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Title: GOVERNMENT & DEFENSE OFFICE AUTOMATION
Title: GOVERNMENT & DEFENSE OFFICE AUTOMATION
Title: GOVERNMENT & DEFENSE OFFICE AUTOMATION
Title: GOVERNMENT & DEFENSE OFFICE AUTOMATION
Title: GOVERNMENT & DEFENSE OFFICE AUTOMATION
Title: GOVERNMENT & DEFENSE OFFICE AUTOMATION
Title: GOVERNMENT & DEFENSE OFFICE AUTOMATION
Title: GOVERNMENT & DEFENSE OFFICE AUTOMATION
U.S. Business Plan 1984
U.S. Business Plan 1984
U.S. Business Plan 1984
U.S. Business Plan 1984
U.S. Business Plan 1984
U.S. Business Plan 1984
U.S. Business Plan 1984
U.S. Business Plan 1984
Prepared for: System Group
Prepared for: System Group
Prepared for: System Group
Prepared for: System Group
Prepared for: System Group
Prepared for: System Group
Prepared for: System Group
Prepared for: System Group
Prepared by: Troels Myram
Date: March 1984
T̲A̲B̲L̲E̲ ̲O̲F̲ ̲C̲O̲N̲T̲E̲N̲T̲S̲
SUMMARY ..........................................
2
1 THE U.S. MARKETING DECISION ....................
5
1.1 BUSINESS OBJECTIVES ........................
5
1.2 TIME SCALE .................................
6
1.3 NATURE OF PLAN .............................
6
2 BACKGROUND/SITUATION ANALYSIS ..................
7
2.1 RESOURCE OVERVIEW ..........................
7
2.2 THE MARKETPLACE ............................
9
2.2.1 Export Potential Assessment ...........
9
2.2.2 Competition ............................
10
2.3 PRODUCT RANGE .............................
14
3 EXPORT STRATEGY PLAN ...........................
15
3.1 OVERALL MARKETING STRATEGY .................
15
3.2 TARGET GROUPS ..............................
16
3.3 MARKET ENTRY DECISION ....................
17
3.4 ORGANIZATION ...............................
18
3.5 PRICE POLICIES .............................
19
3.6 PROMOTION PROGRAM .........................
21
3.7 REPORTING ROUTINES .........................
24
3.8 APPROVAL PROCEDURES ........................
25
3.9 INSTALLATION, MAINTENANCE AND USER GUIDANCE
26
4 TACTICAL PLAN ..................................
27
4.1 ACTION STATEMENTS ..........................
27
5 QUANTITATIVE ESTIMATES .........................
28
5.1 SALES FORECASTS ............................
28
S̲U̲M̲M̲A̲R̲Y̲
This Business Plan outlines the objectives and strategy
behind the idea of launching a Government & Defense
Office Automation (G & DOA) concept in USA, with basis
in the sales offices in Washington DC and Thousand
Oaks.
The backbone product in any office automation concept
is a data network in the form of a Local Area Network
(LAN) by which workstations and servers are integrated
into one highly user fiendly and intelligent DP system
offering full resource and information shwaring in
order to automate the manual paperwork on offices of
today, with regard to typewriting, budgetting, storing
and retrieval of information, time planning etc.
CR is heavily committed to supply a line of product's
which together forms a Office Automation system. The
backbone network which is the essential part of the
socalled CROS project, is X-Net.
Because the LAN is the essential part of any suppliers
OA concept, competition will be highly related to the
individual LAN concepts. Therefore, most of the discussions
in this concept are related to X-Net.
Business opportunities are evidently vast in the U.S.LAN
market in the years to come - but it's a fast pace,
highly competitive climate that leaves foreign entries
little space.
But X-Net apparently has the unique concept features
that could open the G&DOA market for Christion Rovsing
A/S in the U.S.
The resources to go through with the venture are unfortunately
tight, but the plan tries to cope with the consequences
of that problem.
The person responsible for the G&DOA implementation
is TMY, leaving Denmark around April 1st, 1984. During
the 4 month start up cycle, he will be without effective
technical support, but System Group of CR A/S will
assist to the extent possible and pending demand.
