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VIEWS: 57 PAGES: 25

									CONFIDENTIAL




The way forward for GT




Summary of review
December 5, 2006
Content




          Product and customer segment overview

          Deep dive selected segments

          Company profiles potential partners

          The way forward




                                                  1
                                                                                                                                     INITIAL HYPOTHESIS
Possible product and customer/partner segments
          Increased
           cost and                                                                                                                              Attractive
            quality
                                                                                                                                                 Unattractive
                                                                                                           5
                                                                                                                                             x
                                                                                                                                                 Assessed in
                        Hi-tech,                                                                           • For special
                         niche                                                     • For special               situations, e.g
                                                                                                                                                 further detail
                        version                                                        situations, e.g.,
                                                                                                               remote control
                                                                                       mine sweeping
                                                                                                           •   Tailor made
                                                                                                               solution


                     Flexible ready
                      made model                               • Too               • Too                   • Difficult to meet
                      with multiple                                sophisticated       sophisticated           customer needs
   Product              features                                   and expensive       and                     with one model
   definition                                                                          expensive?          •   Scale needed
                                                               2                   3                       4

                     Basic model
                     with selected       • Too expensive • Possible                • For aid/              • Affordable
                        options                                    solution with       emergency use           solution for
                                                                   low cost        •   For specific            mid-tier
                                                                   manufacturing       projects
                                         1

                     Self-assembly       • Large segment, • Local manu-            • For aid-projects • Want ready-
                     kit with critical       but low income        facturing       • For                made
                                         •                     •   Use of local
                          parts              Good “value for       companies         development      • An alternative
                                             money”                as agents/          programs                for DIY-
                                                                   franchisees                                 segment?
                                                Local        High-end players      International aid Industrial, western
                                           manufacturers/       developing         organization e.g.,     users, e.g.,
                                         Individual users in     countries          Red Cross, UN     construction, forestry
                                             developing      (companies, local                           work, military
                                              countries         authorities)                                                     Increased
                                                                                                                                   buying
                                                                         Customer / Partner                                        power

Source: Interviews                                                                                                                                            2
                                                                                                                                 INITIAL HYPOTHESIS
Possible product and customer/partner segments
          Increased
           cost and                                                                                                                          Attractive
            quality
                                                                                                                                             Unattractive
                                                                                                         5. “The
                                                                                                          ultimate                       x
                                                                                                                                             Assessed in
                        Hi-tech,
                         niche                                                                         transporter”                          further detail
                        version




                     Flexible ready
                      made model
                      with multiple
   Product              features
   definition
                                                             2. “The low- 3. “The aid-to-  4. “The
                                                                  cost           aid      multipurpose
                     Basic model
                                                              professional transporter” transporter”
                     with selected
                        options                               transporter”



                                                   1. “The transporter-in-a-box”
                     Self-assembly
                     kit with critical
                          parts



                                                Local        High-end players    International aid Industrial, western
                                           manufacturers/       developing       organization e.g.,     users, e.g.,
                                         Individual users in     countries        Red Cross, UN     construction, forestry
                                             developing      (companies, local                         work, military
                                              countries         authorities)                                                 Increased
                                                                                                                               buying
                                                                     Customer / Partner                                        power

Source: Interviews                                                                                                                                        3
Most attractive product/customer mix-combinations
                                                                                                                     Most attractive

                                2. “The low-cost
           1. “The transporter-    professionalized 3. “The aid-to-aid      4. “The multipurpose 5. “The ultimate
              in-a-box”            transporter”         transporter”           transporter”         transporter”
Customer • Local 3rd world      • Local companies • International aid       • Construction        • Construction
             manufacturers      • Local 3 rd world      organizations,      • Forestry industry   • Forestry industry
             “franchisees”        manufacturers         e.g., UN, Red                             • Military
           • Local farmers/       building from ready Cross (can also act
             project developers
             in developing        made chassis          as door openers for
             countries          • Local authorities in number 1 and/or 2)
           • Aid agencies with    developing
             local projects       countries
Core       • Kit with patented  • Simple, robust, low • A vehicle with      • Flexible and robust • Flexible and robust
technology   joints               cost tractor. Either  valuable re-use       vehicle               vehicle
           • Assembly manual      sold as basic         properties                                • Customer tailored
             for illiterate       version or as                                                     solution
             (ref. IKEA)          chassis

Example of    • Water pump           • Water pump              • Water pump             • Water pump        • Water pump
add-on        • Electricity          • Electricity             • Electricity            • Electricity       • Electricity
accessories       generator              generator                 generator              generator             generator
and           • Grinder              • Grinder                 • Grinder                • Forestry tools    •   Remote control
services      • Biofuel engine       • Biofuel engine          • Biofuel engine         • Spare parts       •   Mine sweeper
              • Other agricultural   • Other agricultural                                                   •   Forestry tools
                  equipment              equipment                                                          •   Spare parts

