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ICBE Conference
John J Barron
21st April 2016
Competitive Advantage• Who we are/what we do
• Strategic alignment
• Context of competitive advantage
• Competitive advantage - parts
- Strategy Canvas
- NPD
- Accreditations
- Business Development
- Innovation
• Logic
- Capturing value
- Execution
• Is strategic alignment enough?
• All from our perspective (case study)
• Very much SME orientated
• Very much top level
• Based on experience mentoring and big mistakes
Strategy
Formulation
Strategic Alignment
Strategy• Vision
• Objective
• Scope
• Sustainable competitiveadvantage
• Logic
Reagecon Business Model
Leadership(BOD)
&CEO Role
Market/Environment• Customers
• Competitors
• Business Ecosystem
• Market Channels
• Value Proposition
Organisation• People
• Architecture
• Routines
• Culture
• Vision
• Scope
Utilising
installed
R&D
resources
Introduction to Reagecon
Business (2 parts)• Distributor of Scientific Products,
Instruments, Consumables, Chemicals,
Standards (Ireland, some significant good
practice/expertise )
• Develop, manufacture, export Physical and
Chemical Standards
Company• Based in Shannon
• 86 staff
• Office in Shanghai/Germany (LLG)
• Sales in 150 countries
• 6000 sq Metres
• Family owned business
Markets (geographical)• 150 countries
• All continents
Channels• Distributors
-Globals (private label and branded)
- National
- Regional
- Niche
•OEM Value Proposition / Instrument
Manufacturers
Users• Laboratories (mainly non clinical)
• Field/Portable
• Side room
• On line/process (Measurement and Control)
•Anywhere a Scientific Instrument is used
Reagecon Today
See industries later
Largest producer in the world of
Physical and Chemical Standards
Competitive Advantage Strategy Canvas
• 2011-2013
• 2014-2020
• Innovation
• ISO 17025
• ISO Guide 34
• Innovation
• Knowledge
• Value Proposition
• OEM/Private Label
• Innovation
• Capability
• Competence
• Innovation
InnovationBusiness
DevelopmentAccreditationsNew Product
Development
• Aspirational
• Simplified
• Diagnostic &
Analytical
• Confidential
Competitive Advantage (NPD)
INPUTNew Product
Development
OUTPUT• Breadth/depth
• Critical mass
• Momentum
• Knowledge/motivation
(internal)
• Recognition
BENEFITS/LOGIC• One stop shop
• Bigger basket
• More segments
• Perception of size
• Better prices
• More attractive for e-commerce/distributor etc.
• Instrument Manufacturers
• Help clients to sourcePositioning on value chain
SI UNITS
CRM –method validation;
characterisation;
purification; synthesis
SECONDARY STANDARDS – readily available
(method validation/accreditation)
WORKING STANDARDS – readily available
(method validation/accreditation)
PRIMARY STANDARDS -
characterisation; method validation
Reagecon
was here
Reagecon
now here
Accuracy Uncertainty Availability Price
Strand 1: Core Products
New Product Road Map
SI Units
Working Standards
Measurement Hierarchy
The higher the working standard = less
competitors= higher sales price for Reagecon.
Examples
• Buffers
• Density Standards
• PIANO
Generate significant revenue from new products and increase EBIDTA and net profit
Scope (Products Currently Offered)
Reagecon will become and will remain the largest producer of Physical and Chemical Standards
Vision 2011 - 2014
Scope• Electrochemical
- pH, Conductivity, Ions, Redox, Titration
• Physical
- RI, Density, Viscosity, MP, Osmolality, Cryoscope, Turbidity
• Organic
- Total Organic Carbon, Volatile Organic Carbon’s (VOC), Semi Volatile Organic Carbon’s (SVOC),Polycyclic Aromatic Hydrocarbons, Phenolics, Phthalates, Azo Dyes , Oxygenates, Thiols, Pesticides,
Inorganic- Metals, Anions, Total Inorganic Carbon
• Physico-Chemical
- Colour, Spectrophotometry
• Dissolution
- Ready to use/Concentrates
• Petrochemical/Biofuels
- Total Acid Number (TAN), Total Base Number (TBN), Hydrocarbons and Solvent Residues Paraffins, Olefins, Naphthalates, Isoparaffins, Aromatics (PIANO’s), Fatty Acid Methyl Esters (FAME’s) and Fatty Acid Ethyl Esters (FAEE’s)
Scope (Industry Specific)
• Petrochemical
• Environmental
• Beverages
• Food
• Feed
• Pharamceutical
• Pulp & Paper
• Textiles
• Agriculture
• Industrial Manufacturing
Products
Products
Products
What has R&D done to our Product offering
• Made our product range extremely high-tech
• Created detrimental reliance – customers
• Customisation and innovation easily achieved
• Provided Reagecon with product breadth which is critical to
our business model (continuous innovation)
• Product breadth has given us a competitive advantage as a
single source supply
• Increased our speed of response
• Increased Trade sale value of the company with acquisitions
