2. Table of Contents
Economic Update
Industry Players – Stock & Brand Status
Social Web & Networks
Drivers & Benefits
Social Transformation Strategies
Social Stack & Products
Appendix
Hype Curve Demystified, Top 100 Brands
Social – Use Cases
3. Economic
Update
• PIIGS lead by Greece, It’s a question of when
• Default is not the concern, it’s the banks in ??
• Greece: CCC, Portugal : BBB-
• Italy: AA-, Spain: AA+
• Ireland: BBB
• India: BBB - ???, China: A+
• Gold: Stock vs IR
Source: Bmi, Seeking alpha
4. Economic
China’s
Update - Asia
Private Rescued Bailed Out
Debt By Govt. Double Dip in US
2008 2008 Could further Fuel This
Govt. Rescue Bail Out ???
Debt 2011
2011
• Gold is money and nothing else – J.P.Morgan Australia's Major Bank
• Australian Banks Too Levered and Too Exposed
• Housing Debt to GDP Ratio = 75%, H.Mkt Could Collapse
• AUD vs China (Commodity Prices)
• Stock Market Crash - ??
Source: BMII
5. Industry
Status Check
Dotcom & Sept 11 Impact
GFC
Operating Margin vs Revenue in USD
Name Rev/Emp. (USD)
35.00%
Accenture 103,587 Infosys; 29.13B
IBM 234,024 30.00%
Infosys 45,223 TCS, 44.45B
25.00%
Wipro Tech 43,508
Operating Margins %
Cognizant; 23.65B
TCS 41,328 20.00%
Cognizant 38,799 15.00%
Wipro Tech;
24.19B IBM; 206.02B
10.00%
Accenture; 37.6B
5.00%
0.00%
-20.00 0.00 20.00 40.00 60.00 80.00 100.00 120.00
Revenue in USD
Source: Google Finance, Reuters Size of Bubble Represents Market Cap.
6. Industry
Status Check
Price Per Earnings Beta
22.09 1.8
21.08 1.17
18.17 1.09
19.07
0.71
14.05
0.76
17.15
10 12 14 16 18 20 22 24 0.6 0.8 1 1.2 1.4 1.6 1.8 2
Accenture IBM Congnizant Infosys Wipro Tech TCS Accenture IBM Congnizant Infosys Wipro Tech
Industry Sector Industry Sector
P/E (Consulting) 16.44 17.74 Beta (Consulting) 0.76 1.13
P/E 30.01 28.1 Beta 0.84 0.97
• Accenture and IBM are safer and rewarding
Source: Google Finance
7. Industry Status
Business Partners
IBM
Dotcom & Sept 11 Impact
CISCO
Operating Margin vs Revenue in USD
50.0%
45.0%
ORACLE, 141.0 MSFT, 205.5
40.0%
35.0%
Infosys; 29.1
30.0%
25.0%
SAP, 59.4
20.0%
IBM; 206.0
CISCO, 81.7
15.0%
10.0% HP, 44.1
Accenture; 37.6
5.0%
0.0%
Size of Bubble
-20.00 0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 Represents Market Cap.
Source: Google Finance, Reuters
8. Industry
Status Check ROTA MAP
Dividend Gives a Good View of Business Strategy
Net Profit Margin
Accenture
Capacity Constraint
High
IBM Capital Intensive (H), Fixed
Apple Rising Stars Cost (H), Entry Barriers (H),
Falling Stars Cognizant Product Differentiation
Infosys
Wipro Tech TCS
Microsoft Telstra
P/B
Competitive Constraint
Capital Intensive (L), Fixed Cost (L),
Recovering Firms Entry Barriers (L),
Low Cost Leadership
Cisco Yahoo
HP
Dogs
Low
Qantas
Low P/E High Asset Turnover
Undervalued
Name Accenture IBM Infosys Wipro TCS Cognizant HP Telstra Qantas BHP
P/B > 2.98 (High) 12.34 8.8 5.12 4.57 4.39 7.14 1.29 3.09 0.57 2.95
P/E > 15 (High) 17.15 14.05 19.07 18.17 21.08 22.09 5.32 11.41 13.82 9.09
Source: Google Finance
9. Consulting Business or Management Consulting
• Value Creation
• Proactive, Revenue Side of Business Value Creation
Value Creation • Premium Segment, High Margin • Integrative, Cooperation is Required
• Project Alliance – Win-Win for
Procurement
• Reverse Sell, Game Theory
Strategic
Advisors
Strategic
Buyers Valuation
Quantity/Services
Price = WTP = WTS
Our BATNA is = ?
System Is It Win - Win = ?
