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2016 North American
Automotive Diagnostics Aftermarket
Customer Value Leadership Award
2016
BEST PRACTICES RESEARCH
© Frost & Sullivan 2015 2 “We Accelerate Growth”
Contents
Background and Company Performance ........
BEST PRACTICES RESEARCH
© Frost & Sullivan 2015 3 “We Accelerate Growth”
Background and Company Performance
Industry Chall...
BEST PRACTICES RESEARCH
© Frost & Sullivan 2015 4 “We Accelerate Growth”
Customer Acquisition
Given the intense competitio...
BEST PRACTICES RESEARCH
© Frost & Sullivan 2015 5 “We Accelerate Growth”
ownership experience by making it easier for cust...
BEST PRACTICES RESEARCH
© Frost & Sullivan 2015 6 “We Accelerate Growth”
Significance of Customer Value Leadership
Ultimat...
BEST PRACTICES RESEARCH
© Frost & Sullivan 2015 7 “We Accelerate Growth”
Key Benchmarking Criteria
For the Customer Value ...
BEST PRACTICES RESEARCH
© Frost & Sullivan 2015 8 “We Accelerate Growth”
The results of this analysis are shown below. To ...
BEST PRACTICES RESEARCH
© Frost & Sullivan 2015 9 “We Accelerate Growth”
Criterion 4: Growth Potential
Requirements: Custo...
BEST PRACTICES RESEARCH
© Frost & Sullivan 2015 10 “We Accelerate Growth”
The Intersection between 360-Degree Research and...
BEST PRACTICES RESEARCH
© Frost & Sullivan 2015 11 “We Accelerate Growth”
Best Practices Recognition: 10 Steps to Research...
BEST PRACTICES RESEARCH
© Frost & Sullivan 2015 12 “We Accelerate Growth”
About Frost & Sullivan
Frost & Sullivan, the Gro...
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Launch Tech USA Award Write Up

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Launch Tech USA receives the 2016 North American Automotive Diagnostics Aftermarket Customer Value Leadership Award

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Launch Tech USA Award Write Up

  1. 1. 2016 North American Automotive Diagnostics Aftermarket Customer Value Leadership Award 2016
  2. 2. BEST PRACTICES RESEARCH © Frost & Sullivan 2015 2 “We Accelerate Growth” Contents Background and Company Performance ........................................................................3 Industry Challenges..............................................................................................3 Customer Impact and Business Impact ...................................................................3 Conclusion...........................................................................................................5 Significance of Customer Value Leadership ....................................................................6 Understanding Customer Value Leadership ....................................................................6 Key Benchmarking Criteria ....................................................................................7 Best Practice Award Analysis for Launch Tech USA .........................................................7 Decision Support Scorecard ...................................................................................7 Customer Impact .................................................................................................8 Business Impact...................................................................................................8 Decision Support Matrix ........................................................................................9 The Intersection between 360-Degree Research and Best Practices Awards.....................10 Research Methodology ........................................................................................10 Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices .................................................................................................................11 About Frost & Sullivan ..............................................................................................12
  3. 3. BEST PRACTICES RESEARCH © Frost & Sullivan 2015 3 “We Accelerate Growth” Background and Company Performance Industry Challenges The automotive diagnostics industry is highly competitive and undergoing significant changes. Independent service providers striving to expand their share of the maintenance and repair aftermarket are increasingly facing challenges with original equipment manufacturers (OEMs) designing complex vehicles that are difficult to service. Specifically, the growth of hybrid and electric vehicle technologies and higher penetration of electronics systems are making it difficult for technicians to effectively service vehicles. In this context, regulations such as “Right to Repair” and connected vehicle technologies have proved to be helpful for aftermarket service providers. While correctly interpreting vehicle diagnostics data is a key requirement for aftermarket service providers, automakers have been keen on maintaining the confidentiality of the data needed to understand fault codes. However, since last year, the Right to Repair Act requires automakers to share much of the diagnostic data needed to maintain and repair electronic vehicle systems with independent aftermarket service providers. Device manufacturers and application developers have seized this opportunity to offer vehicle diagnostics and other data services using the same port that connects to existing handheld scan tools. Another industry challenge stems from difficulties in updating technician skills. The growing complexity and change in the latest-model vehicles are rapidly outpacing technician training and skill set development. Independent service providers thus grapple with a decline in skilled labor, which makes them more dependent on the quality of their diagnostic tools. New engines and OEM-fitted, in-vehicle telematics systems in a growing number of vehicles add to the pressure on aftermarket service providers, posing another challenge for suppliers of diagnostic tools and equipment. Customer Impact and Business Impact Price/Performance Value Launch Tech USA offers a comprehensive product portfolio of automotive diagnostics tools for independent service providers. Competitively priced for small businesses, the portfolio includes handheld diagnostic scan tools such as the popular Android based PAD II and telematics devices such as GOLO CarCare. These products offer several benefits over competing solutions such as the Solus Edge and MaxiSys 908. Launch Tech USA was one of the first suppliers to offer easy-to-use Android-based handheld diagnostics tools with the flexibility to support many different applications.