As to the market entry decision, a major thrust will
initially be put on direct sales, backed by direct
mail shots, seminars and active public relation such
as frequent product enhancement announcements in the
press. OEM contractors will have second priority and
no exclusivities will be negotiated
Target groups will consist of Government and Defence
departments with mixed dp environments, having high
rates of terminals per number of employees. The market
is dominated by Wang and IBM OA equipment which must
be supported by CR.
Market price policies are based on the experiences
gained from the Scandinavian LAN situation today.
On a short term basis the most profitable sales will
be obtained by allocating the G & DOA sales force to
CR-CORP. CR-CORP can allready presently provide office
facilities, secretarial services, system support and
technical support.
On a longer term basis, it will be more profitable
to allocate the sales force to CR-DC. When this allocation
takes place, investments has to be done in office facilities
(incl. demo room), secretary assistance and technical
support.
The X-Net components will have to be approved by Underwriters'
Laboratories (UL) before any installations can take
place. S̲t̲e̲p̲s̲ ̲m̲u̲s̲t̲ ̲b̲e̲ ̲t̲a̲k̲e̲n̲ ̲n̲o̲w̲ t̲o̲ ̲s̲o̲l̲v̲e̲ ̲t̲h̲i̲s̲ ̲c̲o̲r̲p̲o̲r̲a̲t̲e̲
̲i̲s̲s̲u̲e̲ ̲-̲ ̲c̲r̲u̲c̲i̲a̲l̲ ̲t̲o̲ ̲t̲h̲i̲s̲ ̲a̲n̲d̲ o̲t̲h̲e̲r̲ ̲C̲R̲A̲S̲ ̲v̲e̲n̲t̲u̲r̲e̲s̲ ̲i̲n̲
̲t̲h̲e̲ ̲U̲.̲S̲.̲
It must be decided to wire up CR-CORP and CR-Washington
with X-Net, integrating as much of the company's dp
equipment as possible and let it serve demo net purposes.
Broadband LAN technology is requested by all major
G & DOA project groups why it is crucial for CR to
implement a release plan according to schedules of
these project groups, i.e. first X-Net broadband release
ultimo 1984.
Several MIL standards exists with regard to protocols
and data security which CR must follow.
The quantitative estimates show all year 1984 sales
results of no less than US$ 780 K divided on 3rd and
4th quarter periods.
If those firgures are realized, the U.S. venture has
certainly fulfilled its primary objectives, namely
to increase the Group's overall sales and profit volume,
thus contributing to the Company's general expansion
and enlarging the sales base to absorb R&D expenses,
thus ensuring the neccessary capital in.flow to help
continously offer state-of-the-art technology.
Finally, a very important longer-range perspective
is the chance of CR-CORP and CR Washington becoming
SG's, or CRAS's for that matter, number one base for
high-volume distribution of a range of standard data
processing and communication products, being the doorstep
to the world's largest market.
1̲ ̲ ̲T̲H̲E̲ ̲U̲.̲S̲.̲ ̲M̲A̲R̲K̲E̲T̲I̲N̲G̲ ̲D̲E̲C̲I̲S̲I̲O̲N̲
1.1 B̲U̲S̲I̲N̲E̲S̲S̲ ̲O̲B̲J̲E̲C̲T̲I̲V̲E̲S̲
All business activity requires an initial c̲o̲m̲m̲i̲t̲m̲e̲n̲t̲
involving a certain expenditure of time, effort and
money. In making such a sincere commitment, the company
signifies a willingness to accept reasonable risk in
return for the chance of increased sales and profit.
Christian Rovsing A/S (CR) senior management has at
several occasions stated that the United States will
be the price expansion area for the company in the
80'ies. The market is virtually unlimited for CR's
product range now and onwards.
At the same time, the X-Net local area network forms
the backbone of CR's Office Automation strategy (CROS
project). The product is a fine example of the company's
ability to offer leading-edge technology on the international
DP market.
The two factors naturally lead to the idea of launching
X-Net in the U.S. This particularly so, since CR (SG)
already has an established subsidiary office in two
of the most attractive markets in that country, California
and Washington DC. The latter especially with regard
to the penetration of the G&D market.
