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Presented By : Group 6
Akash Vaswani - 04
Bhakti Thakkar - 17
Hiren Bhanushali - 29
Kaustubh Satanekar - 37
Mrityunjay Singh - 48
Nitesh Amin - 57
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Case Facts
DLRF are a medium sized company that manufacture andsupplies electronic funds transfer and point of sale equipment
and system(EFTPOS).
Fortronic was founded 20 years ago in Dunfermline, Scotland.
It initially supplied transaction processing equipment to UK
banks.
It then identified the niche market for EFTPOS system inpetrol industry.
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Contd..
In 1987, the company was acquired by the De La Rue group,which service the banking and financial industries throughout
the world.
The group operates in over 100 countries, including china,
supplying wide range of products and services.
Over the years it has developed new products to support
SMART cards and electronic purse system.
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Organisational Structure
Dunfermline
(Corporate HQ)
UK
Frankfurt
Sales and Services
(Eastern Europe)
Manchester
Support
(UK)
Hartland
Sales and Services
(North America)
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Contd..
De La Rue Group
Security and Print Cash SystemTransaction
System
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Products and Services
EFTPOS products and market to banking and retail
environment contributes substantial part of its turnover
New products like state of art terminals and Pin-pads
incorporating Smart card support
Helped company to enter growth markets like electronic cash
customer loyalty and utilities pre-payment
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Contd..
Developed number of services to complement its products
Offers data gathering and processing options
Includes simple transaction collection to fully managed
payment network
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Product Range
Eclipse TT41
Equinox EP41
F95 Micropos EFTPOS Terminal
F105 electronic Purse Terminal
Tripos internet payment solutions
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Eclipse TT41
Regarded by DLRF as the revolutionary product
Can handle various cards
A powerful and cost effective product
Flexibility
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Equinox EP41
A new generation PIN-Pad
Can handle range of electronic purses
2 ways of verification
In U.K. a common to verify signatures
In Germany verification by PIN
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F95 Micropos EFTPOS Terminal
For first time users
Fully programmable and self install
Flexibility to connect various peripherals
Card transactions at POS
Easy to use
Speeds up the process of payment
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F105 electronic Purse Terminal
An offline method of transaction
Transfers cash value from customer to retailer
Without authorization
A modem for onward transmission to banks
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Tripos internet payment solutions
Internet payment solution
Payment gateway
3 stages
1st stage has a payment server located in a secure location
2nd
stage is the message server which establishes acommunication link
3rd stage is the dispatch trigger mechanism
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Magnetic Stripe Cards
Magnetic stripe cards have black magnetic stripe at back of the
card
Read by POS (Point Of Sales) machines
Records all the transactions taken place throughout the day
and updates them to your account through main frame
computer
Allows information to be read from card
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Smart Payment
Successors of magnetic stripe cards
Contains micro chip enabling to carry more information like
account details and additional security information
Enables reading and writing of transactions which take place
Availability of encryption facility
Cost ranges from one to five pounds
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Customer Loyalty Schemes
Companies attempt to reward customers who give them repeatbusiness
Cost of finding new customer is higher than gaining repeat business
Issued more than 4 million cards in UK in Shell Smart scheme
Banks in Asia/Pacific are increasing credit/debit business through
customer loyalty
Asia/Pacific region biggest user of Smart cards for customer loyalty
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Existing Competitors
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VERIFONE HYPERCOM INGENICO SCHLUMBERGER / DIEBOLD
Its strategy is tobe in allmarkets. It isseen as havinga productionorientedphilosophy
Its strategy is todevelop highspecification, highquality productswhich addressactual marketrequirements
N.A. Schlumberger(European)
joined withDiebold(American) aspart of itsstrategy forexpansion
Warranty: 13months
Warranty: 5 years N.A. N.A.
Mainmanufacturing
facility is inTaiwan, openeda new factory inChina where ithas 30% of themarket share.
it is active inChina with an
office in Beijingand claims to have40% of thismarket
It has in office inChina however it
market share inChina is tiny
It has no plansto move into
the Chinese orAsia-Pacificmarket
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VERIFONE HYPERCOM INGENICO SCHLUMBERGER /
DIEBOLD
N.A. its strength isthe productrange
Its strength isits experiencewith SMARTcardapplication,portableterminals andradiocommunications
It hasconsiderableSMART cardexperiencesince it is alsoa majorsupplier ofSMART cards
N.A. its weakness islack of SMARTcard or electronicpurse experience
N.A. N.A.