  4. 4. BEST PRACTICES RESEARCH © Frost & Sullivan 2015 4 “We Accelerate Growth” Customer Acquisition Given the intense competition in this market, it is critical for service providers to be able to reach out to customers conveniently, through local distributors, mobile vans, or brick and motor locations. Launch Tech USA’s in-shop channel, utilizing mobile distribution operated by franchisees/distributors of mobile tool distribution companies, helps Launch establish direct contact with customers. This enables the company to provide the additional information, training, and support required to enhance the overall customer satisfaction. Launch Tech USA works with leading industry participants, such as Matco Tools, MAC Tools, Cornwell Tools, AutoZone, NAPA Diagnostic Solutions, CARQUEST and Advanced Auto Parts, which underscores the company’s capabilities with respect to customer acquisition. Growth Potential Frost & Sullivan expects the vehicle diagnostic tools market to grow steadily as service centers invest in new equipment and training programs, with rising consumer awareness with respect to the requirements of aging vehicles. Although tooling costs are expected to drive revenue growth to a certain extent, new software subscriptions seem likely to offer greater opportunities for diagnostic device manufacturers. Frost & Sullivan expects the North American market for vehicle diagnostic tools to grow at a compound annual rate of 13.6% over the next five to seven years. New products, especially telematics solutions (such as GOLO), are likely to provide Launch Tech USA with the opportunity to grow and even exceed these high estimates. Human Capital For most businesses, their employees are the biggest asset and the primary indicator of their future performance. Launch Tech has about 500 research and development (R&D) engineers designing solutions that are innovative as well as affordable. At its US based Los Angeles headquarters, the company employs factory-trained technicians to oversee processes to ensure product quality and reliability as well as a fully staffed product support call center. Additionally, a team of field sales executives support customers while driving new sales via individual and group contacts. A strong focus on human capital enables Launch Tech USA to provide excellent customer service and an enhanced customer value proposition, which strengthens its market position in the long run. Customer Ownership Experience In the diagnostic tools market, customer ownership experience is increasingly being assessed in terms of the ability of suppliers to support software (and hardware) upgrade as required for maintenance and improved capabilities. Launch Tech USA supports automatic software downloads from its own servers to help customers upgrade their systems easily. Launch Tech USA’s products such as GOLO CarCare enhance the
  5. 5. BEST PRACTICES RESEARCH © Frost & Sullivan 2015 5 “We Accelerate Growth” ownership experience by making it easier for customers to understand vehicle designs and share relevant information with their mechanics. Even amid numerous product launches in the OBD II market, mostly from start-ups and catering to similar customer segments, Launch Tech USA’s leveraging of its existing capabilities in the diagnostics space and integrating the GOLO solution in the portfolio are expected to the take the customer ownership experience to a different level. Customer Service Experience The diagnostic tools market requires enhanced customer service to help technicians use the latest high-tech products. Launch Tech USA has a strong service network that provides reliable and widespread customer support, with highly experienced field support executives in every state, a product support hotline, and online forums hosted on its Web site. The company ensures that its services are easy to access, and its employees are knowledgeable and helpful. Facing competition from much larger companies in the market, Launch Tech USA relies on its ability to provide more personalized support to technicians to strengthen its brand equity. Conclusion Over the years, Launch Tech USA has evolved as an innovator offering value-adding vehicle diagnostic solutions to independent aftermarket service providers. Leveraging its strong technological know-how, a thorough understanding of customer needs, and a competitive pricing model, the company has successfully differentiated its solutions from those of its competitors. With its strong overall performance, Launch Tech USA has earned Frost & Sullivan’s 2016 Customer Value Leadership Award.
