Building value….. ….The SWAT analysis ValueMathics Building value….. ….The SWAT analysis

CUSTOMER VALUES VALUE CHAIN The SWAT analysis is a new generation balanced scorecard that uses elements of The Magic Pallet to analyse the potential of a firm or a sector in a given market segment. It is a confrontation matrix of perceived customer benefits and sacrifices –HORIZONTAL AXE with value chain activities -VERTICAL AXE- of a firm. CUSTOMER VALUES PRODUCT SERVICE ACCESS COST SPEED IMAGE TECHNOLOGY 2.6 4.6 2.3 2.2 0.6 4.2 2.8 PRODUCTION 4.5 2.7 4.1 4.3 2.2 3.8 3.6 VALUE CHAIN LOGISTICS -1.8 1.9 2.3 2.2 2.1 -3.0 0.9 MARKETING -3.8 -4.6 -1.8 -3.7 -4.5 -2.1 -3.4 SUPPORT 0.7 -1.0 1.7 -1.0 -4.2 1.1 -0.4 0.4 0.7 1.7 0.8 -0.8 0.8

“SWAT” stands for….. Sources Winners Alliances Trends Cost of means, like technical and commercial people, manpower, money, machines and raw materials “Minds, Money, Manpower, Machines, Materials” Winners Core competencies of the firm which create competitive advantages in the value system – “Technology, Production, Logistics, Marketing, Support” Alliances Forward or backward alliances with technology providers, marketing companies, logistical service providers and others Trends General direction of changes in customer values, like product characteristics, process requirements, delivery and stocking, desired image and service requirements as well as CSR issues – “Product, Access, Speed, Image, Service”

TECHNOLOGY PRODUCTION VALUE CHAIN LOGISTICS MARKETING SUPPORT On the vertical axe, we list the value activities of a firm -the source for competitive advantages –together they constitute the value chain of a firm. These are the drivers for value creation PRODUCTION VALUE CHAIN LOGISTICS MARKETING SUPPORT

PRODUCT SERVICE ACCESS SPEED IMAGE TECHNOLOGY PRODUCTION VALUE CHAIN On the horizontal axe, we list the perceived customer benefits - required product, process and vendor’s benefits in a given buyer’s segment. PRODUCTION VALUE CHAIN LOGISTICS MARKETING SUPPORT

CUSTOMER VALUES VALUE CHAIN PRODUCT SERVICE ACCESS COST SPEED IMAGE TECHNOLOGY COST – “Total Cost of Ownership” is the column for the perceived sacrifices of the customer Cost of money Cost of change Cost of time Cost of purchasing risk Cost of conflict Together, benefits and sacrifices constitute the CUSTOMER VALUES PRODUCTION VALUE CHAIN LOGISTICS MARKETING SUPPORT

CUSTOMER VALUES VALUE CHAIN Value chain performance is now confronted with the customer values in a certain market segment. Hence, the SWAT analysis is an assessment of the product market combination, not a company audit. CUSTOMER VALUES PRODUCT SERVICE ACCESS COST SPEED IMAGE TECHNOLOGY PRODUCTION VALUE CHAIN LOGISTICS MARKETING SUPPORT

CUSTOMER VALUES VALUE CHAIN The crossroads of rows and colums give us the relevant issues in supply and demand that need to be assessed in the SWAT analysis PRODUCT SERVICE ACCESS COST SPEED IMAGE TECHNOLOGY PRODUCT DEVELOPMENT MATERIALS R&D PROCESS TIME TO PRODUCTION TECHNICAL REPUTATION CO-DESIGN ACTIVITIES SUPPLIERS FORMULATION PRODUCTION PRODUCTION TECHNIQUES PRODUCTION PROCESSES SPEED WINDOWS HOUSEKEEPING AND OHS PRODUCTION FLEXIBILITY LABOR COST PRODUCTIVITY VALUE CHAIN LOGISTICS QUALIT OF LOGISTICS PACKAGING STORAGE SWIFTNESS OF LOGISTICS APPEARANCE OF LSP SPECIAL DELIVERIES LOGISTICAL COSTS MARKETING BRANDING PACKING LEGAL AND SALES TERMS RESPONSE TIME ON RFQ WEBSITE PRINTED CONVENIENCE OF ORDERING SALES TERMS DISCOUNTS SUPPORT MAINTENANCE INFORMATION GUARANTEE DATA SHEETS COMPLAINT HANDLING COMPETENCE OF PERSONNEL PERSONAL SERVICES COST OF SERVICE

SWAT - methodology Gather 3-5 persons; 3=minimum, 5 = maximum one/three persons from the firm; one/two from TPO, client or supplier; one independent expert/facilitator Fill in the SWAT analysis individually without consultation with other persons 5 or 3 or 1 or -1 or -3 or -5 for scroes per column Use each number only once, leave blank if no correlation Add up individual scores for total group results Add up columns and rows for first assessment Circle areas of high scores green = USP/CORE COMPETENCIES Circle areas of low scores red= CHALLENGES/ALLIANCES Define knock-out criteria and desirable areas per sector/market Decide on go or no-go for exports Define corrective actions in the red areas Construct the business model around the green areas.

