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BERR department of Business Enterprise and Regulatory Reform

Case Study: Oxford Instruments PLC on global Value Chains

Oxford Instruments PLC was established in 1959 as a spin-out from Oxford

University and specializes in the design, manufacture and support of high

technology tools and systems for industry, research, education, space, energy,

healthcare, and environment protection. Oxford Instruments have been quick

to exploit the opportunities global value chains offer in terms of access to

new and emerging markets. China is now the fastest growing market for the

company and has seen an average annual sales growth of 50%. In fact, Oxford

Instrument products can now be found in every Chinese province. Starting

with a representative office in Beijing in 1997 the company now has offices

in Beijing, Guangzhou, Chengdu and Shanghai. Oxford Instruments believes

another important product it exports to China is co-operation and has set up

unit-laboratories with many universities, institutes and factories. In this way the

company is playing an important role in the growth of China, and in strengthening

the relationship between the peoples of China and the UK.

Charles Holroyd, Executive Director of Oxford Instruments comments We believe

firmly that our future growth will come in partnership with the rapid

development

of emerging economies and markets, and we will be vigorous in changing the

ways in which we work to ensure that we can satisfy fully their requirements.

Production is mainly carried out in the UK, with some in EC partner countries

and the USA. Oxford Instruments have also set up a WFOE (Wholly Foreign

Owned Enterprise) in Shanghai that assembles some product for local and export

markets. In addition, this facility serves as a base for customer support activities

and as a source for local procurement to supply the companys UK factories.

Regarding other emerging markets, Charles Holroyd adds The BRIC (Brazil,

Russia, India and China) markets have very high visibility and are important

targets for Oxford Instruments plc. In addition to China where we are approaching

100 personnel (out of a total Group headcount of some 1600), we have recruited

our own people in India and Russia and intend to increase our presence and grow

strongly in those markets.

In 2008, Oxford Instruments won the KMPG 2008 Business Award for UK

Exporter of the Year for demonstrating the utmost energy, novelty, patience and

persistence, in the field of exports from the UK to China during the year.

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Case Study Prodrive Ltd on global chain values and

Technology Exploitation

Prodrive is one of the worlds largest motorsport and vehicle technology

businesses with annual revenues exceeding 100m. While its roots are in

motorsport, the company has evolved since its creation in 1984 into a business

that has differentiated its offering through developing a specialisation in the

development of advanced technology for road vehicles. Its business model

is based upon partnering with customers thereby creating strong linkages

between the respective value chains.

Today Prodrive has broadened its areas of business still further, transferring

its skills into sectors including aerospace, marine and defence. These include

the development of new technologies for the reduction of carbon emissions in

everything from cars to domestic heating systems. Prodrive also has its own

manufacturing facilities and supplies components for everything from Formula

One cars to space satellites and high performance winches for racing yachts.

Despite this diversification into new markets, Prodrive has continued to

focus on its core competencies and has essentially broadened its offering to

exploit global opportunities through linkages to its customers value chains.

Prodrive will often embed its own value chain in their customers value system

by offering a turnkey solution that can include intangible activities such as

design, all the way through to prototype builds and testing. One of the best

examples of this is the relationship with Subaru. For nearly 19 years, Prodrive

has worked closely with the Japanese car manufacturer to develop and run

the Subaru World Rally Team. Over the years, this partnership has grown to

include road car projects where Prodrive has worked with Subaru to develop a

number of limited edition performance cars to enhance the brand.

Prodrive operates on a global scale and offers mainstream automotive

manufacturers an opportunity to differentiate their own products through

limited editions that employ Prodrive technology. A recent example of this

is the Alfa Romeo Brera S launched in May 2008. Tony Butcher, managing

director of Prodrives automotive technology business, said: We were able to

bring our skills in chassis, engine and suspension development to bear on this

classic Italian sports car. Alfa saw so much value in the work we were carrying

out for them that the marketing of the car was based around our involvement,

with the products proposition Best of Italy, Best of Britainemphasizing the

international cooperative nature of the project.