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INDUSTRY ANALYSIS
(Europe)
Electronic Funds transfer and pointof sale equipments Industry
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RIVALRY AMONG COMPETITORS
1 2 3 4 5
Large Small
Slow Fast
High Low
Low High
Low High
Secret Open
Large Small
High Low
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High Small
High Small
High Small
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High Low
Low High
Better Worse
High Low
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Small Large
Low High
Low High
Low High
Easy Limited
Small Large
Easy Restricted
Easy Restricted
None Substantial
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Small
Large
Many Few
Low High
High Low
Low High
Low High
High Low
Low High
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Small Large
Few Many
High Low
High Low
Low High
High Low
High Low
Low High
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INDUSTRY ANALYSIS
(North America)
Electronic Funds transfer and pointof sale equipments Industry
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RIVALRY AMONG COMPETITORS
1 2 3 4 5
Large Small
Slow Fast
High Low
Low High
Low High
Secret Open
Large Small
High Low
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High Small
High Small
High Small
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Small Large
Low High
Low High
Low High
Easy Limited
Small Large
Easy Restricted
Easy Restricted
None Substantial
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High Low
Low High
Better Worse
High Low
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Small Large
Few Many
High Low
High Low
Low High
High Low
High Low
Low High
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Q1) Building on your
recommendations for De La Rues
long term strategy propose a plan forthe companys entry into the Chinese
market?
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INDUSTRY ANALYSIS
(CHINA)
Electronic Funds transfer and pointof sale equipments Industry
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RIVALRY AMONG COMPETITORS
1 2 3 4 5
Large Small
Slow Fast
High Low
Low High
Low High
Secret Open
Large Small
High Low
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High Small
High Small
High Small
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Small Large
Low High
Low High
Low High
Easy Limited
Small Large
Easy Restricted
Easy Restricted
None Substantial
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High Low
Low High
Better Worse
High Low
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Small Large
Many Few
Low High
High Low
Low High
Low High
High Low
Low High
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Small Large
Few Many
High Low
High Low
Low High
High Low
High Low
Low High
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Predicted Terminal Shipments byCategory 1996-2000 (000s of Terminal)
1996 1997 1998 1999 2000
EFTPOS 50 75 112.5 168.8 253.1
Electronic Purse 5.6 11.1 18.5 27.8 33.3
CombinedEFTPOS/ElectronicPurse
10 15 22.5 33.8 60.6
CombinedEFTPOS/Loyalty
0.0 13.0 32.5 52 65
Total 65.6 114.1 186.0 282.4 412
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Current Credit/Debit cards and TransactionVolumes
Issuer Volume($Million)
Cards (000)
Industrial and CommercialBank
4422.4 4604
Bank of China 1558.1 1822
Construction Bank 951.7 2154
Agricultural Bank 177.3 2129
Other 9.3 202
Total 7118.8 10911
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China- Economic Factors
income growth by province1991(%)
Province Growth(%)
Xinjiang 116
Fujian 112
Yunnan 108
Guangdong 108Guangxi 82
Shandong 78
Shaanxi 68
A I fl ti i Chi 1983
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Average Inflation in China 1983-
1994
0
5
10
15
20
25
83 84 85 86 87 88 89 90 91 92 93 94
Series 1
Column1
Column2
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Growth in Consumer spending 1977-1994(billions of Yuan)
0
500
1000
1500
2000
2500
77 80 85 87 90 91 92 93 94
Amount
Amount
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Verifone
30%
Hypercom
40%
Others30%
Market share in China
STRATEGIC ADVANTAGE
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FOCUS
DIFFERENTIATON OVERALL COSTLEADERSHIP
STRATEGIC ADVANTAGE
uniquenessperceived by the
customerLow cost Position
STRATEG
IC
TARGET In
dustry
wide
ParticularSegment
only
4/23/2012 58
DLRF
Long Term Strategy of DLRF in
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Long Term Strategy of DLRF in
China
Cost leadership cannot be the genericstrategy used as the company does not havea large market share.
Strategy selected is of differentiation.
Differentiation (investment in the R&Dleading to product development)
Cost advantage (Increase in the volumes ofproduction by converting the assembly line tomodern cell manufacturing)
Advantages of differentiation for
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Advantages of differentiation for
DLRF Earning above average returns via providing
differentiated products.
Provides insulation against competitiverivalry.
Increase profit margins by charging apremium.
Provide entry barriers.
Initially the company will have lower marketshare but higher ROI.
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Risks of differentiation Buyers may sacrifice some of the features,
services or image possessed by thedifferentiated for large cost saving.
Buyers need for differentiating factor mayfall.
Imitation by competitor.
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Q2) Produce a strategic marketingplan for De La Rue Fortronic for theperiod 1998-2003. Justify your
recommendations.
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Mission:To be premier supplier of secure,authentic payment and transaction
systems.
Strategic objective:To expand
Objective:To achieve market share of 5% by 2003.
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Crafting Strategy: Setting up distribution channel
Direct selling through sales force
Buyer group- Banks, retailers, hospitality,petrol pumps.
Geographic market- Xinjiang, Fujian,Yunnan, Guangdong, Guangxi.
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For setting up operations and marketing the product cash is
required which could be acquired via debt or equity
Investments in R & D
Highly skilled labour
Use of IPR and Patents
Better customer service
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Q3) Based on this strategicmarketing plan draft a
promotional strategy for theTT41 terminal.
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Eclipse TT41
Regarded by DLRF as the revolutionary product
Can handle various cards
A powerful and cost effective product
Flexibility
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Promotional Plan
Trade shows
Customer seminars (Distributors and Customers)
PR campaigns
Advertising via business newspaper and magazines
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