EXAMPLE 5 3 -5 -1 -3 PRODUCT DESIGN TECHNOLOGY PRODUCTION LOGISTICS MD-2 variety, oval shape, no spines exept at the leaf tip, clear yellowish colour inside,sweet taste, hard green leaves, equal patches Is the MD-2 variety available in the country ? Are there certified test faciltities to guarantee the quality of the pineapple? Can ripeness be tested to get the product at the right ripeness on the shelf ? TECHNOLOGY 5 Is the growing and harvesting process adequate to preserve the unique characteristics of the pineapple? Does the region have the proper temperature range for this variety? PRODUCTION 3 How are post harvest conditions? Is transport and warehousing adequate for the chill sensitiveness of pineapples? Are transit times suitable for the riping period of the pineapple ? LOGISTICS -5 Does the company communicate the unique properties of this variety to its prospects or custiomers ? Is there appropriate information on the specifications in brochures or on a website ? MARKETING -1 Does the company provide product information for consumers –on labels or leaflets. Are there suggestions as how to serve the pineapple or ideas for recipes ? SUPPORT -3

CUSTOMER VALUES VALUE CHAIN This is an example of an individual SWAT sheet. You start filling the numbers column by column. The question at each crossroad is “To what extent does the value chain of the firm meet the specific customer values of the buyer ? In each column, numbers can be used only once. CUSTOMER VALUES PRODUCT SERVICE ACCESS COST SPEED IMAGE TECHNOLOGY 5 1 1 1 -3 1 PRODUCTION 3 5 3 5 3 5 VALUE CHAIN LOGISTICS -5 -1 -1 3 1 3 MARKETING -1 -3 -5 -3 5 -3 SUPPORT -3 3 -3 -5 -1 -1

CUSTOMER VALUES VALUE CHAIN This is an example of a consolidated SWAT sheet. Individual results are added up and divided by the number of participants First analysis is whether the numbers close to zero are the result of consensus or opposite opinions in the group. If all members have interpreted the respective box in the same way, but still have different opinions, the scores are left untouched. CUSTOMER VALUES PRODUCT SERVICE ACCESS COST SPEED IMAGE TECHNOLOGY 2.6 4.6 2.3 2.2 0.6 4.2 2.8 PRODUCTION 4.5 2.7 4.1 4.3 2.2 3.8 3.6 VALUE CHAIN LOGISTICS -1.8 1.9 2.3 2.2 2.1 -3.0 0.9 MARKETING -3.8 -4.6 -1.8 -3.7 -4.5 -2.1 -3.4 SUPPORT 0.7 -1.0 1.7 -1.0 -4.2 1.1 -0.4 0.4 0.7 1.7 0.8 -0.8 0.8

CUSTOMER VALUES VALUE CHAIN The unique asset of the SWAT analysis is its detailed analysis of “focus” -green areas- and “challenge”–red areas- of a firm. These are the basis for the selection of the right product/market combination, the unique selling proposition and corrective actions to be taken. CUSTOMER VALUES PRODUCT SERVICE ACCESS COST SPEED IMAGE TECHNOLOGY 2.6 4.6 2.3 2.2 0.6 4.2 2.8 PRODUCTION 4.5 2.7 4.1 4.3 2.2 3.8 3.6 VALUE CHAIN LOGISTICS -1.8 1.9 2.3 2.2 2.1 -3.0 0.9 MARKETING -3.8 -4.6 -1.8 -3.7 -4.5 -2.1 -3.4 SUPPORT 0.7 -1.0 1.7 -1.0 -4.2 1.1 -0.4 0.4 0.7 1.7 0.8 -0.8 0.8

SWAT – in a nutshell The SWAT analysis uses elements of The Magic Pallet from supply side -value chain- and demand side -customer values Core analysis is a firm’s capability to make a competitive value proposition to a targeted market segment Outcome of the analysis give tangible –not subjective- strengths and weaknesses –focus and challenge This outcome is the basis for An appropriate product/market combination A unique selling proposition A market entry strategy Multiple SWAT’s are the most reliable input for sector analyses and sector strategies