN DRIVENSEGMENT MOSTIMPORTANTFORNOW High intotalnewCCdemand Drivenby Pillarindustries DemandsurgedinagroupofChina simportantindustriessince1999 aimingtoimproveservicelevelBankPostserviceFixed linetelecomInsuranceRequiredmostlymid to highendcallcentersolutions Nortel Lucent IBM Huawei Big monopolized profitablecorporationsHighcostoffailureBudgetapprovalfromaboveOfteninconjunctionwithstructuralreform 4 9 ofnewCCseats 000 Year Admin driven 11 2 29 5 TotalnewdemandAdmin driven 66 76 62 Source Wisewaymodeling HOWEVERDEMANDEXPECTEDTOFLUCTUATEINTHEFUTURE UnderlyingReasons Admin drivensegmentorderscomeinbatchesCallcenterconstructionproposalofteninitiatedbygovernment controlledcorporateheadquarters orevenministriesBranchcompaniesrequiredtocompletecallcenterconstructionwithinsimilarperiodoftimeAdmin drivencorporationstendtoover investBranchofficesincentivizedtouseupthebudgetadvisedbyheadquarterHoweverfewadmin drivenindustriesareexpectedtoinvestincallcentersforthefollowingyearsOnlytwoindustriesexpected utilityandrailtransportation ofnewcallcenterseats 000 Year Bankingexample Source Wisewaymodeling interviews literatureresearch Admin driven UNIQUETHREE TIERDECISIONMAKINGPROCESSSystemIntegratorsShouldPutEffortstoAll Top downinitiatives AdvocateimprovingservicestandardMake servicefacilities anevaluationcriteriaMaysuggestcallcenterasanoptionDeterminerollingoutcallcentersinthecorporationRaisealistofrecommendedsystemintegratorsPresentthelisttobranchcompaniesSetabudgetfordifferentbranchcompaniesDecidecallcentersizeandsophisticationbasedoncorporatebudgetNegotiateandselectasystemintegratormostlysuitabletothebranch srequirements SIshouldpayattentiontoMinistry srecentserviceimprovementincentive Ministry SIshouldapproachpromisingcorporateheadquartersinadvancetogetthenameonthelist Corporateheadquarter SIshouldputmosteffortstoinfluencebranchcompany sselection Provincial regionalbranches Admin driven OUTSOURCINGALMOSTNEVERANOPTIONFORADMIN DRIVENCOMPANIES OutsourcingisnotconsideredanoptionforCCadoptionatcorporatelevelWorriedaboutunforeseeableconsequencesMoneysavingisnotapriorityforthesebig monopolizedSOEsUnabletodistinguishdifferentconditionsindifferentgeographysomeareasdon thavesatisfactoryoutsourcersPoliticallyriskyforbranchmanagerstobe creative Ifusingoutsourcers branchmanagershavetobearallresponsibilitiespotentialforfailureisconsiderableCCconstructionbudgetwouldbeinvainifnotusedupwhileoutsourcingbudgetneedstobereportedforupperapprovalAnd themoneyisnotmineOnlyexceptionisGuangzhouMobileCompany soutsourcingofits MobileSecretary serviceBynatureapagingservice Idealtobedonebyapagingcompany MobileSecretary serviceisnotplannedandbudgetedfromthecorporation ChinaMobile Guangzhou sbusinesspracticeismoreliberalthanrestofChina Admin driven SERVICE ORIENTEDSEGMENT ADRIVERFORLONG TERMCCPENETRATION Rapidgrowthinthelong term Widespreadadoptionexpectedinmarket drivenindustries HeatedcompetitionwillstimulateCCusageinmass marketindustriesWTOwillnotonlyliftvariouslocalprotectionism butalsointroduceglobalcompetitionCurrentover capacitysituationwon talleviateforthenextseveralyearsTherefore servicewillbemoreandmoreimportanttocreatedifferentiationWithbettermarketenvironment consumersareeducatedtoappreciateserviceWTOwillintroduceworld levelserviceconcepts includingcallcenter toChina Totalnon pagingCCseats 000 Service oriented 10 Year 50 337 TotalCCseatsService oriented 26 24 50 132 42 Source Interviews onlineresearch expertopinions Wisewayanalysis MOREINDUSTRIESARELIKELYTOADOPTCCOVERTIME CCAdoptionArea Homeappliance Automotive Computer Mobile Securities Retailing Petrochemical Distribution FMCG 1 Taxi Textile Machinery Chemical Publication Healthcare Government Entertainment Broadcasting TV Aviation GeneralTechnology High Moderate Low Competitionintensity High Horizontalwillextendovertime Importanceofservice 1 Fast movingconsumergoodsSource Interviews literatureresearchsummaries wisewayanalysis Horizontalwillextendovertime Service oriented COMPANIESQUITESELECTIVEONCCUSAGE Notblindlychasingafterhigh endsolutions Integratingcallcenterswithitscorebusinesspractice Interviewssummary Source Interviews Investmentperseat 000RMB Interviewssummary Aftersalesservice Ordertaking Informationservice Telemarketing 10 70 Service oriented VERYCAUTIONSONCCOUTSOURCING Price Thepriceforoutsourcingistoohighnow forexample 95Infocharges15 000RMB month 180 000RMB year perseat mostcompaniescannotundertakeit SalesManager SIEMENS Quality Chinesecallcenteroutsourcershaveinadequateservicementality wemostlyworriedabouttheirservicequality HotLineSupervisor EPSONChina Humanresources Ordinaryoutsourcer sagentscanonlyhandlesimplequestions Itrequiresexperiencedengineerstodealwithcomplexproblems HotLineSupervisor EPSONChina Confidentiality Weoncewantedtooutsourcemanagementto95Info butsalesdataaresecrettothecompany sowegaveuptheoutsourcingoption CallCenterVice Manager FounderComputer Informationprocessing Ourcallcenterismainlyusedtoprovidecross departmentinformationformanagement outsourcingcallcentermightmaketheinformationprocessinglosingcontrol ExecutiveOfficerBeijing GuangdongMacro Majorconcernsaboutoutsourcing Theiroutsourcingpossibilityhighlydependsonoutsourcers abilitytosatisfytheirconcerns Source Interviews Service oriented GENERICSERVICE AGENERALLYDECLININGSEGMENTConsistsMainlyofPagingServices Genericservice Decliningpagingservicesegment Becauseofstrongsubstitution ofpagingseats 000 Year Pagingservicemarkethasbeengraduallyerodedbywidespreadmobileandinternetcommunicationservicesfulfilledpager smessagefunction butbeingeithermoreeconomical internetcommunication ormoreversatile mobilephone pagingcustomerswilldeclinefrom50millionin1998to20millionin2010Small to medium non scaleablepagingcompaniesarebeingsqueezedoutofbusiness ofcompanies 19982000 20001736 2004500 2010200 Source Interviews GENERICSERVICEDEFINEDASACROSSOFINDUSTRIESANDFUNCTIONS Genericservice Fun