Integrators
Sellers Valuation
Operational
Outsourced
Service System
Providers Providers
Price
Implement & Mgmt. Advisory Value Destruction
• Distributive Claiming – Win/Lose is Required
Technical & Domain Consulting • Single Issues (Price)
• Value Destruction • Recent Negotiations – Started, Kashmir Problem
• Cost Side of Business, Commodity
• Price and RFP Driven
Legend Failure Success
10. Consulting
Models
High
Nurse Psychotherapist
Amount of Client Contact
Expert Advisors
Have depth Have depth and breadth
Provide answers Ask great questions
Control Collaborate
Provide Expertise Provide Insight
Analysis Synthesise
Pharmacist Brain Surgeon
Low
Low Degree of Customisation High
Source: Four types of consulting practices (Duboff 2005)
11. Sales
Long Term View
Selling is not about relationships
It's not because relationships no longer
matter rather, what the data suggests is
what matters is the nature of the
relationships.
Challengers win by pushing customers to think
differently, using insight to create constructive
tension in the sale.
Relationship Builders, on the other hand, focus
on relieving tension by giving in to the
customer's every demand.
Where Challengers push customers outside
their comfort zone, Relationship Builders are
focused on being accepted into it. They focus
on building strong personal relationships
across the customer organization, being likable
and generous with their time.
The Relationship Builder adopts a service
mentality. While the Challenger is focused on
customer value, the Relationship Builder is
more concerned with convenience.
At the end of the day, a conversation with a
Relationship Builder is probably professional,
even enjoyable, but it isn't as effective because
it doesn't ultimately help customers make
progress against their goals.
This finding — that Challengers win and
Relationship Builders lose — is one that sales
leaders often find deeply troubling
Source: HBR – Challenger Selling
12. • Accenture is a premium brand (Anderson consulting roots)
Industry • Indian outsourcing companies are commodity players as brands are
associated with cost arbitrage
Status - Brand Spectrum
House
of Endorsed Branded
Subbrands Housed
Brands Brands
Master
No Shadow Co Same Different
Brand as
Connect Endorser Drivers Identity Identity
Driver
Product Product Corporate Corporate Product Corporate
Ease of Operation
Role of Corporate Brand
Infosys
TATA Accenture IBM TATA IBM WIPRO
Accenture T
S
Source : Brand Relationship Spectrum by David Aaker & Erich Joachimsthaler
13. Brand Business or Management Consulting
• Value Creation
• Proactive, Revenue Side of Business
Management • Premium Segment, High Margin
Strategic IBM
Advisors
New
Strategic
Virgin Blue
Reposition Rebrand
Positioning
System
Integrators
Operational
Outsourced
Brand Revitalise
Existing
Service System
Providers Providers
Apple, GE
Implement & Mgmt. Advisory Existing Identity New
Technical & Domain Consulting
• Value Destruction
• Cost Side of Business, Commodity
• Price and RFP Driven
Legend Failure Success
15. Future
Convergence
SO Social
LO MO
Local Mobile
Source: TOP MOBILE INTERNET TRENDS , KPCB, 2011
16. Social Web
Perceptual Map
Future
Collaborative
Social
High
Web
Willingness to Share
Prohibitive
Web Past
Low
Low Ability to Share High Mass Niche
Source: The Social Practice – 2011, Gerd Leonhard, Media Futurist, The Future Agency
17. Social Networks
Evolution
97 2000 2002 2004 2006
Six MiGente Friendster, Flickr, Piczo, Mixi, Windows Live,
Degrees.com Six Degree Closes Skyblog Facebook, Twitter, Mychurch
Hyes, Orkut
2003 2005
99 2001
Linkedin, Youtube,
Live Journal, Cyworld,
Myspace, Xanga,
Blackplanet Ryze
Last.fm, Hi5 Bebo,
Ning,
Yahoo!360
Source: HBR Facebook Platform 2010
18. Social Networks
Perceptual Map
High
High
Twitter
Linkedin
Knowledge Updates
Linkedin
Professional
Twitter Facebook
Low
Low
Facebook
Low Personal High Low Personal Updates High
19. Summary
Drivers
• Customer Service – Establish Credibility, Operationally Efficient
• Brand Awareness - Establish Credibility
• Innovation and Upgrades – Most potential, Simplification and Shorter Development
• Customer Relationship (Loyalty & Incentives ) – loyalty via rebates or vouchers, can reduce the
operational efficiency and simplify the product
Benefits
Before After
• Branded Presence • Branded Presence (revitalisation)
• Short Term Relationships • Long Term Relationships
• Immediate Conversion • Full Customer Life Cycle