However, a̲ ̲s̲e̲r̲i̲o̲u̲s̲ ̲U̲.̲S̲.̲ ̲e̲n̲t̲r̲y̲ ̲i̲s̲ ̲a̲ ̲m̲a̲j̲o̲r̲ ̲t̲a̲s̲k̲ ̲f̲o̲r̲ ̲a̲n̲y̲
̲c̲o̲m̲p̲a̲n̲y̲ ̲t̲o̲ ̲u̲n̲d̲e̲r̲t̲a̲k̲e̲ ̲a̲n̲d̲ ̲s̲o̲ ̲i̲s̲ ̲t̲h̲e̲ ̲i̲n̲v̲e̲s̲t̲m̲e̲n̲t̲.
SG's primary objectives to introduce X-Net in U.S.
are to:
1. Increase the Group's overall sales and profit volume,
thus contributing to the company's general expension
rate.
2. Enlarge the sales base to absorb R & D expenses
and ensure the necessary capital to continously
offer state-of-the-art technology.
3. Acquire knowledge about the international competition's
product development and business activity in SG
product areas.
1.2 T̲I̲M̲E̲ ̲S̲C̲A̲L̲E̲
This business plan will primarily focus on the activities
during the 4 month launch period, but does of course
have a longer - more important - overall perspective.
The trigger point of the plan is April 1, 1984.
1.3 N̲A̲T̲U̲R̲E̲ ̲O̲F̲ ̲P̲L̲A̲N̲
The purposes of the plan are two:
1. Secure the most rational use of time and money
during the trial-type sales period.
2. Make sure that SG management and the U.S. transferee,
Troels Myram (TMY), agree on all strategic and
tactical aspects before the U.S. marketing starts.
Based on very limited information about the U.S. G
& D marketplace for Local Area Nets, the plan starts
off by briefly surveying this in a B̲a̲c̲k̲g̲r̲o̲u̲n̲d̲/̲S̲i̲t̲u̲a̲t̲i̲o̲n̲
̲A̲n̲a̲l̲y̲s̲i̲s̲, which also roughly outlines current SG resources
and specifies the product range entended sold from
day one.
Subsequently, a S̲t̲r̲a̲t̲e̲g̲y̲ ̲P̲l̲a̲n̲ deals with the major
marketing parameters, such as market entry decision,
price policies, promotion program and reporting routines.
Those two sections constitute the platform for the
T̲a̲c̲t̲i̲c̲a̲l̲ ̲P̲l̲a̲n̲, which specifies individual action items
at given dates and charges.
The entire Business Plan is rounded off with some Q̲u̲a̲n̲t̲i̲t̲a̲t̲i̲v̲e̲
̲E̲s̲t̲i̲m̲a̲t̲e̲s̲, including sales forecasts in dollars and
in components.
2̲ ̲ ̲B̲A̲C̲K̲G̲R̲O̲U̲N̲D̲/̲S̲I̲T̲U̲A̲T̲I̲O̲N̲ ̲A̲N̲A̲L̲Y̲S̲I̲S̲
2.1 R̲E̲S̲O̲U̲R̲C̲E̲ ̲O̲V̲E̲R̲V̲I̲E̲W̲
Examining SG's internal structure and resources reveals
a tight financial situation, limited export personnel
and technical organization, production and assembly
facilities in a stage of unsettleness, and scarcely
any past experience with the product line in question
in its present form (in the U.S. G&D market).
B̲u̲t̲, the X-Net concept seems unique in today's Local
Area Network market (see section 2.2.2) and SG does
have subsidiary/office in the centres of the U.S. G&D
marketplace, so with the right man (men) sent over,
hard work (and some luck) could lead to a few major
installations during 84, and once in the market, the
organization can expand in line with capital in-flow.
