Chemicals, Materials & Food

US Shale Gas Boom: Tides of Change in the Global Petrochemicals Market

Michael Mbogoro — Tue, 19 Mar 2013 10:25:33 GMT

In recent news, Mitsubishi Chemical Corp is apparently closing down an ethylene plant, partly as a consequence of their competitors, capitalising on the US shale gas boom, to produce cheaper petrochemicals.

The advantages are two-fold. In addition to use as feedstock for chemicals, the cheap gas can also be used as fuel and heating for production plants. It is inevitable that some major petrochemical firms will lose out if they do not shift their investment patterns to low cost areas like the US, or gain cheap supplies from elsewhere.

While some countries like China are speeding up the development of their shale gas resources, it will take a while before these supplies can influence natural gas market particularly in Asia which currently has the highest prices. This situation is already complicated by the huge supply deficit in due to the appetite from China’s growth and the Fukushima disaster in Japan.

What does this mean for the US natural gas export market? It may be cheaper for the US to export primary chemicals, rather than LNG, which requires expensive cryogenic storage and arguably higher risks of fugitive fumes and leakage during transportation and shipping. Overall, I would not be surprised if many of the applications for LNG export licenses do not get approved in light of the shifting nature of demand.

Graphene for Solar Energy Devices -An Academic Research and Development Landscape Analysis for the year 2012

Mohit Roshan Srivastava — Mon, 04 Mar 2013 09:36:50 GMT

Graphene which is a flat monolayer of carbon atoms tightly packed into a two-dimensional (2D) honeycomb lattice. It is a basic building block for graphitic materials of all other dimensionalities. In the last few years the novel material has received a lot of attention from the global research and development community.

The material can be used in many applications such as in solar energy devices and printed flexible electronic devices. An assessment of the use of graphene in solar energy devices is presented in this article. The assessment is based on the data obtained from the online search using the key words "Graphene" and "Solar" connected with AND boolean connector for the year 2012 only. Based on the search, a list of 39 research papers were obtained. these research papers were focused only on the use of graphene in solar energy devices.

Out of the 39 research papers published in peer reviewed journal papers, 21 were strictly focused on the use of graphene / graphene based materials in Dye-Sensitized Solar Cell. In research focused on the use of graphene based material as a Counter Electrode in Dye-Sensitized Solar Cells. It was also observed that number of research papers published were highest from China. In 2012 first authors from Universities located in China published 16 research papers on the use of Graphene in Solar Energy Devices. The data is presented in Attachment 1.pdf. The list of universities is presented in Attachment 2.pdf.

Attachement 3.bmp

The image Attachement 3 gives a visual mapping of the Graphene based materials and their use in solar energy devices.

In the analysis of the gathered data it was found that in 2012 Nokia Research Centre located in Cambridge, UK collaborated with the Department of Materials Science and Metallurgy of the University of Cambridge, UK to conduct R&D on graphene. The research is focused on using Graphene for energy harvesting/storage devices such as solar cells and printed electronics devices.

The analysis of the research papers published in 2012 indicate that in the solar energy device sector, the adoption of graphene or graphene based material will be focused on their use as Counter Electrodes in Dye-Sensitized Solar Cells. The research intensity is very high in China. South Korea, Taiwan and the United States of America are also conducting research focused on the use of graphene in solar energy devices.

The analysis indicates that R&D focused on the use of Graphene in solar energy devices will accelerate in coming years.

Frost & Sullivan Food Program Manager Christopher Shanahan: Heinz Ketchup Acquisition "Shocking, but not Surprising"

Jeannette Garcia — Thu, 14 Feb 2013 22:18:04 GMT

It was announced today that Heinz Ketchup was acquired by Warren Buffett's Berkshire Hathaway and private equity firm 3G Capital for a monumental $23 billion.

Frost & Sullivan's Global Food & Agriculture research Program Manager Christopher Shanahan feels that while "the acquisition is shocking, it is not surprising."

Shanahan stated that many food and beverage consumer good companies are non-cyclical with respect to their overall business. Meaning that this instance is a hedge-buy.

Yet this isn't the first acquirement Berkshire Hathaway has done recently.

"Berkshire Hathaway has been making a number of big buys over the last several years, mostly to take advantage of the slow, but steady and fragile, recovery of U.S. manufacturing," said Shanahan. "Case in point are the recent acquisitions of Lubrizol and Burlington Northern Santa Fe Railroad, all based-on bets of the re-emergence of U.S. manufacturing."

Coupling these with a food company like Heinz is a good move, according to Shanahan.

"Investing in a good food company that has shown healthy growth during the last several years during the economic recession is smart because they can hedge this bet in case a disruptive event occurs- therefore Berkshire Hathaway will be better equipped to offer more certain ROI to its clients," said Shanahan.

For more information or an interview with Christopher Shanahan, please feel free to contact me at any time at 210.477.8427 or at jeannette.garcia@frost.com.

Apple, iPhone, and the Shifting of Coolness

Katherine Burns — Wed, 06 Feb 2013 18:16:16 GMT

There’s a wonderful scene in “Almost Famous” in which Philip Seymour Hoffman tells the teenage aspiring writer/protagonist, “I met you. You are not cool.” I’ve always loved that line, because I feel like what he was really saying was, “You are your own kind of cool.”

On my best days, this is how I would describe myself – my own kind of cool. I’m not cool by normal standards: no crazy college stories, nothing like that (unless you count that I used to channel Monty Python and click coconuts together on many long, horseless walk to the library… by the way, if you think that’s cool… you’re not either).

If the coconuts story doesn’t have you convinced, here are some other reasons why I’m not cool:

1) Old movies. This makes you cool at the Turner Classic Movies film festival, but that’s about it. Couldn’t care less that this makes me not cool. To me, this just represents a deficiency in taste on the part of my peers.

2) Pop culture basics. For better or worse, I tuned out the music and TV of my youth. No Cosby Show, no In Living Color, no… I’m not sure what music I didn’t listen to, because I’m not sure who was big then, because, well, I didn’t listen to it then and I don’t listen to it now. Tiffany. Was that a thing?

3) Technology. I always seem to be one (or a dozen) steps behind in adoption of gadgets. As an example, I got my first iPhone this past December. This phone is the coolest, you guys! I can take videos! The photo quality is great! The background noise is almost nonexistent! I realize that these remarks were far more relevant in, say, 2007. This is what I mean by being not cool.

Which brings me to my next point. As I said, I’ve just come around to how great my iPhone is, and I’m enjoying the heck out of it. And then I open up the Wall Street Journal today, and I see this article comparing the iPhone to the Model T. The Model T! The must-have car of 1924! Whether you were an early adopter or a late one like me, you’d have to be living under a rock not to know that the iPhone (its many iterations, launches, sleek design, nifty-looking headphones) has been one of the most exciting, have-to-have-it product introductions of our lifetime. It’s still flying off the shelves as I write this. What on earth could the iPhone possibly have in common with the car that pioneered the power of mass production in early 20^th Century America? Here’s the author’s argument:

The Model T couldn’t have been the Model T unless the automobile were on its way to becoming too interesting a product for consumers ever to be satisfied with a single model, a single manufacturer, a single design statement.

The same is true of the iPhone. Different customers not only want different things from their smartphones, they want difference for its own sake, which explains the otherwise inscrutable shifting of coolness cache from the iPhone to Samsung’s Galaxy S line.

In sum, the smartphone market that Apple essentially pioneered now wants to “explode into diversity,” and Apple may not be ready for it. You can have any phone you want, so long as it’s white?*

I think the remark about the inscrutable shifting of coolness cache is interesting. For a very long time (an eternity in technology time, really), the iPhone has been a status symbol phone. This author seems to be arguing that it’s someone else’s turn now. Uncool people like me are starting to embrace the iPhone, and that must mean it’s not cool anymore. If it’s not cool anymore, something else is, and at least in this author’s opinion, that something may be the Galaxy (which, by the way, I considered purchasing instead of the iPhone, but it was frankly too cool for me…I’m not making that up).

Anyway, if I worked for Apple, I would cringe at any comparison of our trendiest, most breakthrough product to a car whose time passed almost a century ago. The stakes, and the challenges, for Apple are now extremely high. Reinvent the category yet again, or be surpassed by those with a new idea.

I’ll leave the adoption of those new ideas to the trendier set. For me, the iPhone is perfect. It’s just the right amount of cool – its own, very distinct, kind of cool. Just like its owner.

*I know that the iPhone also comes in black. But it’s more poetic to stick to just one color. Go with it.

Katherine is the Director of Strategic Communications for Growth Team Membership, a premier best practices research group within Frost & Sullivan. You can follow her on Twitter: @KatherineSBurns.

The Designer's Playlist

Jannette Whippy — Wed, 19 Dec 2012 15:51:31 GMT

Silence has always been a distraction for me. I need music or a medley of conversations to help me focus and concentrate. I always have music in the background, and when I work on something important, I have a few favorite playlists that help inspire and focus me. Recently I took a closer look at one of my favorites: Leonard Cohen, a musician/poet from Canada. I found some fun and interesting connections between his songs and how to best work with designers. Here are five Leonard Cohen songs to keep in mind when working with a designer:

1. First We Take Manhattan

Clarify your needs. Be a good partner in the design process, let your designer know what you want from the project, and of any designs that appeal to you. Communicating your needs is never a bad thing. Just like in the song, spell it out: "First we take Manhattan, then we take Berlin." Specifying your needs and making sure that everyone involved knows what is expected of them will leave more room to engender creativity: your designer won’t take Berlin before first taking Manhattan.

2. The Future

Include pertinent deadline information, always. Most designers work on multiple projects at the same time. They need to adjust their priorities based on concrete information, like deadlines. As Leonard Cohen would say, "Get ready for the future: it is murder." Hopefully the deadlines associated with the project don’t end in murder, but keeping your designer in the loop for when the future is nigh will ensure your project will remain on track, with no loss of life.

3. Who By Fire

Explain your issue; don’t just try to solve it. Instead of asking to make a font bold or bigger, tell the designer what you need the title or sentence to do in relation to the rest of the design or page. As the lyrics go, "…who shall I say is calling?" Knowing the concept behind the changes allows your designer to come up with innovative ways to solve the issue. However, if you do have an idea about how you might solve the problem, include it (but don’t forget to explain what the problem is so that your designer has a chance to offer a solution).

4. Anthem

Trust your designer’s skills. You hire designers for a reason; don’t micromanage their creative process. Be willing to give them space, space to innovate and create; you might be pleasantly surprised at what comes of it. My favorite line in Anthem is, "There is a crack, a crack in everything, that’s how the light gets in." Trust that your designer can break through and shine a light on your work.

5. Waiting for the Miracle

Give your designer time to work well. Time—time to marinate, mull, and sketch—is a necessary part of creating good design. One must wait for the miracle to come. Patience is best, as the lyrics suggest: "Nothing left to do when you've got to go on waiting, waiting for the miracle to come." Give a designer time to work and you will see what miracles of design emerge.

Once you collaborate with, and trust in, your designer, a world of opportunities will open up. In a similar vein, HCL Technologies realized the importance of its people and reassessed their strategies to capitalize on their strengths. GTM members can click here and learn how HCL Technologies uses a three-step transformation process to invest in a collaborative, employee-focused, customer-centric business model. If you are not a member, check out the sample on slideshare.

Jannette is the Senior Graphic Design Artist for Growth Team Membership, a premier best practices research group within Frost & Sullivan. You can follow her on Twitter: @jwhippy.

Good Design is Innovative

Jannette Whippy — Tue, 11 Sep 2012 18:20:36 GMT

Dieter Rams, a German industrial designer, introduced ten principles of good design. I am going to focus on one principle in this blog post: good design is innovative.

I am not a product designer, but innovation is something I work toward in my page and infographic designs as Senior Graphic Design Artist for Frost & Sullivan’s Growth Team Membership program. Creating clever and different ways to explain processes and data takes time; I call it marinating time.

Speaking of marinating, I love to grill. And I love a good marinade. I think marinated food is just fabulous. However, sometimes (most times) I don’t build in enough time to marinate and I get (what I feel are) sub-par grill results. Talking about grilling right now makes me a little sad what with fall just around the corner. I love the change in seasons (probably because I grew up with only two in the Pacific: rainy and dry); fall is one of my favorites, despite the shorter daylight hours and the temperature drops that deter me from venturing outside to grill. So while grilling (for me) is a late-spring, summer activity, marinating can be done year round (when I remember to plan ahead). Just like marinating food, marinating on design takes time: time to think and time to allow myself to follow meandering thoughts, jot down many sketches (I go through a lot of paper), and come at ideas sideways.

These marinating sessions require me to think loosely about a problem or page. When I let my mind wander, flashes of inspiration hit and I come up with some unique and clever ideas. It is a rush when an idea flashes and I grab it and run with it, sometimes the idea fizzles once I start fleshing out the details, but more often than not, the idea solidifies into a great page or a lovely section of an infographic.

I often tell my team that I need time to marinate on a page or an infographic. This time to muse and reflect is crucial to my design process. If you find yourself stuck on something, the flow of a presentation or even just one page; I highly recommend setting aside time to marinate, the brain often comes up with interesting solutions when you allow yourself to think sideways.

Jannette is the Senior Graphic Design Artist for Growth Team Membership, a premier best practices research group within Frost & Sullivan. You can follow her on Twitter: @jwhippy.

Paradigms, Parents, and Podcasting

Katherine Burns — Fri, 03 Aug 2012 14:12:15 GMT

Every once in a while, you read something that really blows your hair back. Few things are better than having a moment of enlightenment – having a new idea presented to you that helps you make sense of your world in a better, simpler, way.

That’s what happened to me when I came across a book from the 1960s entitled The Structure of Scientific Revolutions. This book’s author, Thomas Kuhn, argued that periodically practitioners of a shared discipline find that the framework (or paradigm) in which they operate has been undermined by a series of events that cannot be explained by the prevailing paradigm. If they continue to accumulate, these incidents combine to create a state of crisis. Out of the crisis and the chaos come a revolution and out of that an altogether new paradigm – a new way of looking at the world, a new framework for working, existing, and thinking.

What an incredibly simple, but sophisticated, concept: a period of stability, followed by a period of chaos, followed by a new order of things. I know the phrase “paradigm shift” is no longer new, but that didn’t make it any less earth-shattering to me when I first came across it.

This idea has deeply, fundamentally affected the way I look at things, and it certainly affected my approach to writing the growth process toolkit for technology strategy, which I have discussed in my two previous blogs. We are living through a paradigm shift right now – each of us trying to make sense of the chaos and searching for clues of what the new paradigm will be.

Funnily enough, my own life is in the midst of something of a paradigm shift itself. I’m already a mother to a wonderful two-year-old boy, and I am about to have a daughter. My stable world will soon, to quote myself, find itself in a state of chaos. What will the new paradigm look like?