• Broadcast Marketing • Conversational Marketing
• Limited Metrics • Broad Metrics across the lifecycle
• One Funnel • Multiple Funnel across the web
Source: Capgemini 4 Trends in Social Media
20. Value Chain
Analysis
Advertise or
Price Distribution Service & Customer
Create Promote Innovation Collaboration
(Retail) (Sales) Support Experience
(Marketing)
Pre Purchase Post Purchase
Purchase
Customers Buying
Aware Consideration Comparison Intent Implement Support Renewal Advocate
Pre Purchase Post Purchase
21. Perceptual Map
Social Footprint
• Mavens – Dell, Coca Cola, Starbucks
High
Selective Mavens
Engagement
Wall Flowers Butterflies
Low
One Channel Many
Source: Enagegementdb.com
22. Case Study - DELL
5 Years of Experiment & Experience
Source: From Campaigns to Community: Building Sustained Community Engagement
23. Perceptual Map
Social Transformation Strategies
Customer Engagement
• Marketing
High
• Sales
• Production
Customer Urgent Enterprise
Engagement Wide • Service
Social Customers
Enterprise Wide
• All Process
Corporate Branding
• HR
• Corporate Communication
Corporate Cost Reduction
Branding Cost Reduction
Low
• Product Development
• Production
• Procurement
Low Competitiveness High • Logistics
Source: Capgemini – Social Business Transformation
24. Strategy
Social Transformation
Financial Growth Strategy Productivity Strategy
Perspective • Increase Customer Volume (new Segments) • Improve Efficiency & Effectiveness
• Increase Share of Customer Wallet
Customer Brand Awareness Products & Services Customer Relationship
Perspective • Improved Awareness • Simplification and Innovative • Improved Intimacy
• Customer Reach • Upgrades and Automation • Customer Loyalty (Less Churn)
• Shorter Development Lifecycle
Internal Communication Governance
Perspective
Learning & Culture & People Technology
Growth • Roll out Social Stack
Perspective
32. Economic
Update
• US has become a services based economy
• Service sector is stable compared to manufacturing during recessions
Source: Seeking alpha
33. Org Structure
5 Models
Centralised
• One department controls all efforts, Consistent, May not be as authentic, e.g. Ford
• 28.8%
Distributed (Decentralised)
• Organic growth, Authentic, Experimental, Not coordinated, e.g. Sun
• 10.8%
Coordinated (Hub and Spoke)
• Sets rules, best practices, procedures, Spreads widely around the org, Takes time, e.g. Red Cross
• 41%
Multiple Hub and Spoke
• Similar to Coordinated but across multiple brands and units, e.g. HP
• 18%
Holistic
• Each employee is empowered, Unlike Organic, employees are organised, e.g. Zappos, Dell
• 1.4%
Source: Rise of Social Commerce, Altimeter Group 2010
34. Social Analytics
Use Cases - Listen
Conversations Facilitate Support
• Share of Voice • Issue Resolution Rate
• Audience Engagement • Resolution Time
• Conversations Reach • Customer Satisfaction Rate
Service Customer
Marketing Sales Innovation Collaboration
& Support Experience
Advocacy Innovation
• Active Advocates • Topic Trends
• Advocate Influence • Sentiment Ratio
• Advocacy Impact • Idea Impact
Source: Altimeter - Social Marketing Analytics: A New Framework for Measuring Results in Social Media
35. Social CRM
Use Cases
1. Social Customer Insights
Service Customer
Marketing Sales Innovation Collaboration
& Support Experience
2. Social 6. Social Sales 9. Social 12. Innovations 14. 17. Seamless
Marketing Insights Support Insights Collaboration Customer
Insights Insights Insights Experience
3. Rapid Social 7. Rapid Social 10. Rapid Social 13. 15. Enterprise 18. VIP
Marketing Sales Response Response Crowdsourced Collaboration Experience
Response R&D
4. Social 8. Proactive 11. Peer-to-Peer 16. Extended
Campaign Social Lead Unpaid Armies Collaboration
Tracking Generation
5. Social Event
Management
Source: Altimeter Group, The 5MS
40. Ratios
ATO vs NPM
2.00
Accenture
1.80
1.60
1.40
Cognizant
Asser Turn Over
1.20
HP Apple
1.00
IBM Infosys
Wipro Tech
0.80
Qantas Microsoft
0.60 Telstra
0.40
0.20
0.00
0 5 10 15 20 25 30 35
Accenture IBM Infosys Wipro Tech Cognizant HP Telstra Microsoft Apple Qantas
Net Profit Margin
Source: - Google Finance
41. Ratios
P/E vs P/B
Name P/B > 2.98 (High) P/E > 15 (High)
Accenture 12.34 17.15
IBM 8.80 14.05
Infosys 5.12 19.07
Wipro Tech 4.57 18.17
TCS 4.39 21.08
Cognizant 7.14 22.09
HP 1.29 5.32
Telstra 3.09 11.41
Qantas 0.57 13.82
Cisco 1.78 13.60
Microsoft 3.78 9.64
Apple 7.23 15.23
Yahoo 1.51 16.19
BHP 2.95 9.09
Source: - Google Finance