paying 14 – 20 x EBIDTA (higher to us because of locked value)
– market robust
What has R&D done to our Numbers - R&D Funding 2011-2020
Note: Phase 1 – Jan FY11 to April FY14, Phase 2 May FY14 to July FY16 and Phase 3 Aug FY16 to
FY20
0.20.8 1.00.6
0.30.6
1.4
2.3
3.5
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2011-14 2014 -16 2016-20
Eu
ro R
&D
Sp
en
d
Source and Spend of €10.7M on R&D
Tax Credits Enterprise Ireland Reagecon
Investment in R&D drives
performance and creates
the resources required to
continue to develop new
products into the future
What has R&D done to our Numbers - Output
• Core Products
• Food & Feed Standards
• Petrochem & BioFuel Standards
• Drug Standards
Four Strands
1
• Core Products
• Petrochem & Biofuel
• Food & Feed Standards
• Installed R&D resources
Vision 2014 - 2020
R&D Programme 2014-2020
2• Petrochem & Biofuels
• Food & Feed Standards
• Innovation Partnership
Programme
3
• Petrochem & Biofuels
• Food & Feed Standards
• Drug Standards
• Strategic R&D capability
• Utilising installed R&D
• Innovation Partnership
• Strategic Development of
R&D Capabilities
Three Levels
Accreditations - ISO 17025:
• Traceability
• Comparability
• Accuracy
• Precision
• Measurement uncertainty
• Knowledge
• Reproducibility
Correctness, Confidence, Credibility,
Cost reduction
INPUT OUTPUT BENEFITS/LOGIC
ISO 17025:2005 (264T Testing
Accreditation)• pH Buffers
• Conductivity
• Titration
• Brix 0% - 60%
• Refractive Index 1.3331 – 1.6581
• Density 0.65 – 1.03 g/l
• ICP-OES, ICP-MS
• VOC and VOC Internal Standards
• Phenols and Internal Phenol Standards
• Polycyclic Aromatic Hydrocarbons (PAHs) &
Internal PAH Standards
• Colour and Spectrophotometry
• TOC/TIC 500 μg/Kg – 50 mg/Kg
• Melting point
• Pesticides
• Viscosity
• Density 1.03 g/l – 3.1 g/l
• Ion Chromatography Standards
Physical Accreditations to ISO 17025:2005
• Density
• Viscosity
• Mass
• Temperature
• Volume
• Calibration
• Qualification
• Validation
• Control
Fitness for purpose
*
Utilising
installed
R&D
resources
Business Development - Market Research (1)
Output on next slide
• Competitors
- Looked at 70 companies
in detail
- Standards producers
- Instrument manufacturer
- Globals
• Customers - Buying Behaviour
- Specifications
- Trends
- New product development
- New product opportunities
- Regulations (ISO Guide 34)
- Size
- Growth profile
- Keymen
- Location
- Niche
Technologies &
Industries
- Food/beverages
- Spirits
- Shampoos
- Waste water
- Instrument manufacturers
(Hunter lab, Minolta, Tintometer)
Pesticides:
Pollutants of food, soil & water
- GC, GC - MS
- HPLC, HPLC - MS
- Instrument manufacturers
(Shimadzu, Agilent, AB Sciex, Thermo)
Colour
- Establish what are not possible to develop
e.g Explosives
Perclusions
• Products (niches occupied)
• Features, Benefits, Specifications, Pricing
- TOC: ERA, Sievers
- Colour: Tintometer, Pararagon
- Spectrophotometry: Starna, Hellma
Market Research (2) - Output
INPUT OUTPUT
Assess and Quantify:
Market (Size, Growth, Trends, Drivers)
Size • €1 BN/pa
• Available to US (several hundred million)
Growth • 25 - 30% growth
• Innovations Required to compete
Drivers
• Globalisation (comparability)
• More sensitive measuring technologies
• Population expansion (food)
• Regulation (compendia, accreditations,
metrology)
• Medical developments (medical devices)
• Drug discovery
Distributor Pack
All distributors are issued with a pack –which includes the following:
• Letter of Authorisation
• Contract
• Catalogue
• Chapters of Catalogue
• Pricelist
• Discount Structure
• Distributor Award and Rebate Structure
• Introductory Offer
• Corporate video
• Distributor Extranet Portal
• Product Lead Times Guide
• Sales Presenters
• Cross Reference System
• Web based Training Programmes
• Packaging/Bundling
• Metrologist
• Market Research Programme
• Industry Specific Catalogues
Beverages
Beverage Standards follow several recognised International Standard analytical
methods such as:
Density Standards for Wine analysis
• As described by OIV (International Methods for Wine)
Refractive Index measurements
• Sucrose measurements for beer described by AOAC methods
Colour Standards
• Saybolt and Platinum Cobalt measuring scales
Petrochemistry
Our Petrochemical Standards follow recognised International Standard analytical methods such as those
described by ASTM & IP test solutions
• Colour Standards
ASTM and Platinum Cobalt measuring scales
• Density Standards
• Wide range of values required, not only aqueous based products
• Total Acid and Total Base number Standards
• Used as main measurement Standards, as opposed to pH buffers
• Spectrophotometer Standards
• Linearity Standards using Potassium Dichromate 10mg/l to 100mg/l