And what is my daughter’s paradigm going to be? How will she look at the world? What truths will govern it? I’ve been thinking about this a lot lately – what do I want to teach her? What do I want her to like (hint: old movies, Esther Williams, sparkles)? What do I want her to not like (hint: scary movies, New York Giants, sugar)? What things do I really want her to believe? At the risk of falling into platitudes, I thought I’d share a few of my lessons with you all (no guffaws or eye-rolling allowed, I don’t care if it’s cyberspace).

Fred Astaire made it look easy. The lesson: the harder you work, the more effortless it will seem. There is no substitute for hours upon hours of practice, frustration, setbacks, and breakthroughs. Talent alone is one step above laziness.

Find your brilliance. My dad used to tell me, you’re probably not going to be a genius at everything. But you might be lucky enough to be a genius at one thing. Have the courage to run at that strength with everything you’ve got.

Use your words. The English language is a wondrous thing. Treat it with respect. Learn your grammar. Diagram sentences. Speak properly. Write beautifully. Read E.B. White and P.G. Wodehouse. Listen to Cole Porter.

Daddy’s wrong about Mommy’s movies. Just because it’s old doesn’t mean it’s outdated. I know there’s something to be said for special effects, but could any technology of today improve upon Gone With the Wind? I rest my case. The past is a treasure trove of awesomeness.

Every day is a happy day. Start every day believing that it will be better than the one preceding it. Never think you’ve peaked. What was the line from Anne of Green Gables? Each new day is a new beginning, with “no mistakes in it.” Isn’t that comforting?

Anyway, this is sort of my blogging swan song, at least until November. So with that, I leave you all with a few thoughts:

1) I just recorded a podcast revisiting the concept of technology strategy (its opportunities and risks, success stories and cautionary tales), and I’d love for you all to take a listen. Please forgive my voice – I’ve been battling laryngitis. My husband says I just talk too much.

2) If the toolkits seem interesting to you, take note: There are 10 of them! You can see them all here.

3) If you’re not a member of Growth Team Membership, and therefore can’t access these materials but would like to, let us know.

4) Enjoy the Olympics! Enjoy Halloween! I’ll see you at Thanksgiving!

As always, happy computing.

Katherine Burns

Katherine is the Director of Strategic Communications for Growth Team Membership, a premier best practices research group within Frost & Sullivan. You can follow her on Twitter: @KatherineSBurns.

How Wine Tasting and the Gestalt Principles of Perception Improve My Designs

Jannette Whippy — Tue, 24 Jul 2012 22:22:39 GMT

It’s rare for me to meet a Cabernet Sauvignon that I don’t like. My favorites are Cabs with backbone: big and full-bodied. I like my wines earthy (even a little herbaceous [taste and aroma of herbs]) with some tobacco flavor. And I love when the wine finishes dry. My wine preferences have matured and changed over the years (I have attended many, many tastings) I started off liking the more fruity, light reds and creamy, buttery chardonnay’s and now I really cannot abide either.

My design skills have also matured and improved through the years. I have designed many pages, some good, some great, some forgettable, and some truly insightful. I find that my best designs are conceived when I have a few key principles in mind. When keeping proximity, similarity, and order (a few of the Gestalt principles of perception) top of mind I produce clean, easily navigable pages.

Proximity occurs when elements are placed close together. While they are still separate objects they are perceived as unified because they are close to each other.
Similarity occurs when objects look similar to one another; they are then perceived as a group or pattern. Repetition of colors or objects is pleasing and aids in fast comprehension.
Order (or symmetry) occurs when the whole of a figure is perceived rather than the individual items that make it up. When designing to instruct, order and symmetry help the information to be consumed and comprehended quickly.

There are more principles, but these three are the ones that help me the most when designing guidebooks.

Chelsea Cappetta created this slideshow that showcases all the Gestalt Principles:

Gestalt Laws and Design from chelsc

Simplicity is beautiful, especially if your end goal is comprehension. Attending all those tastings allowed me to learn what I liked and didn’t like and have been the building blocks for me to be a more informed and happy wine drinker. The Gestalt Principles give me a great starting point when designing a page, as long as I know how things interrelate on the page, I can then design the page for maximum, full-bodied, consumption.

Jannette is the Senior Graphic Design Artist for Growth Team Membership, a premier best practices research group within Frost & Sullivan. You can follow her on Twitter: @jwhippy.

Improving Efficiency by Focusing on the Customer: Asia Pacific 2012 Marketing Priorities Survey Results

Holly Lyke Ho Gland — Mon, 09 Jul 2012 14:11:10 GMT

Marketers continue to be faced with the imperative tofind ways to appeal to specific customer needs, keep costs down, and drive higher ROI. This focus on the customer has marketers reassessing their value propositions and customer segments—to target the “right” audience with an engaging message. However, marketers are expected to take on this task with limited resources—budgets and staffing levels are expected to remain stagnant. To accomplish more with less, marketers are striving to improve the effectiveness of lead generation efforts and adoption rate collateral by Sales. More pointedly, marketers are striving to improve their channel strategies and collaborate closely with Sales on segmentation efforts.

To examine these challenges in more depth, the survey asked respondents to “root cause” their top internal challenges; indicating if they stem from issues with staffing, process, technology/systems, or strategic alignment. Respondents attribute their challenges to two primary causes: limitations in staff and a lack of common objectives.

When comparing Marketing’s 2012 resource allocations to forecasts made in 2011, the belief that budgets and staffing would remain static is inaccurate. In fact budgets have decreased since 2011. In regards to staffing, budgets have dropped by over a third. In contrast, marketers’ growing love affair with social media is readily apparent as social media activities are receiving twice the budget allocation they did last year. Additionally, marketers have allocated more budget to “content development”, which is critical for demand and lead generation activities.

This year’s survey included examined Marketing’s demand generation capabilities. Overall marketers are satisfied with their demand generation effectiveness—most respondents ranked their effectiveness as “Above Average”. Marketers are also satisfied with their effectiveness at specific demand generation tactics—with the exception of social media and mobile marketing.

Differentiating the Value Proposition: 2012 Asia Pacific Marketing Priorities Survey Report

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Holly is the Research Lead for the Growth Team Membership, a best practices research group within Frost & Sullivan. Follow her on twitter at @hlykehogland.

Second Time Around

Katherine Burns — Tue, 03 Jul 2012 14:23:30 GMT

I once read an article in the Wall Street Journal about how writing the pilot episode of a new series is usually easier than writing the second episode, which can be an excruciating process. Maybe it’s because writers use all their good material in the first attempt, and feel a bit empty for the second go-round.

I hope this isn’t the case with me and this blog. I so enjoyed writing the first one – I hope you enjoy reading the second one as much.

At least I teed up a few things to discuss in this one, so I’m not starting at ground zero. Wasn’t that savvy of me?

For instance, I promised you all a list of my favorite detective stories. The “Professional Communicator” in me thinks that it would be a good idea to close with this, rather than lead with it…so scroll to the end if that’s why you’re here. I also promised to tell you more about something that I just wrote – a new growth process toolkit on technology strategy.

There can’t be a more satisfying feeling in the world that finishing a large project, especially one that took a great deal of personal blood, sweat, and tears (and no, for a writer, that’s no exaggeration: writing is a blood sport, played sitting down). I love to finish writing something, and then not look at it for a few weeks. That way, when I read it again, I see it with fresh eyes. Sometimes this means I’m disappointed in something that I previously had thought was terrific—and other times, I feel nothing but pride in what has been produced.

I’m happy to say that in this case, my re-reading of this toolkit produced the latter sentiment. Maybe it’s obnoxious of me to say that, but trust me – my standards are high, and this isn’t praise I would give myself, or anyone else, lightly. Furthermore, I think it’s probably a good thing for a writer to believe in her work. If you don’t, who will?

And if I didn’t believe in it, I wouldn’t be blogging about it right now. I wouldn’t be telling you how I think there’s something in it that will strike a chord with many of you. As I mentioned in my previous posting, technology is such a complex, moving target that it’s nearly impossible for anyone to make sense of the chaos. Patterns are fleeting, and moments of normalcy or consistency even more so. What this toolkit is designed to do is to help you stay calm in the storm. To take a systematic approach to understanding your business, identifying market opportunities, and evaluating them. To nurture creativity within your organization, because without it, you’re a sitting duck. These are really important ideas—and perhaps not entirely new, but still meaningful, and difficult to execute. The toolkit’s purpose is to aid that execution to the greatest extent possible. If you’re interested in reading the entire thing, and you are a member of Growth Team Membership, you can click here.

If you’re interested in reading the entire thing, but you’re not a member of Growth Team Membership, you can still read an excerpt by clicking here.

Enough about that. I mentioned at the start of this blog that I would close with a list of my favorite detective stories. In the interest of brevity, because brevity is the soul of wit, I shall keep the list to five (starting with my favorite).

1) Some Buried Caesar, by Rex Stout

2) Black Orchids, by Rex Stout (I realize it would be more interesting not to repeat an author, but…my blog, my rules)

3) Murder on the Orient Express, by Agatha Christie

4) The Big Sleep, by Raymond Chandler (read this, and then watch the movie: Bogie and Bacall at their most snazzy)

5) The Maltese Falcon, by Dashielle Hammett (read this, and then watch the movie: Bogie at his most Bogie, sans Bacall)

For a more in-depth book discussion, or to share your thoughts on technology strategy and its myriad challenges (none of which really existed in the lovely 1930s, “stuff dreams are made of” world I’ve just recommended for you), please take to the comments.

As always, happy computing.

Katherine Burns

Katherine is the Director of Strategic Communications for Growth Team Membership, a premier best practices research group within Frost & Sullivan. You can follow her on Twitter: @KatherineSBurns.

Pursuit of Productivity and Social Selling: 2012 APAC Sales Leadership Priorities Survey Results

Holly Lyke Ho Gland — Mon, 02 Jul 2012 17:27:38 GMT

This year’s survey results indicate sales executives’ 2012 challenges are shaped by their need to increase productivity. Specifically, sales executives need to pinpoint the highest-value sales activities, streamline their sales processes to match, and invest in new tools and practices for team collaboration. The other prominent challenges are enhancing the ability to monitor the business environment for shifts in pricing pressures and customers’ purchasing behaviors and needs.

To further explore this year’s challenges, respondents were asked to “root cause” their top challenges—whether they derive from issues with staffing, process, technology/systems, or strategic alignment. Sales executives attribute their challenges to the gamut of process, tools, and people. While respondents foresee little to no increase in staff, budgets are on the rise.

Given social media’s increasing role in companies’ strategies and activities, the survey asked respondents about the sales force’s use of social media. An overwhelming majority (98%) of the respondents are using social media in their daily sales activities. Specifically, respondents employ social media to identify needs, build awareness, and nurture ongoing client relationships. Unsurprisingly, LinkedIn is the primary social media platform sales executives use—primarily joining special interest groups to enhance their understanding of customer needs. Fewer respondents are actively participating in or creating special interest groups, which forgoes opportunities to demonstrate topical expertise.

Regarding the use of virtual and social media tools in sales activities, respondents employ tele-presence and/or live streaming video and predictive analytics—the analysis of customer behavioral data to identify patterns and insights for customer interactions. However, few respondents are using social media monitoring tools (e.g., Radian 6), dashboards (e.g., Hootsuite or MediaFunnel), or CRM systems (e.g., Nimble). Consequently, sales executives are not realizing the full benefits these tools offer for improving customer focus, collaboration, and productivity.

2012 Asia Pacific Sales Leadership Priorities Survey Report

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Holly is the Research Lead for the Growth Team Membership, a best practices research group within Frost & Sullivan. Follow her on twitter at @hlykehogland.

Visualize This!

Jannette Whippy — Thu, 28 Jun 2012 17:42:36 GMT

Inspiration hits at the strangest times: morning walks with my greyhound, a quiet moment sipping wine, or a busy and hectic day of running errands. It turns out solutions come more easily when I stop thinking about the problem. However, a key component of my ability to visualize solutions is having an understanding of the broader view.

Telling someone else’s story can be challenging. As a designer of Best Practice Guidebooks, I am not involved in the primary research and robust storyboard discussions required to create our guidebooks. When a guidebook is passed to me the researcher must explain everything, in extreme detail and I am responsible for visualizing the story. However, I often find the details distracting and, while it is good to have them, I need the big picture. Working with researchers who have a superior understanding of the subject manner and are able to step back and explain the overall view helps me to create meaningful structures and visuals. When I step back from the details, clarity often ensues.

Understanding the big picture helps me to better visualize graphical solutions to complex ideas. Once I design the concept, the details tend to slip into place within the larger, coheseive structure.

Visualizing text can make presentations more interesting and help your audience grasp the core concept quickly. If you are looking to make your work more visual, more exciting, details are nice to have but if you don’t understand how they all work together, visualizing your text will not be easy. Take a step back from your page and think about what you are trying to communicate.

Commentary on the South African Special Economic Zones Bill

Tatenda Zingoni — Mon, 25 Jun 2012 15:48:37 GMT

Background

On the 23^rd of January, the Minister of Trade & Industry Dr Rob Davies gazetted the draft Special Economic Zones (SEZs) Bill for public comment. The bill is a welcome move as the government has acknowledged there has been a deficiency with the current Industrial Development Zones (IDZ) framework. The major issues which have been characteristic of the existing IDZs have been highlighted and steps have been outlined for dealing with these issues. Now what is left is the translation of the good ideas which are there on paper into practical action steps by the government and other related stakeholders.

Advantage of SEZs over IDZs

The SEZs approach promises to be an effective path for the country to take with regard to regional economic development. IDZs were created with an export orientated approach to economic development whereby investors would manufacture goods for export from these zones. SEZs on the other hand can be used for regional development purposes with firms not having to be necessarily geared toward exports. Rather than creating an IDZ and then looking for investors, the SEZs will be created on the basis of identified opportunities for a particular economic activity.

As an example, there are already talks by some participants in the Platinum industry for the development of platinum SEZ which would be focused on the beneficiation of platinum. Such a plan aligns with the New Growth Path’s drive for mineral beneficiation and will fall in line with the SEZ framework. Previously, the success of the IDZs was linked to the presence of an anchor tenant rather than having a large portfolio of investors from the onset. SEZs will bring a cluster approach to regional economic development where companies locate in an area knowing they can benefit from synergies of being close to firms operating in the same industry.

Lack of coordinated planning arrangements across government departments proved to be a major challenge for the existing IDZs. The SEZ bill aims on promoting a collaborative approach between different government departments. The Department of Trade and Industry has now been able to get Treasury to come to the party by committing to establish a SEZ fund which will be used to finance the development of the SEZs. South Africa’s IDZs have also not been able to attract the targeted investment due to lack of a coherent marketing strategy for the IDZs. Rather than marketing individual SEZs (as has been the case for the IDZs), the approach under the SEZ framework would most likely entail marketing the country as a whole and the offerings of existing SEZs.

