Vision - September/October 2007 - (Page 7) © 2006 Accenture. All rights reserved. Two Paths to High Performance in the Consumer Electronics Industry By Kumu Puri, Accenture Consumer Technology Industry Program Lead The Consumer Electronics Reality Challenge Most experts predict growth in the consumer electronics industry will slow dramatically in the next five years, making it paramount for consumer electronics manufacturers to achieve high performance if they want to thrive both today and beyond. But what exactly do we mean by high performance? And, what do companies have to do to achieve it? As part of our ongoing research on the characteristics of high-performance businesses, Accenture has found that there are really two paths to high performance in the consumer electronics industry as illustrated by two groups that stand out dramatically from the rest of their peers in terms of key financial metrics: • Market definers, or companies that have catapulted past the competition with a hit, iconic product to a point where the product name defines the market • Value players, or organizations that deliver products that differentiate themselves through "total value," which we define as the sum of a quality product, recognized brand and a major point of differentiation (such as a competitive price or service). In analyzing the functional characteristics and capabilities of the organizations in both groups of companies, Accenture determined that market definers and value players actually share a number of common traits that contribute to high performance. For instance, both groups exploit distinctive and relevant positions in the market by adjusting business models to new realities in the marketplace - identifying a hyper growth market and entering the market at the right time. Both are highly adept at using customer insights to drive clearly differentiated products, services and experiences. And, both excel in translating great ideas into sellable products quickly by leveraging the contributions of multiple parties to cut development cost and time. The most visible difference between market definers and value players is that the former tends to emphasize intense innovation and creativity while the latter is expert at leveraging its scale to drive operating efficiency. Accenture is uniquely positioned to help consumer electronics companies address the challenges they face and become a high-performance business. With our Business Transformation Services for High Performance offering, we enact fundamental change in a company's business model and operating structure - not simply discrete process improvements - to enable consumer electronics companies to survive and thrive in their markets. We work with our consumer electronics clients to develop a portfolio strategy that more strongly positions them for growth, greater cost efficiencies, and significantly improved business and performance management. Preparing for Tomorrow While today's market definers and value players are the industry's leaders, their position today is not guaranteed tomorrow. It's entirely possible that another company- even one that's not a consumer electronics company as we know it today - could emerge with an innovative solution or new way of doing business and quickly jump to the head of the pack. Such an occurrence is not unusual in an industry that rewards forward thinking, nimbleness and audacity. That's why even today's high-performance companies in the consumer electronics business must remain on their toes if they want to maintain that designation in the future. To receive Accenture's new white paper on achieving high performance in the consumer electronics industry, please go to accenture.com/ceavision2 http://accenture.com/ceavision2 http://accenture.com/ceavision2
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