Production    • Kit made at “one”    • Chassis made at         • Produced at one        • Produced at one   • Produced at one
system            central plant in       “one” central plant       global plant           global plant          global plant,
                  low-cost country   •   Local assembly        •   Also potentially                             potentially with
              •   Local assembly         (ref. production          entry point for #1                           local modifications
                                         system for buses)         and #2                                       add-ons
                                                                                                                                  4
Content




          Product and customer segment overview

          Deep dive selected segments

          Company profiles potential partners

          The way forward




                                                  5
1. “The transporter-in-a-box”


 Product              • Minimum kit with critical parts enabling local manufactures and farmers to build their
                        own vehicle from scratch, using locally available parts where possible (used cars etc.)
                      • Easy assembly manual for illiterate (ref. IKEA) describing functions and how to
                        assemble the tractor
                      • Possibility to sell optional add-on kits, e.g., water pump, electricity generator, grinder

 Value to             •   Advanced vehicle built from cheap parts
 customer             •   High flexibility in choosing parts and final solutions; Easy to repair
                      •   For franchisees: A basis for building a local business
                      •   For society: Lower cost of rural development
                      •   For countries in rapid development (e.g., Mozambique), allow development prior
                          to development of road infrastructure, “The mobile phone of road infrastructure”


 Ability to pay vs.   • Partly a very low income segment, requiring all costs to be kept at a minimum
 production cost      • However, a mid-segment also exist (e.g. plantation owners etc.)
                      • Kit with parts to be produced as cheaply as possible, ideally at high scale in low-cost
                          country (India?)



 Potential            • Global agricultural equipment / automotive manufacturer seeking exposure to
 partners               developing markets, e.g., Tata Motors
                      • A network of local franchisees
                      • Local players in developing countries, e.g., partnership enabled through NORAD’s
                        MatchMaking Program

Source: Interviews                                                                                               6
Key challenges: “The transporter-in-a-box”



   Scale
   • Currently relatively high share of subsistent
     farmers with limited transportation needs in
     African developing countries
   • Potentially large market in the future, with
     higher share of cash crop farmers                        Key challenges
                                                              • Understand current transportation
   Competition                                                  needs of rural population
   • Old trucks, owned and operated by individuals            • End users ability to pay given very
     at low cost                                                low average income (~1 USD/day)
   • Low reliability and quality, but sufficient for most     • Convince international aid
     needs                                                      organizations of product quality and
                                                                concept to gain partnership
   Possible go-to-market approach                             Or…….
   • Sale of self-assembly kits through international         • Sign-up local franchisees
     aid organizations to gain market access
   • Local authorities and companies targeted when
     product is know in the market
   Or….                                                     Recommended focus:
   • Local manufacturers and individual users in a          In parallell focus on aid organizations
     franchise system                                       and potential franchisees in top 5 countries – Countries
                                                            with weak infrastructure, but in commercialization
                                                            stage (e.g Mozambique)


Source: Interviews                                                                                                     7
Average income in African developing countries typically
~1 USD/day
Private consumption per head; USD/year


               600


                                                              Kenya
               500


               400

                                                              Nigeria
               300                                            Angola


               200


               100


                 0
                 2002    2003            2004   2005       2006



 Source: EIU                                                            8
2. “The low-cost professionalized transporter”

                      • Simple, robust yet cheap vehicle targeted at local companies and authorities, without
 Product                will to build the product from scratch
                      • Optional add-ons tailored to customers needs, e.g., water pump, electricity
                        generator, grinder, biofuel engine
                      • Either sold as ready made or as chassis for local completion (lower cost, value to
                        local partner, possible tailoring)

 Value to             •   Advanced yet cheap vehicle
 customer             •   Easy maintenance
                      •   High flexibility in choosing add-ons and final solution
                      •   Possibility for local assembly
                      •   For chassis buyer: A basis for building a local business


 Ability to pay vs.   • Requires will from local companies / government to invest in this type of equipment
 production cost




 Potential            • Global agricultural equipment / automotive manufacturer seeking exposure to
 partners               developing markets, e.g., Tata Motors
                      • Local players in developing countries, e.g., partnership enabled through NORAD’s
                        MatchMaking Program
                      • Export/import agencies
                      • Local manufacturers and individual users in a franchise system(?)
Source: Interviews                                                                                            9
Example: Optimum conditions for biofuel production in developing
countries – “The low-cost professionalized transporter” can solve
transportation issues and accelerate growth




   Optimum
   temperature
   for sugar cane
   cultivation from
   25 to 35C




                                                 Example Brazil alone – Potential to
                                                 quadruple global bioethanol production