Comparison with international best practice

In some countries, SEZs offer a very varied regulatory environment to other parts of the country i.e. With regards to the tax regime, foreign exchange remittances, labour etc. The SEZ bill aims on providing a wide range of support measures to firms established in zones. Given the bill is still in the draft form, there are no specific incentives which have been outlined so it is still too early to gauge how the bill compares with other international SEZs in this regard.

One of the differences between the South African SEZ bill and other international SEZ frameworks pertains to the labour component. Flexibility with regards to the labour employed in SEZs has not been built into the proposed South African bill. As with other international SEZs the South African bill aims on continuing with the one-stop shop approach for investors, which was being used under the IDZ framework. Investors will be able to avoid bureaucracy which is often linked with the process of registering a company and commencing operations.

South Africa’s SEZ has a leaning toward greater participation of the government in the operation of the SEZ which is different from international best practice. Although the government is involved in the setup of the zones, in other countries there is minimal involvement by government

Expected future global competitive nature of SEZs in South Africa

Due to the highly competitive business environment brought about due to globalization, South Africa’s SEZs need to play on the comparative advantage offered by the country. Instead of trying to compete in markets which are already highly contested, SA can target development of markets which are unsaturated.

The changing global economic landscape is seeing a shift from the traditional focus on the South supplying the North with raw materials and North selling finished products to the South. The drive toward value addition in South Africa and other developing economies is expected to place South Africa’s SEZs on a relatively competitive footing with international SEZs. This is especially the case for SEZs which were relying on obtaining relatively inexpensive resources (raw materials) from the developing economies.

With a collaborative approach (i.e. social contract) between government, business and labour, South Africa is expected to harness the benefit of being the economic powerhouse in Africa and also being part of the BRICS group in order to becoming a major manufacturing economy in the world.

A problem which South Africa currently sits with is the structure of the economy. The tertiary sector currently contributes more than 65 percent to the country’s GDP a structure which is characteristic of developed countries. South Africa’s high unemployment is mainly due to structural unemployment whereby there is a mismatch between the available skills in the country and the available jobs. Establishment of SEZs which are mainly geared toward manufacturing is expected to assist the country in reducing the unemployment levels.

Contact:

Samantha James
Corporate Communications Africa
P: +27 21 680 3574

F: +27 21 680 3296
E: samantha.james@frost.com

http://www.frost.com

Frost & Sullivan Comment: Establishment of South Africa- Saudi Arabia Holding (SASAH)

Tatenda Zingoni — Mon, 25 Jun 2012 15:20:55 GMT

The minister of Trade and Industry, Dr Rob Davies, announced the establishment of the holding company, Saudi Arabia South Africa Holding (Sasah), which would aim at creating opportunities in mining, petrochemicals and agriculture.

According to statistics from Trademap, in 2011 total South African Imports from Saudi Arabia amounted to $4.45 billion (R35.6 billion at R/$ of 8) of which 84.0 percent of the imports were for crude oil. South African exports to Saudi Arabia amounted to $360.5 million (R2.88 billion). This represents approximately R38 billion of trade between the two countries, estimates Frost & Sullivan.

“South Africa’s main exports to Saudi Arabia have been predominantly agricultural produce and metals”, states Chemicals Materials and Food Research Analyst Tatenda Zingoni, at global consulting firm Frost & Sullivan. “Fruits (with oranges being the main) accounted for 28.7 percent of total 2011 exports. Metals which encompasses ores, slag and ash, iron and steel along with aluminium and article of aluminium, contributed 38.6 percent of total exports”.

Saudi Arabia is South Africa’s fifth largest import source. China, Germany, USA and Japan are the top 4 import source regions. The top five import sources account for 42.1 percent of South Africa’s $41.9 billion 2011 imports. South Africa’s main export destinations were China, USA, Japan, Germany and the United Kingdom. These countries accounted for 41.0 percent of the countries destination of exports.

South Africa is the continent’s leading economy, with a 2011 Real GDP of $422.0 billion, and the services sector contributing 65.6 percent of the GDP. Although the country has a more developed industrial sector relative to other countries, the major exports of the country are still mainly primary products, and imports are predominantly value-added products. South Africa’s balance of trade, therefore, mirrors other African countries.

The collaboration between South Africa and Saudi Arabia is anticipated to see doubling of trade between the two countries in the coming five years, according to the Ministry of Trade and Industry.

“South Africa needs to step up its value addition (beneficiation) of primary produce, such as food products, minerals and metals, in order to significantly benefit from the partnership with Saudi Arabia” concludes Zingoni.

Contact:

Samantha James
Corporate Communications Africa
P: +27 21 680 3574

F: +27 21 680 3296
E: samantha.james@frost.com

http://www.frost.com

Frost & Sullivan Comment: Establishment of South Africa- Saudi Arabia Holding (SASAH)

Tatenda Zingoni — Mon, 25 Jun 2012 15:20:45 GMT

The collaboration between South Africa and Saudi Arabia is anticipated to see doubling of trade between the two countries in the coming five years, according to the Ministry of Trade and Industry.

Contact:

Samantha James
Corporate Communications Africa
P: +27 21 680 3574

F: +27 21 680 3296
E: samantha.james@frost.com

http://www.frost.com

Mastering the Social Media Universe

Austin Pullmann — Fri, 22 Jun 2012 16:32:41 GMT

It’s always nice to have your work enjoyed and shared by others. This is a primary reason for getting excited about my job, which is to document best practices executed by companies against a variety of challenges. Recently we created an infographic to tell the story of our research that covers a variety of approaches to leveraging social media effectively, entitled “Mastering the Social Media Universe” – for the record I came up with that title while sitting in a fast food restaurant with my kids. :) See a pasted version below:

[INFOGRAPHIC] Mastering the Social Media Universe

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So I mentioned that this infographic has been shared far and wide. Indeed, it has been retweeted and posted in various blogs, dissected and interpreted. All of this is great news in that we were able to connect with others using this visual format, and address challenges that others are commonly facing. Wonderful. As in many aspects of social media, the benefit generated is simultaneously hard to dispute, yet hard to calculate. Wouldn’t it be great to know how this research materially changed the thinking of the reader, and by extension generated value for that reader’s business? We would love to know. So now’s your chance – reach out to us with any kind of feedback, positive or negative on how the infographic has influenced your thinking. We will welcome it with open arms!

Kudos to our graphic designer, Jannette Whippy, who is the artistic genius behind this infographic.

Austin Pullmann
Austin is the North American Program Manager for the Growth Team Membership, a best practices research group within Frost & Sullivan.

Managing Resources and Idea Generation: 2012 Asia Pacific R&D Priorities Survey Results

Holly Lyke Ho Gland — Thu, 21 Jun 2012 18:42:44 GMT

The survey reveals that R&D executives in Asia Pacific are focused on challenges surrounding two topics: (1) managing the product portfolio and (2) integrating inputs from an array of sources outside of R&D. In regards to the first topic, R&D executives are struggling to generate an accurate technology map—that outlines customer needs, the current technology landscape, and gaps. Developing an accurate technology map is the first step to addressing R&D’s other portfolio management challenges—prioritizing and funding projects within the portfolio. A technology roadmap allows R&D executives to develop a portfolio strategy—that pinpoints which needs match company capabilities for development. Furthermore a formal portfolio strategy is necessary for an effective portfolio management process and measuring project ROI.

Customer-facing functions such as Sales and Marketing are a rich source of innovation information on everything from customer needs to feedback on current products. However, R&D executives struggle with establishing a method to consistently capture and integrate this information with their product development process. Some solutions to this dilemma include establishing regular cross-functional exchanges of ideas, or interacting with customers directly—via crowdsourcing or a formal open innovation process.

In view of open innovation’s (OI) growing prominence and potential to systematically capture ideas from a broad network, the survey asked respondents about their use of OI. The majority of respondents include OI in their product development processes. Open innovation is largely employed for idea generation and concept testing and customers are the primary source of ideas. Most of the respondents have a dedicated OI team within R&D.

Even though companies are committed to using OI—a concept that is founded on tapping into multiple sources for ideas—respondents still cite struggles with gathering and integrating insights from Sales and Marketing and customers. This may be attributed to respondents’ challenges with the fundamentals of establishing an OI program: overcoming the fear of lost IP, establishing a framework for collaboration, and garnering the resources needed to test incoming ideas and technologies.

2012 APAC Portfolio Management and Open Collaboration

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Better Communication, Better Business

Holly Lyke Ho Gland — Tue, 12 Jun 2012 13:09:56 GMT

One of my roles in my household is mediator between my son and husband. Like many a father and son, they are so much alike that sparks fly on a fairly regular basis. Not surprisingly, nine times out ten, their frustrations stem from a lack of communication. Needless to say, pointing this out results in an emphatic eye roll from my son and gruff sigh from my husband. However, once they do talk, there is peace in the house for at least 24 hours.

So what does this have to do with business?

Part of my job is to conduct annual priorities surveys, to pinpoint role-related challenges for executives in Marketing, R&D, Corporate Strategy and Development, Market Research, Competitive Intelligence, and Sales. Some challenges that come up year after year include:

How do we get buy-in at all levels of the company for strategy adoption?
What’s the best way to get support for that promising innovation?
How can we get the strategy team to integrate our insights into the annual planning process?
Why won’t Sales use the collateral we developed?

Any of these sound familiar?

In addition to picking their top challenges, the surveys also ask respondents to pinpoint the root cause of each challenge. In addition to limited resources, there are three recurring culprits—ineffective processes, a lack of common objectives, and inadequate communications.

Another key part of my job involves creating best-in-class case studies (Best Practice Guidebooks) that address the challenges identified in the surveys. In almost every case study our team produces, the best practices require developing communication mechanisms—to generate buy-in, break down silos, tap into out of the box ideas, and create transparency and trust between stakeholders. Here are two common methods we have found for creating sustainable communications:

Formal cross-functional committees—these committees tend to meet monthly and include representatives from all the relevant stakeholder groups/functions. These committees are useful to discuss resources, create transparency on project milestones, and supply information on project status prior to hand-off.
Informal monthly meetings—these meetings tend to include staff from related functions (such as Marketing and R&D) and are particularly useful for sharing best practices, breaking down silos, and brainstorming long-range or disruptive ideas.

Much like with my son and husband, when left to their own devices, business communications tend to break down or be shifted aside for more pressing priorities. Communications are vital to ensuring the health of any project or process and require commitment and nurturing equal to the multitude of benefits it offers.

Holly is the Research Lead for the Growth Team Membership, a best practices research group within Frost & Sullivan. Follow her on twitter at @hlykehogland.

A First Time for Everything

Katherine Burns — Wed, 30 May 2012 16:08:29 GMT

Well, it’s my first blog. Not just my first one for Frost & Sullivan – my first blog ever. As a professional writer, and professional communicator, I guess this means I’m somewhat old-fashioned. I’d rather write something longhand than type it, and I wish we’d all put the Postal Service back in business by sending each other some letters. (Remember letters? No “you’ve got mail” ding, dong, ping, or gong could ever be better than the silent anticipation of opening an envelope.)

Anyway, I’m old-fashioned in most aspects of my life. I love old movies. I love old music. A few weeks ago my husband asked me to name a famous Grunge band, and the best I could do was Aerosmith (apparently they are NOT “Grunge”). Somehow this makes me eccentric, whereas the fact that he couldn’t tell me the difference between Ella Fitzgerald and Julie London just means he’s cool. Whatever.

And so I’ve skipped through life, mostly paying homage to things that happened before I was born, and all to a Cole Porter soundtrack. I’ve watched Singing in the Rain more times than I could count; I’ve memorized all of Fred Astaire’s movies. I’ve devoured books on the Golden Age of Hollywood. Mid-20^th Century detective stories are my vice (I’ve read them all, but Nero Wolfe’s brownstone is my absolute ideal…and if that doesn’t mean anything to you, do yourself a favor and pick up Some Buried Caesar, or maybe Champagne for One).

Speaking of mid-20^th Century detective stories: One of the lovely things about them is the way the detecting is done. There’s no scanning of Twitter pages, no research of Facebook posts. The hero might read back issues of the New York Times, or he might pay a trip to the library. He might even go really high-tech and type something, on a really snazzy machine like an Underwood. In all, a decidedly low-tech (but always successful) way of arriving at whodunit.

Imagine my anxiety, then, when I was asked to write about technology. Not the technology of yesteryear—but the technology of tomorrow! Technology that hasn’t even happened yet, and how we can predict it and prepare for it! Did I mention I’ve barely started to blog? As I like to remind my boss, I have only to look at a computer to fry its insides past the point of hope or redemption.

Perhaps I should explain why I was so chosen. I’m responsible for writing a series of Growth Team Membership deliverables called the Growth Process Toolkits. These toolkits are essentially primers – how-to-manuals—on key topics that drive a company’s top-line growth. For example, we’ve published toolkits on M&A, new product launch, distribution channel optimization, and more. We needed to write a toolkit on technology strategy, and as the author of the series, the responsibility fell to me. I was, as I said, somewhat hesitant to begin. What could I possibly teach on this subject, when I was so ill-informed myself?

And then I realized two lovely things all at once:

I’m not the only one who’s overwhelmed by the rapid, nearly disorienting pace of technology evolution today. It’s OK to acknowledge this feeling, and to empathize with others who may also be struggling to make sense of the chaos. That’s why I decided to open the toolkit with a quotation from historian Henry Adams (for you history buffs out there, Mr. Adams was a direct descent of John, who was his great-grandfather). I came across this passage while reading David McCullough’s wonderful new book The Greater Journey: “Every day opens new horizons and the rate we are going gets faster and faster till my head spins and I hang on to the straps and shut my eyes.” He wrote those words in 1900 – but how apt they seem today! Maybe not everyone reading this would self-describe as “old-fashioned,” the way I have, but I think everyone can relate to that sentiment and sometimes feels powerless to keep up with…well, anything today. We live in a crazy time. That’s probably why we need a toolkit on technology strategy in the first place. And that leads me to my second realization:

The ideas don’t have to be mine; I just have to present them clearly. One of the great things about my job, and about writing these toolkits, is that it’s made easier by working with extremely smart people. I may not know a lot about technology, but I know who in our company does, and I know how to seek them out, ask them questions, and see how they’ve helped others think through technology-related challenges. All I have to do is collect the goods and translate them into a single, cohesive story. I might not be good at blogging (am I?), but I can certainly do that.

And so there was no need for trepidation—and in fact, this was a good chance for me to learn about something that I’ve avoided, perhaps to my detriment, for a very long time. I’m happy to say that the production of this new toolkit has been a learning experience for me; I hope reading it will be one for you as well.

That last sentence probably makes it sound like the toolkit is finished. It’s not. But it will be soon, and we’ll share it with you as soon as it is. Check back in with us next month, and we’ll provide some more detail on it (that, and my favorite detective stories).

Until then, happy computing.

Katherine Burns

Katherine is the Director of Strategic Communications for Growth Team Membership, a premier best practices research group within Frost & Sullivan.