An organizational chart of CR's current U.S. operations
(excluding FCS and Boston LSI manufacturing company):
̲ ̲ ̲ ̲ ̲
C̲R̲-̲D̲K̲
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
C̲R̲U̲S̲A̲ ̲I̲N̲C̲
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
C̲R̲C̲S̲ C̲R̲-̲C̲O̲R̲P̲
̲ ̲ ̲ ̲
̲
C̲R̲-̲D̲C̲
F̲i̲g̲u̲r̲e̲ ̲1̲:̲ ̲C̲R̲ ̲i̲n̲ ̲t̲h̲e̲ ̲U̲.̲S̲.̲ ̲t̲o̲d̲a̲y̲.̲
CR-CORP was established January 1978 and is located
in Thousand Oaks, California. CR-CORP has put all its
efforts into marketing of projects in the defence market.
The strategy is to take subcontractor responsibility
for orders typically in the range of 100-500 K $. CR-CORP
employes approx. 15 persons.
CR-DC was established August 1983 and is located in
Washington DC. CR-DC works after the same marketing
concept as CR-CORP except that CR-DC, - on behalf of
SG, - is heading for maincontractor responsibility
for orders typically exceeding 5 M $. CR-DC employs
2 persons.
CRCS was established (in its present form) in September
1983 and is located in Los Angeles, California.
CRCS is marketing X-Net in the commercial market (industrial
market) in California. CRCS employs 3 persons.
2.2 T̲H̲E̲ ̲M̲A̲R̲K̲E̲T̲P̲L̲A̲C̲E̲
2.2.1 E̲x̲p̲o̲r̲t̲ ̲P̲o̲t̲e̲n̲t̲i̲a̲l̲ ̲A̲s̲s̲e̲s̲s̲m̲e̲n̲t̲
Contemplate the aggregate: (source: IDC Survey, jan
1983)
** U.S. white-collar workers today number some 52
million. By 1986 there may well be another 3 million.
** Over the next 5 years, U.S. business will spend
over 5 trillion dollars on whith-collar salaries,
and the possibilities for leverage through electronics
is vast.
** The population of keyboards - electronic typewriters,
word processors, desktop computers, terminals and
SBCs - in the U.S. will reach 40 million in 1986.
Half of these devices will blanket the clerical
work force, the other half will disperse among
professional and technical workers, managers and
administrators and salesmen.
** U.S. spending for advanced office gear should swell
from nearly US$ 3 billion in 1981 to more than
US$ 12 billion in 1986. Local area networks are
supposed to take up an increasing part of the stake.
Dozens of corporations are vying for pieces of the
action. A.T. & T., IBM, XEROX and WANG have declared
"the office of the future" a key to their success.
Trouble is, ever since the mid 70ies, "the office of
the future" has been perceived as sort of promised
land, but few major customers have yet ventured to
buy the dream af applying computer power to office
work by putting a keyboard and a monitor on almost
evertybody's desk and connecting all these to integrated
networks.
But assumedly there is no turning back - end users
are too hungry for processing power. They will increasingly
demand distributed processing systems with extensive
communication facilities. But wielding computer power
in a realm where productivity management is ilusive,
where no single technology or standard dominates, and
where vendors come and go all the time, is tricky.
Presently, WANG dominates the office market with Micro-
and minicomputers. Support of WANG equipment is therefore
of key importance for a LAN vendor hading for the OA
market.
But once the previously mentioned armada of devices
are in place, or even with today's installed base,
the lust for their interconnection is inevitable. However,
the management of the companies will request sure-fire
proof that full device connectivity will pay off. Cost
justification will be t̲h̲e̲ bugbear of local and wide
area networking.
Nonetheless, whth US$ 200 billion worth of computers
and office automation equipment installed today - and
more than that in software investment - the U.S. G&D
has a base large enough to justify X-Net action now.
As indicated, local area networking is very much in
its infancy, but already by 1984 the number of systems
connected will be approaching 500.000 in the U.S. (comparing
with some 300.000 in Europe).
The establishment of CR-DC should bring CR in closer
touch with the decision makers within the G&D market.
Another important aspect is that - to our knowledge
- the Americans are more apt to make conceptually based
bying decisions than the Europeans.
But having acknowledged that the total market potential
for LANs in the U.S. is huge in the years to come,
we have at this moment no substantial information about
the accessability with X-Net to the market. In other
words, stating CR's sales potential is at the time
being associated with at lot of uncertainties (cf.
section 5.1), although next chapter gives some indications.