Source: Centro de Estudos Avançados em Economia Aplicada, H. Ruete, IEA meeting 2005      10
Example: Potential for significant bioethanol production in Mozambique at
competitive cost, lack of infrastructure limiting development



  Mozambique                                                              Malaysia
                                                                                                       Feedstock cost for
   Bioethanol volumes                  Production cost 2005               Production volume            biodiesel production
   Billion gal                         USD/gal                            Billion gal                  USD/ton

   Potential in
                             35.0       Mozambique           ~0.8-1.0                                  Rapeseed
   Mozambique                                                             Malaysia palm oil*     5.7                      660
                                                                                                       oil EU
   EU mandate        3.3                Europe                  1.89                                   Palm oil
                                                                          Global biodiesel*  1.1                       390
                                                                                                       Malaysia
   Domestic fuel consumption – 2005                                       Domestic fuel consumption – 2005**
   Billion gallon                                         1.60            Billion gal
                                                    Production cost
   Mozambique 0.1                                    of gasoline at       Malaysia        4.4
                                                      60 USD/bbl




      * Assuming same specific density, given existing mandates in 2010
     ** Includes gasoline and diesel
Source: FAOSTAT; NREL; SRI; Oil world                                                                                         11
Key challenges: “The low-cost professionalized transporter”




   Scale
   • Chassis-approach allows for success even with
     moderate scale

   Competition
   • “New” trucks, tractors and agricultural          Key challenges
     equipment from well-known brands – Possibility   • Understand needs of local authorities
     to compete on price, but need to convince user     and companies
     of product qualities                             • Identify and successfully enter
   • Third hand trucks/combi-vans                       partnership with low cost manufacturer
                                                        and distributors with access to
   Possible go-to-market approach                       customers
   • Partner with low cost manufacturer and
     distributor to enable market access and low
     cost production
   • Sell chassis to local players thereby creating
     local pull and a broader distribution network




Source: Interviews                                                                               12
3. “The aid-to-aid transporter”


 Product              • Robust and flexible vehicle targeted at international aid organizations, with valuable
                        re-use properties if left behind to local inhabitants
                      • Selected add-ons installed on original vehicle, to maintain flexibility of use, e.g.,
                        water pump, electricity generator
                      • Optional advanced add-ons for specific purposes, e.g., biofuel engine, grinder

 Value to             •   Robust and flexible vehicle with good terrain qualities
 customer             •   Easy maintenance, flexibility to use local parts for repairs
                      •   Makes sense to “Leave behind”
                      •   High flexibility in choosing add-ons and final solution



 Ability to pay vs.   • High will to pay for right solution, however potential customers need to be convinced
 production cost        of product qualities
                      • Potentially a door opener for later sale of “The transporter-in-a-box” and “The low-
                        cost-village tractor”



 Potential            • International aid organizations
 partners             • Global agricultural equipment/automotive manufacturer seeking exposure to
                          developing markets, e.g., John Deere (already has a Gator model)



Source: Interviews                                                                                              13
Key challenges: “The aid-to-aid transporter”



   Scale
   • Potential large scale, if international aid
     organizations are convinced of product and
     concept
                                                          Key challenges
   Competition
                                                          • Gain access to aid organizations and
   • High cost brands, e.g., Toyota Land Cruisers           convince them of product qualities to
   • Second hand military vehicles                          build portfolio of success stories
   • Focus on well known solutions and – in               • Convince international aid organizations
     emergency situations – availability of vehicle
                                                            to try new, innovative solutions over well
     within short timeframe (~24 h)
                                                            known products
                                                          • Ability to deliver large qualities of product
   Possible go-to-market approach
                                                            in short time frame
   • Initially target smaller aid organizations and       • Team up with established chain (e.g.
     specific projects, e.g., Flykningehjelpen, Kirkens
                                                            Toyota) and offer GT to expand their
     Nødhjelp, to prove product qualities and gain
                                                            product range
     recommendations
   • Partner with low cost production company
   • Approach larger, international aid organizations
     like UN when the product is a proven success
     and production ready to be scaled up



Source: Interviews                                                                                          14
4. “The multipurpose transporter”


 Product              • Robust and flexible vehicle target at western customers with high quality demands,
                        but limited need for costly special solutions
                      • Selected basic add-on options available, e.g., water pump, electricity generator,
                        forestry tools
                      • Additional supply of spare parts and after-sale service

 Value to             • Robust and flexible vehicle for high demanding customers
 customer             • Most common add-on options easily available




 Ability to pay vs.   • Willing to pay for high quality product, but not for add-ons/unnecessary advanced
 production cost       technology




 Potential            • Global construction equipment / automotive manufacturer, e.g., Terex
 partners




Source: Interviews                                                                                           15
Key challenges: “The multipurpose transporter”