2012 European R&D/Innovation and Product Development Priorities Survey: Open Innovation for Idea Generation

Holly Lyke Ho Gland — Tue, 29 May 2012 18:20:25 GMT

Frost & Sullivan’s Growth Team Membership™ (GTM) recently completed its 2012 survey of R&D/innovation and product development executives throughout Europe. The executives were asked to identify their most pressing challenges for 2012.

The survey reveals that R&D executives continue to struggle with doing effective portfolio planning and leveraging a wide network for idea generation. Moreover, respondents are challenged by how to generate an accurate technology map—outlining customer needs, available solutions, and technology gaps—to guide portfolio planning and project prioritization. The other prominent challenge is a perennial one, identifying the next breakthrough idea.

To examine these challenges in more depth, the survey asked respondents to “root cause” their top challenges by indicating if they stem from issues with staffing, process, technology/systems, or strategic alignment. R&D executives attribute their challenges to two primary causes: limitations in staffing and processes. R&D executives are unlikely to see additional staff in 2012; most respondents expect staffing level to remain static. On a positive note, budgets are expected to increase in 2012. Despite the emphasis on breakthrough innovation, most of the budget increases will be allocated to short-, medium-term, and incremental innovation projects.

In view of open innovation’s (OI) growing prominence and potential to help R&D develop emerging or disruptive technologies, the survey asked respondents about their use of OI. Surprisingly, given its prominence in the last two years’ survey results, the majority of respondents do not leverage OI in their product development processes. This may be attributed to respondents’ challenges with establishing partnerships and measuring the ROI of OI efforts. In regards to creating OI partnerships, respondents struggle with identifying partners with the right IP, establishing clear communication channels, and building sustainable trust. The R&D departments that are embracing OI tend to use it for idea generation and screening during product development life cycle and customers are their primary source of ideas. In terms of staffing for open innovation activities, most respondents employ part-time technology scouts.

Open Innovation for Idea Generation - 2012 R&D Innovation Priorities Survey Results

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Feedback: The Good, The Bad, and The Irrelevant

Jannette Whippy — Thu, 24 May 2012 18:32:45 GMT

As an in-house designer who works alone, I require constant feedback. It’s the only way to know if I am on the right track. Recently, I had an epiphany: I have ignored my best design resource available, my fellow designer. I could have kicked myself for the oversight. I was working on a poster that was just not fitting together well. I ignored my first instinct to send it to a friend, and instead sent it to a fellow designer in a different department. Her insightful comments and suggestions helped me to see the holes in my design and the fixes we discussed made the poster better.

Feedback is only as good as the reviewer. If your reviewer doesn’t know your intended audience or have much experience in your subject, their feedback (while interesting) is not as meaningful as another, more appropriate, reviewer. Take care in gathering feedback. Your work will get better if the feedback gathered is from someone who understands/is part of the audience you wish to engage. As Seth Godin says: “Shun the non-believers.”

When R&D and innovation go beyond labs: Marketing innovations internally

Loic Cesbron Lavau — Thu, 24 May 2012 08:59:15 GMT

Recently the economist Michael Mandel wrote on his blog ‘We have only two ways out of our current global economic mess: innovation and inflation. And as the saying goes, we should hope for the best (more innovation) and prepare for the worst (higher inflation).’ (Source: Michael Mandel, Innovation and growth, dated 26^th Oct 2011. http://innovationandgrowth.wordpress.com/)

Innovation has certainly been a key strategic focus in many corporations, and the current crisis does not alter this reality: Since ‘we should hope for the best (more innovation)’ corporations usually prepare for higher R&D costs because of some underlying trends at work for a decade:

Increased externalisation of R&D cost in many industries (automotive, pharma, packaging, etc.)
Shorten product life cycle coupled with greater product complexity (communication goods, FMCG, etc.)
Longer development cycles in many industries and countries

The pending requirements to higher R&D costs are higher success rate & magnitude of these R&D operations. What does it mean? Let’s have a look at Executives requirements with regards to R&D:

Increase productivity of R&D spending
Minimise financial risk of innovation & technology choices
Adapt to shorter cycles
Create innovative products that are affordable in emerging countries
Strengthen pus innovation internal forces

Needless to say that the role of R&D and innovation teams has changed: On top of researching & developing, R&D and innovation teams also have to reconcile discrepant frameworks (low yield & high risk vs. productive and risk-free) and timeline (long R&D cycles vs. short consumption cycles).

In other words, R&D and innovation teams must adopt multidisciplinary skills & codes (in particular, finance, marketing and strategy) i.e. ‘external’ input, since expected outcome have changed. When observing corporations we notice different models (emerging or in place):

Model	Illustrations
External sourcing of non-R&D skills	Permanent or ad-hoc consulting services provided by external parties
Internal sourcing of non-R&D skills	Closer collaboration with specific teams (typically, finance, purchasing Dep.)
Internalisation of non-R&D skills & codes	Within the R&D and innovation creation of dedicated resource (typically, an R&D marketing manager)

Obviously the choice depends on the industry, corporation size, internal capabilities, internal processes and set-up, and so on.

Whatever the model, R&D and innovation teams are a combination of people, budget and processes in a specific organisation. If now daily work goes beyond labs then this combination of budget, people, and processes is called for change:

Area	Major changes
Budget	Usually a percentage of revenues, thus changes are irrespective of R&D expected outcome shift. The allocation model however will have to address the principle ’allocate budget to fewer but more impactful project’
People	One major impact is the need for multidisciplinary skills, which may require extra headcount, or more likely education in particular with regards to strategic marketing & planning
Process	The most frequently implemented change is budgeting process. We can also consider purchasing processes, project selection processes, open innovation processes
Organisation	Depending on the chosen model, set-up is likely to change. This could be from roles, KPIs and RACI definition upto mobility, incentives and career management

But what about the daily work change? R&D remains about improvement and innovation for sure, but has to comply with higher success rate requirement. This means higher return, better differentiation leveraging competitive advantage. Even better, ensure it on various time scales:

Area	Rationale	Impact on R&D team daily work à skill set needed
Return on investment	Whether it is NPV, cash flow or ROCE more and more R&D projects must match a financial justification	Increasingly needs to incorporate financial approach even at early stage
Differentiation	Innovation can’t always be ‘breakthrough’ but it must offer new benefits to customers	Increasingly needs to incorporate competitive a Market Based Value Proposition approach
Competitive advantage	Corporations focus on core skills & capabilities and must be able to identify missing link and options to fill gaps	Increasingly needs to incorporate competitive intelligence approach
Long term portfolio	Ensure innovation pipeline vitality, at all stage of development; adopt a push model	Increasingly needs to encourage idea generation, incl. external support/ outside-in ideas

So, when Michael Mandel said ‘we should hope for the best (more innovation)’ we should say ‘for more productive innovation’.

One success factor lies in R&D teams’ ability to adopt Executives language & frameworks in order to promote their innovations, improve their chances of success and their R&D performance.

And this means new practices adoption and new external collaboration to help R&D reaching its new goals.

Green chemicals feedstock: Thoughts about supply risks and volatility - Part 2

Loic Cesbron Lavau — Thu, 24 May 2012 08:33:43 GMT

High feedstock price is the new norm

‘Back in 2005, when oil price peaked at US$60/bbl, the community started admitting that a US$100/bbl price was a realistic work hypothesis. 6 years have passed since then, we have pushed the ceiling several times.’

This is exactly what we can expect for agricultural products too. Firstly, prices are related to oil price. Secondly, demand keeps growing (with a significant impact of biofuels). Thirdly, temporary and permanent risks upon supply & demand balance have a direct impact upon prices. Historical prices show an increase trend (circa +7% pa since 2000), with levels never seen before (figure 4).

There is a consensus that high prices will remain and this impacts the industry economics in 2 ways:

- Impact upon competitiveness vs. chemicals to be substituted (if the green chemical becomes costlier, buyers switch to petrochemicals)

- Impact upon margin levels

Questions are therefore: Which attrition can we accept? Which raw material cost burden can we handle? What can be passed over our selling price?

Figure 4: Oil price vs. agricultural crop prices (Frost & Sullivan analysis, based on IMF & USDA 2011)

Feedstock price volatility is the norm and is likely to worsen

‘Demand for agricultural commodities is quite price inelastic’ reminded the OECD/FAO in 2009.

Growing demand and more frequent weather events have impacted all agricultural commodity prices. Speculative trading also increases this volatility. The analysis of recent prices shows that price volatility is getting more frequent and has greater magnitude (figures 5 & 6).

There is no evidence that volatility frequency and magnitude will reduce dramatically in the coming years. Actually, it is a working hypothesis on many plans which points a central question: how do we address this negative factor given that:

- Cost risk increases with volatility

- And return is not certain, in particular when price peaks dissuade purchase

There is no single answer; both financial choices and industrial choices are concerned. Therefore, which mix of mitigation measures shall be adopted?

Figure 6: Palm oil & Rapeseed oil price volatility (Frost & Sullivan analysis, based on USDA 2011)

Mitigation measures: Some food for thoughts

Financial instruments have been largely used in agricultural business and remain valid risk mitigation measures to offset logistics and/or raw material costs (through swap and/or hedging). However, long term risks need upstream responses.

On top of these financial instruments, the biofuels industry gave example of feedstock diversification: For instance, Abengoa operates with barley, maize and wheat. Some plant can be feedstock specialised; other can be designed to handle various type of grains, this flexibility brings better cost resilience.

Not far from the biofuels challenges, the surfactant industry frequently faces the backward integration question, in particular with the new Indonesian crude palm oil tax raise (+25%). Not surprisingly, P&G is considering a JV in that space, according to Reuters (dated 23^rd May 2011).

The idea of (re-)organising the raw material supply is also defining the local ecosystem in the Champagne region, France. The network of companies, subsidiaries and neighbours (ARD, BioAmber, Soliance, etc.) creates a nearly circular supply system leveraging main/co/by-products: Each player takes a specific block (starch, glucose, straw, etc.).

This French example is equivalent to a fragmented bio-refinery; on the other hand, integrated chemicals platforms are also developed irrespective of the feedstock type, as illustrated by Martek/DSM (algae), Roquette (cereals) or Borregaard (wood). The use of the entire plant and the operations by building blocks certainly address some economics challenges: Value creation, operating cost, supply cost, etc.

The development of alternative routes can lead to differentiated feedstock, this way contributing to supply risk mitigation. Some companies intend to take advantage from this technology platform diversification. P&G, for instance, has ties in cellulosic chemistry (development agreement with Zeachem) and in sugar-cane-based chemistry (development agreement with Amyris).

Green chemicals feedstock plans are closely connected to technology choices. Similar to renewable energies, we probably have to build a mix of green chemicals technologies to cope with feedstock challenges. New generation of feedstock (wood, algae) are certainly seen as long range solution, Solazyme >$1billion IPO being an illustration of the hope lying in algae.

However, the economic equation remains fragile and partly depends on the equilibrium between bulk green chemicals & specialty chemicals, the former providing scalability the latter offering superior sales prices. This last point is a direct input to the ability to rapidly amortise the industrial assets, while the feedstock choice will the ability to capitalise on high conversion yields. The CHOREN bankruptcy in July 2011 is probably a good reminder that feedstock economics indeed count a lot.

Illustrations cited here can be found on Doris de Guzman’s blog: http://www.icis.com/blogs/green-chemicals/

Green chemicals feedstock: Thoughts about supply risks and volatility - Part 1

Loic Cesbron Lavau — Thu, 24 May 2012 08:26:11 GMT

The green chemistry industry is developing fast because of a set of 3 major trends:

- Oil progressive scarcity

- Durable high (if not skyrocketing) oil price

- Continued population & demand growth (in particular middle class)

Needless to say, the industry is growing in a context of deteriorating environment, which also has an impact upon ‘green’ feedstock.

Many players are rightfully focusing their effort on technology development but I believe that feedstock strategy is equally important to enable a sustainable business. Although the industry currently has a small footprint, there is no doubt that major challenges will remain offer & demand balance and price, both aspects being impacted by feedstock. Feedstock risk lies in security & stability challenges. The way we address those challenges will alleviate or build up further price levels & volatility risks.

Supply security risk is hardly predictable but is real

‘September 2018: In this repeated context of draught Governments have decided intervention actions in the agricultural market: While the USA and Argentina have stopped exporting wheat, the EU Commission has prohibited irrigation for maize. In Brazil & China, sugar cane plantation is limited to force farmers to harvest food crops.’

The scenario may be pessimistic; however the risk is real because a limited number of countries produce the key green chemicals feedstock (figures 1 & 2). Let’s consider this: 4 countries hold 51% of wheat production; Brazil, China and India bring 65% of the sugar cane production; China and USA represent 61% of maize production; 2 countries hold 80% of palm oil production.

We often witness temporary regulations (due to adverse weather event). The risk is to have tougher regulations (quota; tax; etc.) due to more structural issues (permanent water stress & repeated adverse weather conditions; misbalance between food & feed and industrial crops; reduced capacity to finance agricultural subsidies).

This supply security risk goes beyond feedstock access & predictability issues: Are we fit to face an input shortage? What is the impact on our economics if we have to face a 15% input shortfall?

Figure 1: Global sugar cane production shares (source FAO, 2011)

Figure 2: Global palm oil production shares (source FAO, 2011)

Supply stability risk is certain & real

‘2014/2015 campaign: As nearly every couple of years the major grain producing countries are facing a severe drop in harvest due to the impact of drought. The situation is particularly dramatic in China and USA.’

This scenario is not far from reality (figure 3). If we look at the past 100 years the warmest years were in 2010, 2005, 1998, 2003 and 2002. Each time there was a severe draught in at least one (often 2 or more) of the key producing regions, meaning fewer volumes produced. Nearly each time prices skyrocketed.

The agricultural output & price levels can’t be 100% guaranteed since it depends on weather conditions. This output have a nearly captive market: Food & feed industries, in a context of demand growing faster than production, remain even more the prime end markets. The risk is to see more frequent adverse events impacting/ disrupt feedstock supply. Incremental production and yield will provide a limited solution: Arable land is limited, best soils are already exploited, yield gains are less and less important.

In the end, instable volumes raise operational issues: What & where to source? What’s the impact upon logistics? Instability put our economics at risk: What’s the impact of volume/price deviation upon margins, upon cash flow?

Figure 3: Wheat production, price & major droughts (Frost & Sullivan analysis based on USDA 2011 and National Climatic Data Center 2011 data

Food for Thoughts

Loic Cesbron Lavau — Thu, 24 May 2012 08:03:24 GMT

About Food for Thoughts

The good thing with consulting is that you can work on very diverse topics and areas; you accumulate a lot of transversal and specific knowledge, you meet and exchange thoughts & ideas with many people but these inputs are not necessarily re-usable immediately in the projects we all work on. It certainly doesn’t mean that these thoughts should be buried.

That’s a whole purpose of this blog: Keep a tangible print of thoughts, some kind of idea inventories, hoping they may feed & fuel further discussion. It is food for thoughts.

Food for thought = anything that:

Provides mental stimulus for thinking
Put issues into perspective
Helps identifying innovative solutions to address future challenges

About The Blogger

How on earth can a non-chemist and non-agro guy be interested in chemicals & agriculture?