OEM/Private Label Customers
• List of Products Produced
• Techniques & Instruments Employed
• New Skill Sets & Instruments Recently Commissioned
• Manufacturing Capability
• Small Volume Filling Console
• Purified Water
• Cold Chain Management
• Environmental Containment Facilities
• Accreditation Landscape in Reagecon
• Accreditations
• Regulatory Compliance – WEEE
• Regulatory Compliance – GHS
• Rapid Prototype Design & Production
• Digitised Label Printing System
• Inhouse Printing Press
New Packaging
Packaging has a critical impact on a products quality, aesthetic
value and the user experience.
Reagecon has launched a series of novel new packaging solutions
for high, value added products that includes the following
features;
• Bottles (Glass or plastic) and ampoules
packed in high quality individual tamper proof
boxes.
New Packaging
• Products packed securely using custom made
recyclable foams
• Products more secure from a handling,
shipping and storage perspective.
• Internal space left in the packaging allowing the inclusion of:
-Certificates of Analysis (which will be shipped with
every new product)
-Safety Data Sheets
-Additional Product information–Bundling
(Covered in Michelle Hynes presentation)
• All product bundling flyers have QR codes on them. Once
these codes are scanned the enduser is brought to a page
highlighting the features and benefits of the products in
question.
• QR codes are a trackable, cost effective way to direct mobile
endusers to online content. Using web analytics, and by using
unique codes for different placements, allowing us to gain
some valuable information about how well campaigns are
going, and what works and what doesn't.
Upselling Product Bundling
Market Research
The survey is structured to
provide your feedback on:
• Market Information
• Who they buy from
• What product families
and what they pay.
We can use this data to
assess:
• Value of available
market
• Which competitors are
active
• Package products, offers
and pricing that will
allow us to gain new
business.
Market Feedback
• Research on specific industries
• Products we propose to develop
Market Feedback
Our Distributor Value Proposition
Use the data to
improve
distributor value
proposition
Service Value Proposition
• Service offering across
several key service
indicators.
• Use the data to improve
efficiency, effectiveness
and innovation.
Product Bundling
QR code
Scope for Reagecon – Roadmap for Innovation
Key Enablers for Innovation
The key enablers for innovation in the business are;
• A strategy with innovation at its core and leadership support
for same
• New Product Development - part of the culture
• Science of metrology (company’s core competence) demands
innovation
• Existing cross functional teams and past experience of
innovation labs
• Culture and climate conducive to Innovation
Logic
Logic by which you intend achieving your goals • Why the strategy will work
• Contains the core argument of why the company will succeed
• Until you have an argument of how vision (goals), scope and competitive
advantage can come together in a coherent way you only have a list of
elements not a strategy
• Understanding logic provides employees with the right incentives to
suggest improvements that advance the logic of the company
• Internal Assets /External Environment
• SWOT
• Market
• Ecosystem (PEST)
• Organisational Brand
• Link between organisation and ecosystem
Utilising
installed
R&D
resources
The Ecosystem• Key Point difference between market
focus and customer focus
•Reagecon poor at market focus and
good at customer focus
Features of customer compelled
cultures• Responding to every customer rather
than being selective about customers
one wants
•Little recognition that different
segments require different levels of
service
•Retention of unprofitable customers
who consume disproportionate amounts
of time
•Little attention devoted to future and
potential customer segments
•Lack of focus
•Never saying NO to a customer
Built to learn• All of the elements of organisation must be aligned with
the market
-People
-Architecture
-Routines
-Culture
•Your organisation needs to adapt each of these in
response to market signals
- Such information is best obtained during tough times
Features of Market Focused Cultures• Clear understanding of the brand experience needed to
realise the brand promise
•Detailed and specific knowledge of the employee
behaviours, values and beliefs needed to produce the
brand experience for customers
•Customer brand is tightly connected with the
employment brand to ensure seamless experience for
customers and employees
•Multiple layers used to build culture with an emphasis
on alignment and consistency.