   Scale
   • A flexible solution can cover multiple user
     needs and segments with same base model
   • Niche product with relatively limited scale
     potential

   Competition                                       Key challenges
   • High cost agricultural or construction          • Build “one model that fits all” without
     equipment, often with more advanced, but less     making it to costly
     flexible solutions                              • Successfully partnering with global
                                                       company to reach customers and support
   Possible go-to-market approach                      product with well known brand
   • Develop prototypes in collaboration with
     selected local customers, e.g., Kran
     Entreprenøren
   • Partner with global agricultural equipment/
     automotive manufacturer to enable production
     and gain access to niche customers




Source: Interviews                                                                               16
5. “The ultimate transporter”


 Product              • Technologically advanced and robust vehicle target at western customers with high
                        demands and special needs, e.g., construction industry, forestry industry, military
                      • Custom made vehicle developed in collaboration with customer
                      • Advanced options for specific purposes available or tailor-made, e.g., remote control,
                        mine sweeping, in addition to basic add-on options
                      • Additional supply of spare parts and after-sale service

 Value to             • Advanced, robust and flexible vehicle
 customer             • High flexibility in choosing final solution




 Ability to pay vs.   • High will to pay for right solution
 production cost      • Solution developed in collaboration with final customer




 Potential            • Global construction equipment / automotive manufacturer, e.g., Caterpillar
 partners             • Military
                      • UN


Source: Interviews                                                                                         17
Key challenges: “The ultimate transporter”




   Scale
   • Limited volume production, but potentially high
     margin product

   Competition
   • High cost, custom build or tailored equipment
                                                       Key challenges
   • Specialized construction, automotive or
     defense equipment providers
                                                       • Convince users of product qualities and
                                                         ability to develop tailored solutions to that
                                                         will meet their needs
   Possible go-to-market approach
                                                       • Develop and build customer tailored
   • Close partnership with potential customers,
                                                         products at low cost
     designing and developing tailored solutions
                                                       • Ability to re-use learning when developing
   • Promote flexibility and tailor made solutions
                                                         new solutions
     towards new customers, rather than pre-made
     products, e.g., “We can make the perfect
     product for your needs”
   • Identifying production partner that can build
     tailor made solutions from base model at low
     cost




Source: Interviews                                                                                       18
Content




          Product and customer segment overview

          Deep dive selected segments

          Company profiles potential partners

          The way forward




                                                  19
Company profiles potential partners




                         • John Deere
                         • Valtra (AGCO Corporation)
                         • CNH
                         • Toyota
                         • Terex
                         • Caterpillar
                         • Volvo
                         • Hitachi
                         • Tata Motors
                         • Kverneland Group




                                                       20
Content




          Product and customer segment overview

          Deep dive selected segments

          Company profiles potential partners

          The way forward




                                                  21
Assessment of match/ability to acheive traction                        Large segment

Summary of hypothesis                                                  Sizeable segment


    Ability to
    achieve
    traction




                                                   “The aid-to-aid
                                                     transporter”
                                                 • Special projects    3rd world
                                                • Some emergency      franchisees:
                                                       situations        • Kit
                                          4. “The                     • Chassis
                                        multipurpose                    5. “The ultimate
                                        transporter”                        transporter”
                                                                        • For niche use
                                                                       • For rental firms

                                                            1. “The
                                                     transporter-in-a-box”
                                                        • Local farmers



                                                                       Match of needs
                                                                       (GT offering vs.
                                                                       customer needs)
                                                                                            22
Recommended next steps




          1. Zoom in on max 3 customer/product segments to pursue in
             phase 1 – base selection on “match”/ability to achieve traction
             assessment

          2. Make targeted presentation material for 3 prioritized clusters
             and decide on top 3 partners in each category to reach out to

          3. As appropriate:
                  • Arrange for funding/partner arrangement
                  • Leverage World-Bank link
                  • Seek publicity to create “competition among partners”
          4. Do road show to 3 x 3; Start with top priority category




                                                                               23
Suggested top 3 segments and potential partners



                          Potential partners

      “The transporter-   • 3rd world manufacturers/franchisees, e.g. in Mozambique
      in-a-box”             – link through NORAD’s MatchMaking Program?
                          • Tata Motors, or other kit/chassis producer respecting IP
                          • Danfoss (?)


      “The low cost       • John Deere
      professional        • Valtra (AGCO Corporation); CNH
      transporter”        • 3rd world manufacturers/franchisees, e.g. in Mozambique –
                            link through NORAD’s MatchMaking Program?
                          • Toyota European Aid Centre (Portugal)

      “The ultimate       • Caterpillar
      transporter”        • John Deere
                          • Terex
                          • Rental company, e.g. HSS, Hertz
                          • Norwegian Armed Forces


                                                                                       24

								
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