Both are involved in nearly every business and have a major impact on our lives. Both are based on a lot of transversal and specific knowledge. Both are at the heart of future challenges and solutions. Both have become Loic’s main area of interest since his career start at Frost & Sullivan.

Loic is a Principal Consultant, based in Paris. He joined Frost & Sullivan in 2005 after a short experience in other consultancies. Loic holds a Master in Business from the ESCP-EAP school (Madrid, Oxford), a Master in Corporate Law from Universitat Pompeu Fabra (Barcelona) and a Maitrise in European Law from La Sorbonne (Paris).

He has been working with international companies across the global involved in agro output (Food & beverages; Personal care; Green chemicals; Biomass energy), chemicals (Green & Petrochemicals) and equipments (Energy; Industrial; Transportation).

His typical assignments are strategy & strategic marketing projects, with a strong B2B focus: Industry landscape analysis (value chain, segmentation, distribution, supply), Value proposition modelling, Scenario & business modelling (outlook, prospective, business cases), Investment evaluation (greenfield, acquisition), Portfolio modelling (feedstock, products, technologies, suppliers), Benchmark (financial, organisation, operation practices, competition)

To send questions or comments, email at loic.cesbron@frost.com

What's the best email subject line you've ever seen?

Austin Pullmann — Wed, 23 May 2012 21:25:27 GMT

Or rather, what is an example of a subject line you simply could not resist opening? I can think of a few – “How you can do what xx did”, or “Does this version work for you?”. Sometimes no subject line is the most effective of all.

The airlines could stand to improve at this. I’m subscribed to perhaps every domestic airline’s email list, and the emails (judging by subject line) have virtually nothing to say. Subject lines consist of “Austin, check out these great offers”, or “Take advantage of our (insert month) sale”. The airlines must also get data from the same source on the best time/days to launch an email, since they tend to dump into my inbox at roughly the same time.

In an effort to uptick open rates and increase email campaign effectiveness, here are 3 tips:

Spike curiosity – This can be achieved in a number of ways. Introducing an incomplete thought that can only be completed by opening the email is very effective. For example, “Do you believe it?” virtually requires a reader to open it and learn more.
Get to the point – Every word chosen either adds or detracts from the message. Limit subject lines to 50 characters or less, and ideally just 4-5 words maximum. The goal of the subject line is to get the reader to open the message. Once that’s been accomplished, the message itself can convey your objective.
Don’t shoot yourself in the foot – There are certain terms that recipients are reluctant to open (such as “Free!”, or “Reminder”, or “Help”). Even worse, some terms are set to be blocked by spam filters. Choose wording that will grab the reader and entice them to open the message.

Use these tips in your next email campaign and compare the results with previous campaigns. Post tips of your own if I'm missing anything critical!

2012 Global R&D/Innovation and Product Development Priorities Survey: Pursuing Emerging Innovation

Holly Lyke Ho Gland — Wed, 23 May 2012 15:17:56 GMT

Frost & Sullivan’s Growth Team Membership™ (GTM) recently completed its 2012 survey of R&D/innovation and product development executives globally. The executives were asked to identify their most pressing challenges for 2012. GTM will focus its best practices research to address the prominent issues identified in the survey.

This year’s survey indicates R&D executive struggle with two chronic challenges: (1) managing the product portfolio and (2) finding the next disruptive idea. In regards to portfolio management challenges, respondents struggle to develop accurate technology maps for planning, to prioritize innovation projects, and measure their portfolios’ success rate. Overcoming these challenges requires R&D executives to map out their portfolio strategy and develop key performance indicators to guide project prioritization and monitoring.

Identifying the next breakthrough idea rarely involves a “Eureka” moment, but does require time and resources. While companies understand the need to develop emerging technologies, they are reluctant to commit substantial resources to high-risk projects. This risk aversion appears to be impacting R&D budget allocations—budgets for incremental innovations are increasing, while disruptive technology budgets remain stagnant.

The survey asked respondents to “root cause” their top challenges by indicating if they stem from issues with staffing, process, technology/systems, or strategic alignment. R&D executives attribute their challenges to two primary causes: understaffing and processes (ineffective or nonexistent process). On a more positive note, R&D executives foresee additional resources—both staffing levels and budgets are expected to increase in 2012.

Given the pressure on R&D executives to tap into new ideas and emerging technology, survey respondents were asked about their use of open innovation. The majority of respondents employ some form of open innovation team (OI)—typically a small, dedicated sub-group within R&D. It comes as no surprise that OI’s primary role in the product development life cycle is idea generation and that customers are the primary source of ideas.

Even though companies are committed to using OI to increase their ability to develop emerging or disruptive technologies, respondents struggle with the fundamentals of establishing an OI process: securing internal buy-in, getting resources for idea testing, and creating a collaborative framework with external partners.

Idea Generation and Portfolio Management - 2012 R&D Innovation and Production Development Priorities Survey Results

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2012 Americas R&D/Innovation and Product Development Priorities Survey: From Portfolio Management to Open Innovation

Holly Lyke Ho Gland — Tue, 22 May 2012 18:35:17 GMT

Frost & Sullivan’s Growth Team Membership™ (GTM) recently completed its 2012 survey of R&D/Innovation and product development executives in North and South America. The executives were asked to identify their most pressing challenges for 2012. GTM will focus its best practices research to address the prominent issues identified in the survey.

According to the 2012 survey results, R&D executives continue to wrestle with portfolio management. Specifically, R&D executives need to prioritize innovation projects, balance the value and risk of the portfolio, and allocate budgets across a wide range of project categories. Respondents also struggle with two other persistent issues: (1) identifying breakthrough ideas and (2) integrating inputs from internal stakeholders (e.g., Sales and Marketing) with portfolio planning.

The survey reveals differences in challenges between different business models. For example, the key challenges for R&D executives in B-to-B companies are generating technology roadmaps for portfolio planning and managing an open innovation process. In contrast, their peers in B-to-C companies are challenged by securing buy-in for promising innovations with senior management and streamlining the product development process to reduce costs.

The survey asked respondents to “root cause” their top challenges by indicating if they stem from issues with staffing, process, technology/systems, or strategic alignment. By and large, R&D executives attribute their challenges to understaffing. Fortuitously, staffing and budgets are expected to increase in 2012. Ironically, though respondents stress the importance of driving breakthrough innovations, short-term or incremental projects account for the majority of the 2012 budget increase.

Given the potential of open innovation (OI) to tap emerging technologies, survey respondents were asked about their use of OI. The majority of respondents (58%) apply OI approaches to their product development process. When asked about the role OI plays in product development, respondents report using OI for ideation generation and screening. However, respondents in B-to-C companies are more likely to use OI throughout the product development process than their B-to-B peers. The composition of respondents’ OI teams varies by business model. Respondents within B-to-B companies employ small, dedicated open innovation teams, while R&D executives in B-to-C companies use part-time technology scouts.

While most R&D organizations engage in OI activities, R&D executives still struggle with implementation: establishing an effective OI process, garnering resources, and collaborating with partners. Respondents in B-to-B companies are focusing on developing a method to measure the ROI of OI activities, while their peers in B-to-C companies are endeavoring to establish a structured process to test the feasibility of idea submissions.

From Portfolio Management to Open Innovation - 2012 R&D Innovation and Product Development Priorities Survey Results

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Sales and Marketing Collaboration

Holly Lyke Ho Gland — Wed, 16 May 2012 16:11:02 GMT

The Growth Team Membership™ (GTM) program recently surveyed marketing executives to identify their principal challenges for 2012. The survey found that marketers struggle to (1) cultivate a differentiated value proposition that resonates with clients, and (2) ensure Sales adopts the appropriate messaging and materials.

Survey respondents indicate that understaffing and a lack of strategic alignment across Sales and Marketing’s leadership are the primary causes of Marketing’s struggles. By joining forces with Sales, Marketing can address the strategic alignment issue and tap into additional staff. However, successful collaboration requires taking a closer look at the following three areas:

1. Goal Alignment—Since revitalizing the value proposition requires a substantial commitment in time and resources, it is essential that Marketing and Sales agree on the reason for the revitalization at the outset. To achieve this goal, marketing and sales executives need to build consensus on answers to the following questions:

Are our assumptions about how we are perceived by our customers accurate?
Can we quantitatively prove any of our assumptions?
How does our value proposition differentiate us from the competition?
Does our current messaging tell the story we want?
How consistently is our messaging being used?

2. Sales Involvement—No matter how necessary, or how compelling, the redesigned value proposition may be, the sales force may still resist it. Successful marketers understand that sales reps want some measure of control over the way they communicate with their customers and are prone to resenting outside influence. Marketers therefore involve the sales force throughout each stage of the new value proposition’s development (including messaging creation). This inclusion builds cross-functional ownership of the new messaging and limits the likelihood that Sales will reject it later on. Furthermore, it speeds new messaging roll-out, since the sales force will already be familiar with the value proposition and how to tailor its message for various segments.

3. Continuous Engagement—Trust and transparency are crucial to any long-term successful collaboration between Sales and Marketing. One way to maintain this openness is through regularly scheduled meetings between senior management in Sales and Marketing. Growth Team Membership researchers have found that a monthly cadence works best for keeping the conversation flowing, collecting feedback, and addressing collaboration challenges. Monthly meetings also allow marketers to track value proposition adoption and identify opportunities for improvement.

While sales and marketing collaboration is a perennial challenge, some companies have found ways to unite these often-at-odds functions. Take the experience of Kronos, a workforce management software solutions company. For many years, Kronos considered itself a market leader, in spite of its flat product revenue growth. This disconnect stimulated Marketing and Sales to collaboratively revise and differentiate Kronos’ value proposition and messaging. Kronos’ sales and marketing teams followed the practices outlined above—alignment, inclusion, and engagement—to overcome key barriers to collaboration. Successful collaboration has resulted in 92% of the sales force consistently using the messaging. Kronos’ new value proposition has also led to a 36% increase in its earnings before interest, taxes, and amortization (EBITA).

In conclusion, Growth Team Membership survey data suggest that marketers are committed to differentiating their companies through redesigned value propositions. However, Marketing’s efforts are constricted by a lack of coordination and buy-in from Sales. By including Sales in the development process, Marketing can ensure its efforts are adopted and strengthen its relationship with Sales for long-term success.

Want to learn more about best practices for sales and marketing integration?

Sales & Marketing: Revitalizing the Value Proposition

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Scenario Planning: Making Better Decisions about Tomorrow, Today

Jessica Jeffcoat — Mon, 14 May 2012 21:57:23 GMT

The future is inherently unpredictable, forcing companies to conduct strategic planning in the face of great uncertainty. As a result, many companies struggle to develop strategies that take into account long-term threats and opportunities, while balancing short-term priorities. Scenario planning is a structured methodology you can use to test existing strategies against varied future states or scenarios. Scenario planning is not meant to predict the future. Instead, it allows you to explore a series of high-impact, uncertain—yet plausible—future states. This knowledge, in turn, enables you to recognize the “signposts” of scenarios as they unfold and react accordingly.

Frost & Sullivan’s Growth Team Membership (GTM) profiled Merck & Co., Inc. (the global pharmaceutical company) and how it applied scenario planning. Merck’s objective was to better anticipate how different strategies would hold up against the state of the global healthcare environment looking out 10 years. What follows are some of the key insights the team gleaned in understanding Merck’s approach.

Garner Internal/External Insights and Buy-In

To establish plausible scenarios for the future, it is important to involve a cross-divisional team to garner the full range of views within the company. It is equally important to tap into external perspectives on the industry, and outside scenario-planning consultants, to lend credibility and objectivity to the effort. Finally, C-level buy-in and participation in the initiative must be secured.

Challenge Assumptions about the Future

Before you can start exploring future scenarios, you must first understand your existing assumptions about the future. What is the conventional wisdom about where the industry and economic, political, and regulatory factors are headed over the next 10 years? What assumptions about the future underpin this outlook? Once this information has been brought to light, you need to challenge your underlying assumptions to explore alternative future scenarios. It can be helpful to pose this question: What if, and how could, your assumptions about the future turn out differently? The answers to this question uncover they key uncertainties you have about the future and allows you to start envisioning different future scenarios that could emerge.

Explore Future Scenarios’ Implications

After considering a range of alternative future scenarios, it is important to focus on a digestible number of scenarios—generally no more than four—to explore in depth. It is essential to filter the scenarios by plausibility and impact to select the most significant, relevant scenarios for your company and industry.

Identify signposts of the future: A critical step in evaluating the final group of scenarios is to identify early indicators that would signal each scenario is coming to pass. A company should continually monitor this list of indicators to look for early warning signs so it can determine what, if any, strategic shifts are necessary. This enables you to hedge your bets against future risks and gain a first-mover advantage.
Test current strategies against divergent futures: It is important to think about how your company’s current strategies would perform in the context of each scenario. What challenges and opportunities would you face? What actions should you consider taking now to prepare for each scenario?

Revisit Investment Decisions

Once you have identified and explored the most plausible scenarios, the next step is to present your findings to executive management and help them internalize the scenarios’ implications. It can be beneficial to run an investment exercise with executive management that compares their current long-range resource allocations with the allocations they would make in the context of each future scenario. If a particular scenario were coming to fruition, how might your company change its resource allocations toward existing and new business areas? This type of exercise can translate scenario planning into strategic discussions and decision-making about the future.

Learn from Merck’s Approach to Scenario Planning

Scenario planning enabled Merck to embed longer time horizons in its strategy planning, gain a deeper understanding of its internal capabilities and the competitive landscape, and prompt scenario-based resource allocation decisions.

Register for a complimentary webinar on May 22^nd featuring the Merck case and learn how Merck used scenario planning to explore long-term threats and opportunities.
Download a three-page sample of the Merck Best Practice Guidebook, Scenario Planning: Fostering Long-Term Strategic Thinking.
If you have questions regarding the Growth Team Membership™, contact us at GTMResearch@frost.com, follow us on Twitter @Frost_GTM, or visit us at www.gtm.frost.com.

Customer-Centric Shortfall: 2012 Global Sales Leadership Priorities Survey

Jessica Jeffcoat — Thu, 05 Apr 2012 18:20:22 GMT

By Jessica Jeffcoat, Research Analyst, and Holly Lyke-Ho-Gland, Research Lead, Growth Team Membership™ (GTM)

Frost & Sullivan’s Growth Team Membership™ (GTM) recently completed its 2012 survey of sales executives globally. The executives were asked to identify their most pressing challenges for 2012. GTM will focus its best practices research to address the prominent issues identified in the survey.

Sales Leadership in 2012—A Snapshot

Implementing lead generation strategies is the primary challenge of sales executives.
A lack of personnel is the root cause of the primary challenge.
In comparison to 2011, staffing levels will remain static while budget levels are expected to increase moderately in 2012.
Companies attribute 20 percent of their sales to distribution channels and partnerships.
In the main, Sales uses social media to identify and qualify leads.
LinkedIn is the primary social media platform used by Sales, and is typically used to improve sales reps’ knowledge of customer needs and to boost brand recognition.