•Consistency promotes:
-Same message
-Reduces the risk of wrong hires
-Prevents imitation
Ecosystem
People
INPUTS
• Organisation - Flat
• Accountability
• Responsibility
Organisational Brand (Execution) (1)
• Efficiency
• Meetings
• How you could conduct
business• Agility
• Speed
• Customer service
• Competitive
advantage• Values
• Norms
• Attitudes
• Behaviour
• Alignment
• Execution
• Communication
• Motivation
• Value Creation
OUTPUT
Architecture
Routines
Culture
• Strategic Job Coverage
• Training
• Compensation
• Career Prospects
BENEFITS/LOGIC
Values
Norms Attitudes
Behaviour
Culture
Selection Promotion
TrainingOrientationWhere does culture
come from?
Symbolic Actions
Vivid ExamplesInvolvement
Rewards
Senior Leadership
•Words
•Actions
•Consistency
Organisational Brand (Execution) (2)
Interest
• Accreditations keep us
honest
Value System – Reagecon i5 System
• Tools from EI
• Differentiate from R&D
• Top down
• Decide how to continue
during crisis
• Clear,
understandable
deliveries
Integrity
Innovation
Intensity
• Persistent training• Exhibition• Exposure
• Accountability, common
goalInvolvement
• Strategic Job
Coverage
• Training
• Compensation
• Career Prospects
• Strategic Job
Coverage
• Training
• Compensation
• Career Prospects
• Organisation – flat
• Accountability
• Responsibility
• Organisation – flat
• Accountability
• Responsibility
• Efficiency
• Meetings
• How you conduct
business
• Efficiency
• Meetings
• How you conduct
business
• Values
• Norms
• Attitudes
• Behaviour
• Values
• Norms
• Attitudes
• Behaviour
People
Architecture
Routines
Culture
• Cross functional teams/knowledge
sharing
• Job specific training, technical
ability, professional and
management development
• Incentive compensation systems
• Internal competitions/promotions
• Cross functional teams/knowledge
sharing
• Job specific training, technical
ability, professional and
management development
• Incentive compensation systems
• Internal competitions/promotions
• Flat hierarchy
• Functional dashboards and
measures to monitor performance
• Clearly defined roles and
responsibilities
• Flat hierarchy
• Functional dashboards and
measures to monitor performance
• Clearly defined roles and
responsibilities
• Efficiency identified as driver for
business incorporating all
operations
• Cross functional project teams,
advanced project planning
techniques
• Performance management
process, Business ethics policy
• Efficiency identified as driver for
business incorporating all
operations
• Cross functional project teams,
advanced project planning
techniques
• Performance management
process, Business ethics policy
• Highly accredited organisation
• Open door policy
• Innovation
• Highly accredited organisation
• Open door policy
• Innovation
PARC aligned to HR Practices
• Market, not competition should occupy the centre of strategic thinking
• Too much time on benchmarking
- Partly agree
- R&D
• Need to understand how to achieve leaps in value
• Need to capture that value in fair proportion
• We have never got full alignment
• Construction industry - 2008
• 2 brief case studies
- Southwest
- Ryanair
Is Strategic Alignment Enough
The Strategy Canvas of Southwest Airlines
Average Airlines
Southwest
Car Transport
• One type of aircraft – brand new/modern jets
• Peripheral airports
• Online booking only
• Flexible labour
Ryanair – Competitive Advantages
Cluster of advantages that were hard to initiate
Ryanair had three other success factors
1. Brilliant execution
2. Emergence of e-commerce
3. Found a new blue ocean market – people who never travelled
Element of luck – applies to every business
Disruptive combination
Now becoming friendly
Best of luck to them
Note: I have only covered competitive advantages we can control
Vision 2020
Strategy• Vision
• Objective
• Scope
• Sustainable competitive advantage
• Logic
Leadership(BOD)
&CEO Role Market/
Environment• Customers
• Competitors
• Business Ecosystem
Organisation• People
• Architecture
• Routines
• Culture
• €50M company
• Largest Player Worldwide
• Knowledge Platform
• International Brand
• Strong Organisational Brand
MAJOR JOBS & VALUE CREATION
*
