During the last eight years our team of experienced professionals have conducted mandates for firms with a variety of state-of-the-art technologies targeting the latest emerging markets. In staying ahead of the technology envelope, our current areas of focus include:

Web-enabled financial services applications
eCRM and eSupport
Internet security
Network management, middleware & infrastructure
Entertainment technologies

Photonics
Sensors
Robotics
Rapid prototyping

Microelectronics & PCBs
CTI & Web Telephony
Wireless communications
Medical Devices

Sygertech has been working with companies serving information technology, industrial and commercial markets with innovative technologies and services since 1992. Sygertech helps grow their businesses by ensuring that strategic objectives are completed predictable on time and budget. Objectives include:

• Marketing strategies for entering new markets
• Marketing strategies for introducing new products
• Marketing strategies to resume growth
• Marketing strategies to improve competitive positioning
• Qualifying potential partners or acquisition candidates

The focus of Sygertech's offering is to quickly frame the critical management issues, and to support decision-making through the collection, analysis, and presentation of timely and thorough market information gathered through expert interviews with opinion leaders in the industry. Sygertech's consultants make the effort to contact executives of competitors, potential partners, major customers, and industry opinion leaders such as other consultants or journalists to get to the real opportunities for growth.

Successful industrial and commercial product and service firms tend to have sales and marketing capabilities that are highly tactical and that adapt incrementally to changing market conditions. During growth periods, internal marketing capacities are used for facilitating sales and shortening the sales cycle. Although managers may be aware of key trends impacting the future, resources are focused on delivering to current demand rather than planning for the future.

At critical development points the firm may experience slower growth or a reduction in margins. Causes include market saturation, pressure from growing competitors, and strong new entrants with substitute products and technologies. The firm may need to improve market focus and make radical changes to the marketing mix to ensure that the value proposition is aligned with the buyer's expectations. When markets are saturated, the firm may need to diversify either in terms of markets served or its product offering. At these points of discontinuity, consulting services provided by Sygertech can be of significant value.

Sygertech's 3-step approach for developing strategy begins with the end in mind. A concise hypothetical model of the solution and available options are rapidly prepared based on organizational knowledge that is formed by the expertise of the consulting team. From this initial hypothesis, critical assumptions are identified, and an external validation process is designed and executed. When properly scoped and applied, this process will produce the desired objective in a predictable timeframe rapidly eliminating dead-end strategies, and enriching the solutions that lead to new opportunities and improved performance. This is carried out iteratively by:

1. Leveraging organizational knowledge - where Sygertech facilitates the rapid and complete collection of critical knowledge used in the formulation of strategy and ensures that the people with the knowledge participate fully, and that time is not wasted.
2. Building strategic models - where Sygertech develops a comprehensive description of the current and proposed strategic orientations of the firm along with key assumptions and concerns.
3. Validating from the outside in - where Sygertech engages in a process of discovery in the market that validates winning strategies, uncovers new opportunities, and destroys corporate myths.

Internal interviews and meetings are directed at establishing a baseline for critical market knowledge, and at rapidly developing solid options for future actions. A critical success factor for the process is buy-in by the CEO, and the CEO's active participation in communicating the purpose and benefits of the process to the management.

Once they understand the context, managers are privately debriefed on critical dimensions and their contributions remain confidential. In order to give their best contribution to the process, participating managers must believe in the integrity of the consulting team. Specifically, that confidential information will not be shared outside the firm, and that sensitive internal information will be used constructively, not politically.

The information is analyzed according to Sygertech methods, and a draft strategic hypothesis with options is produced. A management team meeting is held that is focused on the critical issues facing the firm. The benefits of this approach include:

• Reach consensus without wasting time - Achieve a breakthrough on the key issues facing the company based on current knowledge with minimum management time.
• Eliminate dead-end initiatives - Weed-out strategic initiatives that are diluting management effort and that have little chance to create value.
• Improve communication - Improve team dynamics and trust by providing an opportunity for results-oriented group discussion on key issues.
• Decide on an action plan - Move forward on obtaining missing information to make key decisions grounded on everyone's contribution. Now that the key questions are formulated, Action Research is used to obtain the necessary information to drive a final decision.

Sygertech's consultants have strong analytical skills and excellent interpersonal skills. They are aggressive when necessary in obtaining the cooperation of key managers, and in keeping meetings strictly on track.

The next step in the process is to apply analytic frameworks for building strategic models. Four basic models are used:

Portfolio Analysis

Technology driven firms often have a portfolio of products or technologies all vying for scarce resources needed to turn ideas into business opportunities. The challenge is determining which product or technology should be given priority in order to eliminate wasted effort and maximize results.

Sygertech's Approach: Sygertech quickly develops a hypothesis with the client to categorize the products according to the competitive strength of the client versus the attractiveness of the market. Given this high visual and intuitive presentation, critical assumptions are uncovered, and missing information is identified so that a focused research program can be designed to validate the hypothesis.

Competitive Positioning

In many industrial and commercial markets, usually only the top 2 or 3 competitors are profitable and growing while the rest are struggling. Winners must focus on the right customers, make attractive offers, win mind share with channel partners, and keep on the leading edge of technology development.