2.2.2 C̲o̲m̲p̲e̲t̲i̲t̲i̲o̲n̲
Let there be no doubt - we are in for the stiffest
competition of all industries in all markets, selling
networks and microcomputers/terminals in U.S.A.
Till now, baseband products have dominated the market,
led by Xerox/DEC/Intel. Ethernet technology has been
licensed to more than 120 companies, including H.P.,
Olivetti, Nixdorf, Harris and other major firms. But,
buying the license fee is not necessarily a commitment
to adopt it in one's integrated office product strategy.
G&D offices planning OA for the next decade are planning
with broad-band based LAN only. An X-Net broadband
implementation plan is therefore a must in order to
qualify CR for these major long term OA contracts.
Figure 2 on the this page lists Ethernet and other
significant nets on the U.S. marketplace today. (Source
is "Report on Local Communications", The Yankee Group,
December 1981). Subsequently, brief notes are given
on advantages and disadvantages for each product.
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲…06…1 …02… …02… …02…
Vendor/Manufacturer Network Estimated
Number
of connection
by
yearend 1983
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
1-a Xerox Corp. Ethernet
1-b DEC Ethernet
DECnet 140.000
1-c Intel Corp. Ethernet
1-d Ungermann-Bass NetOne
5.000
1-e Zilog Z-Net
5.000
2 Datapoint ARC
net
90.000
3 Sytek LocalNet
50.000
4 Prime PrimeNet
20.000
5 Network System Hyperbus
Hyperchannel
8.000
6 Racal Milgo Planet unknown
7 Logica Polynet unknown
8 Wang Wangnet
5.000
9 Digital
Microsystems HiNet unknown
10 Internet Internet unknown
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
Figure 2 - Major Network Vendors on the U.S. Market
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
E̲t̲h̲e̲r̲n̲e̲t̲'̲s̲ advantages include a strong following among
large data processing and communication manufactures,
a very professional marketing campaign (Xerox !) spending
millions of dollars on advertising and PR, and a strong
standards lobby. The primary disadvantages rest within
the CSMA/CD access method itself (in the terminal network
market) and it's dependance on DEC's and Xerox's dp
product introductions. Xerox claims, though, that its
Ethernet system will be simple for other manufacturers
to hook into.
The very agressive U̲n̲g̲e̲r̲m̲a̲n̲n̲-̲B̲a̲s̲s̲ company and Z̲i̲l̲o̲g̲
are also of the Ethernet Family. NetOne is clearly
the most sophisticated of the two, and claim to have
over 200 installed customers around the world.
D̲a̲t̲a̲p̲o̲i̲n̲t̲ has been in a state of flux for some time,
namely ever since their profits started to slide and
they tried to change their organization dramatically.
But Datapoint has a lot of ARC nets up and running,
giving them substantial network experience. And their
concept, though several years old, is still very attractive
(4th generation). Their RIM (Resource Interface Module)
chip now also allows Tandy's TRS-80 series of microcomputers
to attach, being the first step towards a more open
net. The company will continue to be an important force
in the LAN/WAN market.
S̲y̲t̲e̲k̲ has exploited the simple idea of contributing
packet switching techniques and frequency modulation,
but also use the coaxial cable bus architechture operating
under CSMA/CD. They have quite a number of installations,
and Sytek's future prospects are enhanced by its high-speed,
frequency agile modems.
P̲r̲i̲m̲e̲N̲e̲t̲ first and foremost provides links for Prime
computers, but supposedly also for computers from other
vendors, and with terminals and computers attached
to packet switching X.25 networks. Prime has a large
customer base of its own to work on initially.
HyperBus from N̲e̲t̲w̲o̲r̲k̲ ̲S̲y̲s̲t̲e̲m̲s̲ ̲I̲n̲c̲.̲ provides terminal
networking at rew speeds of 10 Mbps and HyperChannel
allows processor-to-processor links at raw data transfer
rates of 50 Mbps. HyperChannel is complemented by Netex,
a software system for multimegabit data communication
bet