2012 Sales Leadership Survey Executive Summary

The 2012 survey reveals that sales executives continue to wrestle with a perennial issue: improving customer focus. Specifically, sales leaders must employ more effective tactics to generate high-quality leads, map their sales cycle to customers’ purchasing behavior, and incorporate customer feedback into their sales strategies.

To examine these challenges in more depth, the survey asked respondents to “root cause” their top internal challenges by indicating if they stem from issues with staffing, process, technology/systems, or strategic alignment. Sales executives attribute their challenges to two primary causes: limitations in staffing (limited resources and lack of knowledge) and processes (ineffective processes and inadequate communication). Sales executives are unlikely to see staffing improvements in the next year, as most respondents anticipate staffing levels will remain static in 2012. Budgets, however, are expected to increase moderately in 2012. Despite concerns over inadequate staffing and processes, nearly half (49 percent) of the survey respondents rate their function’s effectiveness as “above average.”

Given social media’s prominence and its ability to give sales executives an additional window into customer needs and behaviors, the survey asked respondents about their use of social media. The majority of respondents (54 percent) indicate they participate in social media as part of their sales approach. More specifically sales reps are employing social media to identify and qualify prospects, collect information on customer needs, and maintain customer relationships. Sales executives predictably are using LinkedIn as their primary social media platform and are conducting individual searches and joining special interest groups to enhance their understanding of customer needs. While the majority of respondents actively participate in LinkedIn’s special interest groups, few sales executives moderate their own groups and thus do not take full advantage of LinkedIn’s ability to help boost brand recognition.

In response to questions about their use of virtual and social media tools in sales activities, respondents indicate universal use of tele-presence and/or live streaming video to increase sales productivity. However, the majority of sales executives indicate they are not employing social media CRM systems (e.g., Nimble), monitoring platforms (e.g., Radian 6), or dashboards (e.g., Hootsuite or MediaFunnel). This is unfortunate given that these tools magnify the benefits of social media activities by collating customer information, which helps facilitate the creation of customer insights. In addition, more than half of the respondents do not use predictive analytics—the analysis of customer behavioral data to identify patterns and provide insights for customer interactions—which is a key customer analysis tool. It is noteworthy that most sales executives are not using these tools despite citing the need to improve their understanding of customer needs and behavior.

Respondent Demographics

There were 564 respondents.

The respondents work predominantly for privately held (56%) rather than public (34%) companies.
The majority of the respondents (69%) work in a business-to-business environment.
Most of the respondents (39%) come from firms with revenues below $100 Million (USD).

For a more detailed analysis of the survey results, including analyses by business model, please see the attached report.

If you have questions regarding the survey, or are interested in learning more about GTM’s marketing best practices, please contact us at: GTMResearch@frost.com, follow us on @Frost_GTM, or visit us at www.gtm.frost.com

How to revitalize your demand management process

Austin Pullmann — Mon, 19 Mar 2012 16:30:35 GMT

It’s the rare B2B marketer who hasn’t had to listen to sales reps complain about the quality of leads being provided. And sales forces tend to be underwhelmed by the volume of leads too. So what to do? Ramping up demand generation efforts makes little sense if the lead management process (i.e., what happens to it when it comes in the door) is fundamentally broken. Conversely, refining lead scoring and assignment won’t help much if demand generation is based on anaemic contacts database.

Sometimes getting more of the right leads to Sales necessitates starting anew. The Growth Team Membership™ (GTM) recently profiled Kronos, Inc., a workforce management software and services company, on its overhaul of demand management. Here are some key lessons we learned from Kronos:

It’s a (big) team sport: It is common sense to set up a cross-functional team when dealing with major initiatives, and fixing demand management is no exception. You need to think beyond including the obvious groups such as Marketing and Sales. Demand management touches multiple functions in one way or another, and involving them is crucial to identifying and root causing the challenges. Finance, IT and web teams were key parts of the taskforce Kronos established
Speak the Same Language: Ever tried to Google some of the following terms: demand management, lead generation, or marketing automation? The great diversity in definitions you find is indicative of the confusion over terminology that often occurs within companies and between the functions involved. It is absolutely imperative for all stakeholders to examine their demand management lexicon and establish a shared set of definitions moving forward. Kronos defined demand management as the process of identifying and engaging prospects, converting them to leads, and moving them through the sales pipeline
What Matters Most: It is not always obvious what issues you need to tackle first. Some marketers focus on technology and while there is invariably some new technology that appears to be the solution, ignoring process is quite a risky move. The better approach is to employ a comprehensive framework to assess where you have performance gaps today and then determine what your desired state is—this then drives your technology requirements amongst other things. Kronos used a simple people, process, technology framework to guide its evaluation of the lead management system
Improve Lead Velocity: Even the best lead in the world degrades quickly, so it is imperative to get it into the hands of sales quickly. Marketers have to determine how process, technology and the hand off to Sales will work in concert to deliver leads promptly. Employing Marketing Automation Platforms will speed lead processing. Lead development (going from a Marketing Captured Lead to a Marketing Qualified Lead) is often bedevilled by issues that undermine the whole system. To solve this, Kronos created a lead development group that qualifies the leads. Employing service level agreements helps set expectations for this group
Right Content, Right Time: Prospects exist at all stages of the buying cycle, so Marketing needs to create the right mix of content/offers to capture them. Prospects at the beginning stage of the buying cycle tend to behave more passively (e.g., downloading white papers or case studies), whereas later-stage prospects are more active (e.g., will participate in live events). You need to develop a content strategy that spans across the buying cycle, as well as being tailored to your target segments

Revisiting your demand management approach with these principles in mind is no easy task, but marketing leadership ignores the function’s contribution to the sales pipeline at its own peril.

Learn how Kronos revitalized demand management

Kronos’ Corporate Marketing faced the core challenge we outlined at the outset: the need to provide sales with higher quality and higher volume of leads. Accordingly, marketing led a thorough overhaul of demand generation and lead management.

Attend our webinar on Tuesday, March 27 featuring Kronos’ best practice and Q&A with Steve Gray, VP of Corporate Marketing, and Director for Corporate Marketing Operations, Susan Paugh
Download a three-page excerpt from GTM’s 14-page Best Practice Guidebook, Implementing an Effective Demand Management Process

Contact the authors: Austin Pullmann (Austin.Pullmann@frost.com) and Keith O’Brien (Keith.Obrien@frost.com).

The Implementation Deficit: 2012 Corporate Strategy Priorities Survey Results

Holly Lyke Ho Gland — Mon, 19 Mar 2012 15:49:42 GMT

Strategists continue to struggle with many of the perennial issues they identified in the 2011 survey—developing effective implementation plans and aligning corporate and financial objectives. In regards to implementation, the focus is on developing an effective procedure for execution that includes standardized metrics and milestones. Companies newfound focus on long-term planning—looking ten or more years out for game changing opportunities and threats has strategists endeavoring to integrate future or Mega Trends within their planning process. In addition, this emphasis on long-term strategies requires strategists to demonstrate the value of Mega Trend initiatives, even though they may not show financial results for a few years.

When strategist’s challenges were analyzed by business model, strategist in B-to-B companies cite challenges with strategy implementation and integrating future or Mega Trends.. However, strategists in B-to-C companies stress additional problems such as: aligning divisional and corporate strategies and integrating sustainability into the corporate plan, in addition to strategy implementation.

To better understand the top challenges, respondents were asked to “root cause” them in terms of staffing, process, technology/systems, or strategic alignment. The root causes ran the full gamut of options from insufficient staff to a lack of strategic alignment on common objectives.

Companies continue to be cautious about resource allocation and corporate strategy functions are not exempt from this. Respondents foresee both budget and staffing levels remaining constant in 2012.

Given the perennial struggle with getting strategies implemented, respondents were asked a series of questions about their implementation practices. Strategists indicate they use a variety of best-in-class implementation practices:

Employing a dedicated implementation team
Ensuring that divisions—both business (profit centers) and service units (support functions like Human Resources)—create annual strategies that are aligned with the corporate strategy
Conducting quarterly strategy execution reviews within the strategy team and with senior management

Despite using these best-in-class practices, most respondents graded their companies as “Average” regarding strategy execution. The divergence between best practices and effectiveness can be explained by additional findings from the survey:

Implementation teams are understaffed and/or members of the team lack the “right” skill sets
The clarity of roles between participants in strategic planning is only rated as “Average”
Technology systems for strategy monitoring are outdated and insufficient for strategists’ needs

In conclusion, the interest in Mega Trends for planning coupled with meeting the financial expectations of stakeholders, requires strategists to develop and apply implementation and monitoring processes. To strengthen strategy implementation, strategists need to first set their own house in order: ensure the department has the appropriate people, that roles and responsibilities are clearly defined, and the supporting technologies are up to the task. Secondly, corporate strategy functions need to create greater transparency around roles, metrics and expectations.

Access the full report for a more detailed analysis of the survey results—by business model, corporate development challenges, and trends in post-M&A integration.

Strategy Implementation and Acquisition Integration - 2012 Corporate Strategy and Corporate Development Priorities Survey Results from Frost & Sullivan

Kodak - After 130 years in development, will it go in a flash?

Noel Anderson — Mon, 23 Jan 2012 13:48:37 GMT

This coming summer will play witness to my 5^th wedding anniversary. In that time my wife and I have honeymooned, bought a family home and filled it up with two (sometimes) lovely children. In short, in the last half decade, we’ve had more Kodak moments than there have been EU regulations defining the shape that a banana needs to be in order to be a banana. Now, as I think about our friend the curved yellow fruit, what I do find bananas is the cruel fate of Kodak this month.

So what’s happened to one of the world’s most-loved brands?

At around about the time that I was exchanging my wedding vows in the Alps, an avalanche of misfortune was already being dislodged and wreaking havoc on the once rock-solid foundations of this popular business.

Its once picture perfect share price went downhill faster than Franz Klammer’s skis and it posted losses in 6 out of the past 7 years.

Robert Burley, professor of photography at Ryerson University in Toronto, puts it nicely:

“There’s a kind of emotional connection to Kodak for many people. You could find that name inside every American household and in the last 5 years, it’s disappeared”

The demise of Kodak is clearly down to a lack of vision by the management of the company in the 1980’s.

Unwilling to give up the golden goose that was photographic film through the fear of the cannibalisation of its products, Kodak’s senior executives missed the future trend in digital photography like a drunken slalom skier might miss the gates of his run. This mistake enabled their competitors to skate right over their share of the photography market. The irony is that Kodak developed the first digital camera back in 1975.

Errors of this magnitude are explained in psychology by loss aversion. This is the phenomenon where people are more worried about what they stand to lose, in Kodak’s case film, than what they stand to gain from the new opportunities that are available to them, e.g. digital – sound familiar Sony? The key word is also fear. Fear kills economies. Fear kills growth. Fear prevents individuals from reaching their full potential.

This is happening in boardrooms all over the world today. And it’s not surprising. It is estimated that up to 70% of all new product launches fail, as consumers need to feel that a new product will offer them SEVEN times the value of their current product. This makes executives very fearful of change.

So, if we anticipate an avalanche heading for our markets how do we ensure safe passage down the mountain?

We can do this by understanding which short-term hot topics are forecasting growth in the next 5 years whilst redesigning our longer term piste maps to allow for the longer term mega trends ten years out.

If Kodak had seriously taken heed of the mega trends for the 90s back in the late 80’s, it may well have been able to eat its baby and still be number 1 in the photography market. So how do we demist our goggles to get a clearer view of the future horizon for our businesses?

In December I helped design and launch a research survey with many members of the Growth, Innovation and Leadership Community in Europe. The aim of this project was to see which of the 600 hot topics selected by Frost & Sullivan’s leading industry analysts were poised for the greatest future success.

The full findings will be posted soon, and thanks again to those of you that participated in the survey, but for now here’s a few of the highest ranked hot topics and mega trends that will start to get their crampon spikes into 2012 and beyond:

Automotive - Mega trends that will impact the cars of the future / Telematics and Connectivity Markets

Security - Safe cities 2012 - Including urban mobility, energy security, building security

Chemicals - Cradle to cradle white biotech and bioplastics / demand for specialty chemicals for construction and waste water

Energy - Opportunities in renewable value chains / growth in solar power technologies

Healthcare - Medical imaging in cardiology applications / Computed and Digital Radiography

Environment - Smart water and the digitisation of the market

Aerospace – Training simulation

Information and communication technologies - Momentum in cloud technologies / disruptive technologies and new business models

Interestingly, 54% of the respondents also stated that they are now seriously looking at mega trends as they shape their strategy for long-term success. Back in the 90’s the key mega trends that were doing the rounds were:

China as an Emerging Super Power
Internet Retail and E-Commerce
From Industrial to Information Society

Today, the top mega trends with the greatest future potential were identified by our respondents as:

Smart is the new green
Infrastructure - Mega cities, corridors and regions
And beyond BRIC – the next game changers

So if you want to grab the button-lift to the top of these peaks of prosperity, then you should look at your business today and imagine how it will fit into the economy of tomorrow. You might even want to consider getting a helicopter to a new mountain; market diversification never did Richard Branson much harm.

So can Kodak survive? I hope so. Their approach to social media has been nothing short of remarkable and the brand and its patents could be a veritable gold mine for the right partner or investor. But the caution in this tale is that the best marketing and branding in the world is useless unless you have the right innovations, products and services to back it up.

To round off this post and make it particularly poignant please allow me to go full circle and return to the ‘big day’ 5 years ago. Then it was customary to have disposable cameras on every table for people to capture those Kodak moments. However, such was the quality of the digital snaps taken by our guests that, to this day, my Wife and I never bothered to develop the disposable film cameras from the tables. That is a perfect example of how the death knell can ring for an outdated technology.

But you never know, the trend towards retro products could mean that film photography might one day have a cult fan base that is similar to the one that exists for vinyl records today. In fact, I now have a strange urge to reclaim that unbeatable feeling of excitement from holidays past, when you picked up your photos from the Kodak shop and viewed them for the first time with your friends and family, thumbs over the lens and all.

With that in mind, does anyone know where I can get 30 disposable cameras full of wedding pictures developed this week? Let's hope that those Kodak moments never die.

Thanks for reading and till soon,

Noel

Waterproof Cell Phones - Its about time

Rufus Connell — Mon, 09 Jan 2012 17:51:11 GMT

Liquipel announced at CES that it has a nano-coating that will help make cell phones splash resistent. We've seent that water damage and physically broken screens are two of the top reasons that phones get returned for warranty replacement.

The big question to me is, "Why?". It is virtually impossible to buy a man's watch which is not waterproof to hundreds of meters. I SCUBA dive and I've never been below 100 feet nevermind 100 meters. Manufacturers of other devices seem to get it. Pentax makes an amazing point and shoot camera that is more or less everything proof.