A critical issue to resolve is often what role a particular company can play in highly competitive markets. For example, is the company a long-term player that will consolidate the industry, or should the plan call for a strategic sale to an industry leader?

To be in the winner's circle requires a thorough understanding the playing field and how the industry is evolving in time.

Sygertech's Approach: Early detection and understanding of trends are key to uncovering competitive business opportunities. Trends include technology innovations, technology convergence, mergers and acquisitions, regulations, etc.

With the opportunities clearly in focus, Sygertech takes in-depth competitor intelligence and derives the key competitive variables to build a competitive map. Positioning involves the client's management team in examining the current position of the firm and the market, and determining a future objective based upon industry trends and competitors' intentions.

Sygertech builds a hypothesis of the industry dynamics based on Porter's well-known model for competitive dynamics within an industry. Essential to this model is having a comprehensive picture of the industry players including competitors, potential new entrants, key customers, and suppliers, and to build an opportunity analysis based on how this structure is evolving over time.

Market Segmentation Analysis

Industrial companies typically operate in highly competitive markets where some form of niche focus strategy is essential for market entry and growth. The product or technology usually has horizontal appeal to a number of market segments. Wasting resources by selling to the wrong customers is a serious risk. The challenge is to identify where marketing resources should be allocated to ensure maximum value. Components of value include market potential, relative competitive advantage, and lifetime value of the customers.

Sygertech's Approach: Sygertech's market driven approach concentrates on identifying the high value segments and uncovering the implications of competitive dynamics. The analysis starts by categorizing existing customers according to three criteria: strategic, significant, and profitable, and then deriving preliminary market segmentation data based on the findings. A hypothesis concerning the key segmentation variables is developed and tested by further research.

Sources of market data are identified and analyzed to forecast market segment size and growth parameters. The industry structure is analyzed to understand the distribution dynamics and the implications. Competitors are studied in-depth to uncover their intentions towards specific market segments and channel participants.

Value Proposition Alignment

When a product or service is being offered for the first time or to a new market, companies need to determine the optimum offer to maximize value. Typically, buying criteria tend to be 80 percent risk avoidance and 20 percent performance enhancing.

Just giving the customer what they need is not enough. Maximizing value means finding the competitive "sweet spot" where the customer's needs and risk tolerances are satisfied, and the vendor is able to make a profit over the entire life of the customer relationship.

Sygertech's Approach: Sygertech takes a customer-driven perspective to discover the value drivers for the target segment, and to translate product features into customer benefits. Sygertech does this by ranking the buying criteria, mapping the decision process, and aligning the offering with the buying criteria and decision process.

Action Research is the process of making direct contacts in the industry with those executives who are most likely to have pertinent information needed to validate strategic options, to discover new opportunities, and to dispel corporate myths. The key to successful Action Research is to contact the relevant opinion leaders and stimulate them to speak openly about important issues.

Sygertech has tremendous success in getting meetings with key people, and in obtaining information of pertinent value. More over, as a consequence of this activity, Sygertech is often in a position to make introductions to potential partners, prospects, and investors.

The value of having Sygertech conduct Action Research instead of relying on the company's in-house resources is:

• Anonymity - Sygertech can make contacts with competitors and opinion leaders in the industry without any reference to the client.
• Dedication - Sygertech has a single objective and is not derailed by operational demands or internal politics.
• Relevance - information and analysis relates exactly to the management issues facing the firm.
• Predictability - Convergence is achieved since the results are validated with documented market information.

Critical success factors for Action Research include:

• Well defined objectives for the research and a well-structured research plan that includes a preliminary hypothesis, interview guides for each type of contact, and a table of contents for the final report.
• A list of contacts that includes those persons who are most likely to have the information sought. This usually includes competitors, major customers, prospects, partners, and industry pundits.
• Thorough preparation before the calls that includes in-depth gathering and analysis of published sources including SEC disclosures, websites, published reports, product literature, etc. A consultant should never ask a question for which there is a published answer unless it is for the purpose of determining the veracity of the contact.
• Persistence on the telephone and effective networking. In order to get top executives to participate in interviews, it is necessary to be well informed and to be persistent. Often one contact will provide an effective network to the next.

An initial set of interviews is conducted and interim results are provided. Based on management feedback, the focus of remaining interviews is fine-tuned.

Once the final set of interviews is completed, an analysis is developed and results are presented to the management team. This drives discussions to consensus so that action-oriented decisions can be taken with confidence.

To make sound decisions that lead to resumed growth and profits, management needs to identify plausible strategic options, agree on decision criteria, and act based upon their understanding of prevailing market realities.

This process appears obvious, but it is not easily done because most efficiently run companies experience the following deficits:

• Time - There is not enough time for managers to discuss the issues. When everyone is working hard to deliver on tactics, critical communications do not take place.
• Trust - Some managers may feel at risk to share critical information, or due to inadvertent side effects of team dynamics some individuals may not be heard. The team may be the best in the business, but unable to harness their own knowledge.
• Truth - There are often prevailing myths about market realities that have not been confronted with facts. Acting without sufficient validation based on real information is a common source of failure in business.

For more information, please contact:

Tom Samek, B. Sc., MBA
Partner
Tel: (514) 351-7878 ext 155
Fax: (514) 351-7545
t.samek@sygertech.com