When RIM was the #1 vendor of smart phones and its devices had almost 40 buttons it was clearly difficult to build a device that would keep out water. Now that touchscreen phones with almost no buttons are becoming the norm, a cell phone should be able to laugh off a few drops of water from a cold beverage, I should be able to answer a call in the shower (although I promise I won't), and if my kid drops the phone in the pool, it should survive a trip to the shallow end.

Smartphone manufacturers, please get with it, we all want our devices to be water resistant.

Overcoming the Great Divide: Embedding Corporate Strategies Effectively

Holly Lyke Ho Gland — Mon, 21 Nov 2011 19:03:47 GMT

When the Growth Team Membership (GTM) program surveyed corporate strategy executives to identify their top challenges for 2011, the primary challenge was, for the second year in a row, developing effective strategy implementation plans. When asked to identify the root cause of this challenge, respondents indicated it was a lack of common objectives. Because of this lack of alignment on the desired outcome of corporate strategy, strategists find it difficult to develop and establish implementation plans throughout their companies. Therefore, to address the root cause, strategists need to ensure that the corporate strategy planning process encompasses the appropriate corporate and divisional stakeholders, and mechanisms to secure agreement on the goals and tactics to achieve them.

The strategic planning process must deal with the following issues head on:

Lack of Strategic Alignment—this problem is most pronounced when corporate objectives have to be adopted and adapted by the business units or divisions. Division leadership needs to understand clearly how corporate imperatives need to shape their own strategies and operations. Moreover, the corporate strategy function must support the divisions in using corporate goals as a framework for their own annual planning.
Division Silos—even when divisions integrate the corporate strategy with their annual planning, there is still a tendency for each division to do so without any reference to the plans of the other divisions. Without any cross-divisional collaboration in planning, companies risk potential redundancy, internal struggles for resources, overlooking cross-functional dependencies, and ultimately reducing their strategies’ effectiveness.
Employee Engagement—strategists identify a collaborative environment and widespread employee engagement as necessary for effective strategic planning. Involving a larger set of employees in the planning process builds a holistic picture of the company’s capabilities and needs and secures buy-in amongst the people who eventually have to execute the tasks that implement the corporate strategy. However, when GTM asked about employee engagement with strategic planning, respondents admitted it was still the preserve of senior management.

Globalization and the size of many companies have strategists struggling to find communication and monitoring methods to ensure corporate initiatives are consistently adopted companywide. All of these strategy development and implementation challenges necessitate strategists developing a supportive corporate culture and open communication strategies.

While there is no single solution to the implementation challenges inherent in strategic planning, there are lessons from the experiences of companies using best practices. A number of these firms have developed an integrated strategic planning process that drives alignment on the objectives and coordinated execution of the plans at all levels of the firm.

Want to learn more about best practices for integrated strategic planning?

Access a complimentary webinar featuring how Sundt created an integrated strategic planning process to break down silos, establish a shared corporate vision, and coordinate strategic and tactical planning for effective implementation. This webcast includes a Q&A session with Richard Condit, Chief Administrative Officer at Sundt and Steve Haines, Founder and CEO of Haines Centre for Strategic Management.

Animal Feed Ingredients - Beating the Odds

Kaushik Ramakrishnan Shankar — Mon, 24 Oct 2011 13:55:00 GMT

Compound animal feed has been the easiest access to market route for animal feed ingredient manufacturers. FEFAC has estimated that while 2010 has been positive overall for compound feed, 2011 might at best be stagnant if not negative. Two of the trends identified by FEFAC for 2010 are worth mulling over -

1. Partial recovery of per capita meat consumption in 2010 in EU 27 countries (1 Kg over 2009, but 3.5 Kg below 2008). This data was released mid 2011. The trend for 2011 is yet to be seen. In essence, if a double dip occurs, we might see meat consumption nose dive further.

2. Stalled demand for industrial pigfeed in 2010, although pig meat output increased by 2%. This means that productivity targets for commercial pig farming were raised in 2010, and we are probably on the path of increasing this further.

It is obvious that selling meat is going to get difficult, and the resultant cascade on the entire production chain. But will this include feed ingredient manufacturers?

This question is best answered with another question - Even though compound feed consumption fell, productivity of swine husbandry systems rose. What was this due to? How important were productivity enhancers like nutritional and sensory ingredients in bringing about this positive change?

Across the pond, things have not been very different either. Butterball LLC has decided to close down one of its plants by the end of this year citing higher feed costs as a major factor affecting profitability. In the meantime, CJ just announced a $323 million amino acid plant in Iowa to manufacture Lysine.

The overall picture points to a difficult time for everyone involved in animal husbandry, except for those with solutions to problems - Feed ingredient manufacturers.

Success imperatives for Natural High Intensity Sweeteners

Kaushik Ramakrishnan Shankar — Fri, 30 Sep 2011 05:31:19 GMT

New sources of Natural High Intensity Sweeteners are constantly being discovered. The latest to be tested and discussed is "Miraculin" from the African berry - Miracle fruit. This molecule has the ability to make acidic and sour tasting foods, taste sweet. Now that sounds like a wonder molecule for specific pharmaceutic and food applications. But success in this market requires the molecules to have a minimum set of characteristics.

1. Ease of availability - stevia is widely cultivated. Luo Han Guo is being cultivated as a backend integration by some extract manufacturers. Tagatose has a ready supply of milk proteins. The red berry mentioned above is still rare. Glycirrhiza is grown in South Asia for use in traditional medicine and the quick availability of the raw material for bulk production is not visible currently. Thaumatococcus danielli from Africa, used to make Thaumatin again is available only through one manufacturer and cultivation is not as widespread as stevia has achieved. While raw material supply is important, so is the capacity to extract, purify, stabilize and reach it to the customers.

2. Organoleptic properties - Most if not all of the natural High intensity sweeteners suffer from a perception of bitterness associated with their concentration dependant sweetening ability. The relationship between sweetness intensity and concentration is not linear and developing the right dosage and substitution percentage for sugar requires extensive knowledge of interaction of these ingredients in both the food matrix and in the tongue. Some of them are inherently bitter.

3. Industry commitment - Developing operations from cultivation to processing and marketing. Influencing mindset of consumers with extensive marketing and advertising support is essential. Investment in Research and development to establish a healthy pipeline of innovations will ensure that fickle consumer trends can be quickly addressed until the ingredient is able to establish itself in the market as a mainstay of the sweetener market.

4. Riding the Glocal wave - The new sweetener ingredients are exotic, being sourced from endemic cultures and having a history of traditional usage. To bring them to the global market without losing the local flavor, in fact leveraging the local history of usage for greater consumer acceptance, is a fine balancing act that market participants have to practice. The sensory perception and positioning of the product has to cater to global means of preference and provide customization in different regions.

5. Price - Current trends indicate that price is the least of the factors influencing the success of a natural high intensity sweetener. Cost of inclusion in foods is high, not due to ingredient price but due to the need for effective bulking agents that play the structural role of sugar in food matrices. The premium commanded for "natural" is justified in these cases.

If an ingredient is able to address these issues satisfactorily, then commercial success is assured. The hype surrounding stevia based sweeteners is justified by a high rating on many of the parameters above and it might indeed prove to be the "holy grail" of sweeteners. Added to that the tag of sustainability (supply, subsidy, carbon footprint et al) is definitely a driving force for stevia in the sweeteners market. It remains to be seen if the regulatory scenario, currently optimistic, is indeed going to drive explosive growth of this ingredient.

GIL 2011: Africa - Tapping into the untapped - Consumer demand driving mega opportunities in Africa - What is your strategy?

Mani James — Tue, 23 Aug 2011 16:04:58 GMT

Mega Trends and Opportunities for Companies in Africa
Mani James, Business Unit Leader, Chemicals, Materials & Food,
Frost & Sullivan

Tapping into the Untapped: Growing Consumer Demand Driving Mega Opportunities for Chemicals & Material Suppliers in Africa

The recent global economic recession has had a significant impact on the chemicals &
materials industry globally. Demand for core chemicals sectors collapsed and, as a result, global production decreased during the economic recession as companies cut back production, shutting or idling plants and conducting lay offs. However, many countries in Sub-Saharan Africa were considered attractive investment destinations for chemicals & material markets. Many African economies are witnessing a very robust GDP growth. As a result, there is growing consumer demand across key end-user sectors in Africa such as energy & power, water & sanitation infrastructure and infrastructure in key African countries.

This is bound to drive a higher growth trajectory for the markets for chemicals & materials by 2020. The key to unlocking this potential in Africa is to understand the underlying Mega Trends that shape the business environment.

Discussion points :

- What are the key Mega Trends that would drive business for chemicals and materials
companies in Africa?
- When can you expect to see the impact of micro trends on the business environment?
- Where are the key opportunities that would manifest in Africa by 2020?
- Why is Africa the next big opportunity for chemicals and material suppliers?
- How can you adopt your strategies to tap into this massive opportunity Africa
presents?

We will be presenting the key outcomes of our discussions during the GIL 2011 : Africa discussions on a regular basis.

Why Blame S&P?

Kirti Timmanagoudar — Tue, 09 Aug 2011 11:55:15 GMT

The president of United States, Mr. Warren Buffett and the analyst on the wall street; many are blaming S&P for downgrading the US ratings. I have the highest respect for the world's greatest investor.. Eu to Buffett?

In stead of congratulating S&P for doing a good job and being honest (even at the potential of getting this wrath from various angles) its a pity that we are blaming S&P. They say S&P is evaluating America politically and S&P is not a political judge. How can you evaluate a country without looking at its political stability? Not only has S&P judged it politically, they have got it perfectly right. With the democrats not willing to give up on healthcare expenditure and the republicans not willing to budge on taxes, the fact is US is a debt ridden economy and will remain so for the near foreseeable future!

Some are even asking what was S&P doing four years ago when it gave the highest ratings to asset backed securities (that ended up nasty with the beginning of Lehman going belly up) and hence doubting their analysis. That's the point, S&P has learnt its mistake while a few others including the spendthrift US government has not. I haven't heard a more lame excuse than "we can print more money so we will not default". What about the eventual devaluation of the US dollar and its effect on buying power for Americans? What about the devaluation of billions of dollars of US securities held by other governments?

Obama saying "US will always be a triple A country" is optimism misplaced at the highest. The spiralling US government debt is indeed worrisome. The US government's last week's decision to raise the debt ceiling is only expected to postpone the bad news and not put it off for good. The world did not see a concrete plan to put away the larger danger.

The easiest way out is to say don't give too much importance to rating agencies. If the president of United States himself had not mentioned and made such a big deal of the US ratings downgrade, nobody else would have.

Either believe in the S&P ratings and do something about it or don't believe it and don't talk about it!

Advanced analytics made easy with new business discovery tools

Avinash Bhaskar — Mon, 11 Apr 2011 18:50:55 GMT

My last entry in this space was that of text mining. Since that piece, I have now moved onto learning the market trends in the multi-billion dollar business intelligence tools and so far the study has truly been a satisfying 'business discovery'. I emphasize the term 'business discovery' mainly because this is the catch phrase that is being used by the next-generation business intelligence vendors to differentiate themselves from the traditional BI tool vendors typically supplied by the behemoths SAP, SAS, Oracle, IBM and Microsoft.

Although traditional BI tools have the advantage of hosting massive amounts of data, boast high quality graphics and visualization have been limited by such qualities as difficulty in using, slow in responding to queries and were mostly limited to the IT department of an organization.

Now the next-generation data discovery/business discovery tools such as the ones provided by Qliktech, Tibco, Actuate, Salient etc seek to address those limitations by providing in-memory architecture, 'speed-of-thought' responses to queries, highly intuitive dashboards and many more. Most importantly these tools are so easy to use that any business user can get his daily fix of charts and figures without having to deal with IT!. This truly represents a shift in the way BI tools have been positioned in an enterprise.

This new approach to BI tools has certainly attracted number of small players offering their solutions crowding the market place. Although there is enough room in the global market for new players to enter (our estimation is about $9.5 billion in 2010) the mega vendors (SAP and others) are now waking up. Recently, SAP's Business Objects shifted its architecture to an in-memory platform signaling that it is ready to take on the minnows.

It remains to be seen who wins. My thinking is that whoever is a winner, the ultimate winner has to be the business user of an enterprise!. Imagine the possibilities, if this next generation BI tool and text mining tool are integrated on the same platform!. While this is being accomplished already, I certainly believe there is room for further improvement in this area.

Watch this space... more to come on BI

Managing the fallout: The impact of the Fukushima disaster on Japanese food exports

Satish Lele — Thu, 24 Mar 2011 05:14:36 GMT

The explosions at the nuclear reactors at Japan’s Fukushima Daiichi nuclear complex have raised concerns not only about the radiation effects on humans but also about food supplies coming from Japan. Several countries like China, Hong Kong and other Southeast Asian countries have put in place preventive measures to check contamination levels of Japanese food imports.

A nuclear fallout will release radioactive particles into the atmosphere and these will contaminate the surface on which they are deposited. This would mean standing crops, fruit and vegetable farms, grazing land and water sources. This would then find its way into humans if they consume the food directly or indirectly through milk and meat products from animals who consume contaminated vegetation and water.

A number of consumers have been concerned about the safety of Japanese food following the release of radioactivity. They have been asking local retailers about the safety of farm and dairy produce imported from Japan, since most of these products are typically flown in.

Is the threat real?

The current levels of radioactivity reported at Fukushima do not warrant any panic. Moreover the radiation has been contained to with a 20km radius of the nuclear power plant. This area has been completely evacuated so it is unlikely that any farm produce will find its way into the market. However it is extremely important that the situation is not allowed to deteriorate any further, and the authorities are able to contain the disaster at current levels.

Earlier reports indicate high levels of radioactive iodine and cesium in the vicinity of the power plants. Radioactive iodine has a shorter half life so its effect is limited. However half life of Cesium is about 30 years, so its effect is seen over a long period of time. This would effectively mean that the entire area around the 20 km radius will not be usable for a long period of time.

Long term implications

Japan would have to manage the effects of this disaster very carefully, both in terms of how it produces energy safely in the future as well as managing the effects of released radiation in the atmosphere. Consumer perception about safety is very strong and even though the food is eventually determined safe for consumption, it will have an impact in the short term in terms of falling sales. Depending on the eventual severity of the nuclear fallout, it may have serious implications in the longer term on Japanese food products.

On St. Patrick's Day - The unintended consequence of a lost passport, Murphy's Law and a Mosquito...

Noel Anderson — Thu, 17 Mar 2011 16:46:05 GMT

Earlier in the week I was returning home from Zurich when I realised that I had lost my passport. Up until that point, my journey home from the mountains had been perfect and I thought to myself “typical, Murphy’s Law!”

But what is Murphy’s Law? On St. Patrick’s Day, I thought it fitting to debunk a British fallacy linked to this theory, whilst introducing some rather interesting concepts on growth, innovation and leadership…

Murphy is an Irish name, and the Irish have been the source of jokes by the British for a long time, and vice versa. A hackneyed misinterpretation of this law is that it relates to the perceived carelessness of the Irish. But this is a complete falsehood and the phrase is actually American and comes from the warning "if anything can go wrong, it will" associated with Edward Murphy in reference to the incorrect usage of instrumentation in the aerospace industry – please pity the plight of the real life Chimpanzee that was used as a crash test dummy for g-force experimentation!

Another variation of Murphy’s Law is ‘the law of unintended consequences’ – this concept has long existed but was popularised in the 20^th Century by Robert K Merton and comprises of 3 key elements:

Positive – such as Aspirin having the side effect of being an anticoagulant
Negative – irrigation schemes designed to feed the poor that unintentionally create the environment for pestilence and disease
And my personal favourite, the perverse. Here an intended solution to a problem actually makes the problem worse! A loose example of this, on the subject of pests, is The Mosquito...

The Mosquito was released to the mainstream market in 2006, through Howard Stapleton's company Compound Security Solutions. It was marketed as a safety and security tool for preventing youths from congregating in specific areas. As such, it was promoted to reduce anti-social behaviour. Ironically, the kids cottoned on to an unintended application and now it’s a best selling ring tone! As adults cannot hear these bleeps and ringtones, our youth are covertly using their phones at home and school to communicate and convene, as they plot future revolutions and misadventure!

But necessity is the Mother of all invention, and adjacent technologies will always be found for existing products and technologies. So what will be the social trends of the future that will drive consumer demand for new innovation, products and services…and their unintended consequences?

In May 2011, Frost & Sullivan’s Global Community of Visionaries, Innovators and Leaders makes its return back to London. GIL 2011: Europe - The Global Community of Growth, Innovation and Leadership annual congress will be held at my fantastic football team’s home stadium, the Emirates. Over 400 CEO’s and their management teams will spend two days sharing, engaging and inspiring one another with new ideas and fresh perspectives about driving growth and innovating their way to the forefronts of their industries. These executives will explore the radical changes being driven by global mega trends, cross-industry convergence, new and emerging business models and, most importantly, how to implement these innovations for future growth.

The communities 24x365 mission is to support senior executives with the necessary tools and strategies that will enable them to better leverage innovation as a resource to address global challenges. The following video captured at GIL 2010 in the States serves as a great lead to introduce the value of GIL, so feel free to view and forward it on http://www.gil-global.com/gilnews_meetheboss.html

I will of course be there and would love to meet you to discuss these and many other topics – reach me on noel.anderson@frost for further details.

So, what happened to my flight? Did I miss it? Am I writing to you from the airport bemoaning my hard luck and the curse of Murphy’s Law? Well no. It turned out that I had a four leaf clover in my pocket that day. 5 minutes after realising that I had lost my passport, a very kind chap by the name of Robin saw me walking along in a state of panic, approached me and said “If your name is Noel, then this is your lucky day!”. On the journey home I learned that Robin is a carpenter and now he is going to build some long overdue shelves for my house – what a great positive outcome for an unintended event; and the Wife is happy too! Thanks for reading – Noel out!

Mining text - A new way to increase ROI and reduce churn

Avinash Bhaskar — Thu, 03 Mar 2011 19:24:04 GMT

I recently started with a new research on exploring the exciting technology area of text mining. The more I have learnt about the technology, the more I have realised the wonderful implications that it could potentially have on such multi-billion dollar sectors such as retail, banking & financial sector and healthcare.

What the heck is text mining??

Text mining unlike the more established data mining is all about looking for business values in unstructured data, which is any data that exists in textual format such as e-mails, blogs, word documents and many many more. Essentially, what I am saying is; if you love your business and want to stop customer churn and want to improve the relations with your customers and since more than 80% of the data exists in textual format and then text mining tool is the right software for you. Text mining tools are marketed as social media monitoring tools or listening platforms , mainly because these tools help scan the entire web to identify who is the influencer behind a conversation, what are customers saying about your company and what do they expect from a product or in other words do they have good or bad opinion about a product. Now, these are some very nice information to have for enterprises if they want to reduce customer churn and provide better customer service. Even traditional business intelligence/data mining vendors such as SPSS and SAP have come up with text mining modules that integrates well with their bigger data mining platforms.

Ok.. now I get it, but who are the vendors?

Currently the market is crowded with text mining vendors. These vendors could market themselves as social media monitoring tool vendors or listening platform vendors. Lithium Technologies, Radian6 and Clarabridge are some of the leading vendors (there are many more with different bragging rights and rightly so!). Their tools are extremely user friendly as these can be used by anyone in the organisation. Their dashboards can help visualize the collected data in real time, can provide charts and figures on the data collected .. essentially they help in making sense on the tons of data that was collected by crawling through web and other data sources. The sentiment tools help in rating if an opinion expressed by the customer on a product or brand is positive or negative. Although there are some limitations which are associated with sentiment analysis tools such as irony and sarcasm!.

What if I want to get into the market?

The total market for text mining tools is growing in double digits. We estimate that the current market size is about $400 million globally and could grow to reach a billion dollars in the next five years. Ofcourse, the addressable multibillion dollar markets could take the market revenues from text mining tools much higher provided these addressable markets adopt text mining tools rapidly. I recommend that they do!.

Overall, the path for text mining tools is extremely rosy considering how consumers are adopting social media to express anything .. starting from when they went to take a shower to deliberating extensively on how ipad2 rocks!.

Now I am off to exploring the mega market of tools to mine structured data!.

Game on in the Global Membrane Bioreactor (MBR) Market with the entry of LG with its Green MBR product

Fredrick Royan — Fri, 26 Nov 2010 11:24:40 GMT

The Global MBR Market has received a rather expected member in the form of LG Electronics, which has announced the launch of its Green MBR system (http://www.lg.com/global/press-release/article/lg-unveils-first-mbr-process-for-wastewater-treatment.jsp)

The key features of the LG Green MBR is the flat sheet MF membrane configuration and claims to be have a significantly smaller footprint but the full details of the MBR product are yet to emerge.

We have been tracking the evolution of the MBR market since 2005 when we published the European MBR Market study and estimated the market to be about $62.5 million in 2005 with a double digit CAGR of around 11 percent. We further upgraded our MBR analysis with the Global MBR Market study in 2008 and estimated the global market to be around $500 million and still continuing with a strong double digit CAGR.

The growth momentum of the MBR has continued to have the committment of the established players with increased investments in improving the MBR products and development of new innovative variations. The increasing success of MBR in the industrial sector has further upped the appetite of both industry, suppliers and investors alike.

In the case of LG Electronics, the launch of the new Green MBR is seen a first stepping stone in the Global Water Market and the focus on the near term appears to be on technology solutions for water & wastewater treatment in the industrial sector. The success in this sector is expected to influence its planned progression into the municipal sector and also further up the value chain to shift its image from a OEM/water technology supplier to more an EPC player in the Global Water Market.

The entry of companies such as LG Electronics will most certainly stir up the competition but will also bring in a breath of fresh air and the much needed urgency of innovation in this otherwise conventional set-up.

Global Ballast Water Treatment Market Gathers Steam with major contract in large vessel segment

Fredrick Royan — Mon, 16 Aug 2010 16:10:25 GMT

Frost & Sullivan had earlier this year published a report on the Global Ballast Water Treatment market and indicated a sizeable market opportunity of more than $30 billion over the next 10 years.

The International Maritime Organisation (IMO) International Convention on for the Control and Management of Ships Ballast Water and Sediments adopted in 2004 is the key driving force of this high potential market. The convention is still in the ratification process and could soon gain the necessary numbers in terms of signatory nations and turn into binding legislation.

However, there appears to be a sign anticipation, especially in the large tankers/vessels segment of the shiping industry that is leading to ship owners taking the plunge and placing contracts to install ballast water treatment systems aboard the vessels. Oceansaver has proved to be highly successful in this segment by securing contracting of providing ballast water treatment systems for 17 vessels in the large tankers category.

With less than 5 countries neeeded to complete the ratification of the convention, it is the right time for ballast water treatment system suppliers to position themselves in the appropriate segments of the shipping industry. The certififying agencies of ballast water treatment systems have been kept very busy over the first half of this year and as we head into the autumn, we could see some of the established ballast water treatment systems suppliers launching new products and setting themselves with a good launchpad for growth in this market.

2020 Vision - Global Food & Beverage Industry Outlook

Christopher Shanahan — Mon, 16 Aug 2010 11:12:40 GMT

The global demand for Food & Beverage products reached $US 11.6 Trillion in 2009 and is likely to reach $US 15 Trillion by 2014. Accounting for significant share of the global economy, the Food & Beverage industry’s health is critical and intricately tied to the health of the entire economy as a whole. Within the Food & Beverage industry, companies currently, and will continue to, face a wide array of external challenges that have a direct impact on the industry’s overall performance and are beyond the control of each individual company. Regulatory and/or policy changes, trade barriers, demographic changes, and changes in the competitive landscape are all examples of these external challenges and it is increasingly important that companies effectively identify, track, and react to their ever changing business environment and adopt and implement strategies that ensure that the company comes out on top. These challenges can be threats to some companies that are incapable or unwilling to adapt to changes in its external environment and thus they will lose market share. To other companies these same external challenges can be an opportunity for other companies that are willing to proactively face these challenges and adapt.

With respect to the global Food & Beverage industry, the three primary industry challenges facing companies at present and will have a direct impact on industry growth and performance include: Increasing Globalization and Changing Economics, the Growing Need for Health and Wellness Solutions, and the Growing Sensitivity to Food Safety and Sustainability Issues. By 2020, companies that has a truly global market and product strategy, that fully exploits the growing demand for health & wellness, and that has adopted an all-encompassing sustainability and safety strategy will come out on top and be the global leaders of the Food & Beverage industry.

Over the next several blog articles, I will provide more detailed analyses of these key megatrends and then I will follow up with a set of key strategic recommendations that will help any company interested to being on top get there.

Clean Coal, Dirty Coal

Sapan Agarwal — Fri, 30 Jul 2010 02:35:53 GMT

Despite repeated urging from environmental activist to employ renewable energy for energy needs, coal remains and will likely continue to remain a key source for power generation in Asian countries. Reasons - abundance (296.9 thousand million tons) and wide distribution (43 percent of primary energy needs and 54 percent of the electricity in Asia-pacific countries are met by coal)

Nonetheless, the coal fired electricity plants; despite being the most popular form of energy source are also the most belittled because of emissions of particulate matter, NOX, SOX, and Carbon Dioxide - Carbon dioxide being the largest pollutant from coal fired units (the units in Asia-Pacific produce 4.5 billion tons every year contributing significantly to the greenhouse effect because of its global warming potential (GWP) value.)

As a combat measure, the two clean coal technologies that are proactively being promoted in the AP-6 partnership are the Carbon Capture and Sequestration (CCS) and Integrated Gasification Combined Cycle (IGCC) because of their ability to contain carbon dioxide. These two clean coal tools have proved to be technically sound and competent to capture and re-route carbon dioxide emissions from coal fired plants.

Nonetheless, I believe, the CCS and IGCC are not going to replace the existing tools to contain pollutants spewed from coal fired electricity units. It needs to be acknowledged that fossil fuel as an energy source in Asia pacific countries is here to stay. That being said, clean coal technologies are likely to complement the available air pollution control equipment. The present limitation to getting a toehold in the coal fired electricity generation market is the high capital cost of these future tools. An emission trading mechanism among industries may give IGCC and CCS the appropriate impetus for market entry and terrain to combat the greenhouse problem marked by carbon dioxide emission.

Is a Rand devaluation warranted?

Tatenda Zingoni — Wed, 12 May 2010 16:14:36 GMT

Recent pronouncements by labour (Confederation of South African Trade Unions - COSATU) and some parts of business for the adjustment of the R/$ exchange rate to a rate of 9 or 10.5 have to be taken with caution. Though their arguments are somewhat warranted i.e. that the rand is overvalued (currently trading at around 7.5), stipulating a particular rate for which the rate should be pegged is not the solution.

South Africa's economic structure is currently heavily skewed with the tertiary (services) sector accounting for more than 55% of contributions to the GDP - with financial services ruling the roost. An attractive interest rate regime makes South Africa an attractive destination of portfolio investments. The large inflows and outflows of such funds account for a significant impact on the country's exchange rate.

Calls by labour to devalue the currency are mainly aimed at wanting to stimulate the export industry i.e. making South African exports less expensive. The hope is for an increase in the employment levels in the country. Currently the official unemployment figure is sitting slightly above 25%.

It should however be noted that due to the earlier mentioned structural imbalances, absorption of labour in South Africa is currently difficult. There is a large pool of un-skilled/semi-skilled labour which can not be matched with the economy's set up. South Africa is therefore mainly characterized by structural unemployment.

Calls for the devaluation of the currency would need intervention by the South African Reserve Bank (SARB) in the financial markets, which would mark a departure from existing policies. As it stands, the calls by labour and some parts of the business community are anticipated to remain just that...calls with no one answering.

Economic Impact: Cutting Costs? What you don't see.. may hurt you!

Donald Savant — Mon, 10 May 2010 13:14:08 GMT

Most companies are feeling the effects of the economic downturn. The mantra echoed around the world, "Cash is King," triggered companies to activate cost cutting measures of all kinds; budget cuts, re-organization, down-sizing, et. al. And now that there is a little uptick within certain markets, companies watch with bated breath to see if they made the right moves.

I was inspired to investigate this phenomenon while speaking with a colleague about the current selling environment and the challenges therein. "Fulfillment is becoming an issue…sales and marketing are now able to get the sale, but companies are having a hard time being able to deliver (their products or services)." For the purpose of this article, "products and services" means anything from ability to deliver on the value proposition, to order fulfillment, to new product or service innovations. Anyone that looked at this topic prior to our current downturn found the story of Home Depot from the past recession very compelling. Let me recap… Home Depot’s long-tenured knowledgeable staff (ex-contractors, handymen, and home improvement professionals) was crucial to delivering the company’s value proposition. Its cost-cutting included a reduction in these employees and the hiring of less experienced part-timers. Home Depot failed to realize the impact this would have on its ability to deliver its value proposition to its core customers, as well as the impact on its own employee culture and values, and saw shrinking customer loyalty as a result. Since then, Home Depot has re-established a foundation for continued growth, after addressing what is core to its beliefs.

Other examples exist and I could go on; however, the impact of trimming budgets truly is contextual to your particular market and business. I simply wanted to draw your attention to this phenomenon. Columbia Business School professor Rita McGrath speaks more in-depth on Home Depot and other examples in her March 9, 2009 Harvard Business Review blog entitled "A Better Way to Cut Costs." Also, there is information out there and numerous articles on "how to manage your business in a recession." Point is, companies must evaluate strategy and establish goals post-recession to avoid the unforeseen impact of reactionary, yet necessary, cost-cutting measures. I too watch with bated breath to see who made the right call, what the most successful strategies were, and who will be the winners and losers coming out of this recession.