  6. 6. BEST PRACTICES RESEARCH © Frost & Sullivan 2015 6 “We Accelerate Growth” Significance of Customer Value Leadership Ultimately, growth in any organization depends upon customers purchasing from your company, and then making the decision to return time and again. Delighting customers is therefore the cornerstone of any successful growth strategy. To achieve these dual goals (growth and customer delight), an organization must be best-in-class in three key areas: understanding demand, nurturing the brand, and differentiating from the competition. Understanding Customer Value Leadership Customer Value Leadership is defined and measured by two macro-level categories: customer impact and business impact. These two sides work together to make customers feel valued, and confident in their products’ quality and long shelf life. This dual satisfaction translates into repeat purchases and a high lifetime customer value.
  7. 7. BEST PRACTICES RESEARCH © Frost & Sullivan 2015 7 “We Accelerate Growth” Key Benchmarking Criteria For the Customer Value Leadership Award, Frost & Sullivan analysts independently evaluated two key factors—Customer Impact and Business Impact—according to the criteria identified below. Customer Impact Criterion 1: Price/Performance Value Criterion 2: Customer Purchase Experience Criterion 3: Customer Ownership Experience Criterion 4: Customer Service Experience Criterion 5: Brand Equity Business Impact Criterion 1: Financial Performance Criterion 2: Customer Acquisition Criterion 3: Operational Efficiency Criterion 4: Growth Potential Criterion 5: Human Capital Best Practice Award Analysis for Launch Tech USA Decision Support Scorecard To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool allows our research and consulting teams to objectively analyze performance, according to the key benchmarking criteria listed in the previous section, and to assign ratings on that basis. The tool follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are illustrated below. RATINGS GUIDELINES The Decision Support Scorecard is organized by Customer Impact and Business Impact (i.e., the overarching categories for all 10 benchmarking criteria; the definitions for each criteria are provided beneath the scorecard). The research team confirms the veracity of this weighted scorecard through sensitivity analysis, which confirms that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies.
  8. 8. BEST PRACTICES RESEARCH © Frost & Sullivan 2015 8 “We Accelerate Growth” The results of this analysis are shown below. To remain unbiased and to protect the interests of all organizations reviewed, we have chosen to refer to the other key players as Competitor 2 and Competitor 3. DECISION SUPPORT SCORECARD FOR CUSTOMER VALUE LEADERSHIP AWARD Measurement of 1–10 (1 = poor; 10 = excellent) Customer Value Leadership Customer Impact Business Impact Average Rating Launch Tech USA 9.2 9 9.10 Competitor 2 8.1 8 8.05 Competitor 3 8 7 7.50 Customer Impact Criterion 1: Price/Performance Value Requirement: Products or services offer the best value for the price, compared to similar offerings in the market Criterion 2: Customer Purchase Experience Requirement: Customers feel like they are buying the most optimal solution that addresses both their unique needs and their unique constraints Criterion 3: Customer Ownership Experience Requirement: Customers are proud to own the company’s product or service, and have a positive experience throughout the life of the product or service Criterion 4: Customer Service Experience Requirement: Customer service is accessible, fast, stress-free, and of high quality Criterion 5: Brand Equity Requirement: Customers have a positive view of the brand and exhibit high brand loyalty Business Impact Criterion 1: Financial Performance Requirement: Strong overall financial performance in terms of revenues, revenue growth, operating margin and other key financial metrics Criterion 2: Customer Acquisition Requirement: Customer facing processes support the efficient and consistent acquisition of new customers, even as it enhances retention of current customers Criterion 3: Operational Efficiency Requirement: Staff is able to perform assigned tasks productively, quickly, and to a high quality standard
  9. 9. BEST PRACTICES RESEARCH © Frost & Sullivan 2015 9 “We Accelerate Growth” Criterion 4: Growth Potential Requirements: Customer focus strengthens brand, reinforces customer loyalty and enhances growth potential Criterion 5: Human Capital Requirement: Company culture is characterized by a strong commitment to quality and customers, which in turn enhances employee morale and retention Decision Support Matrix Once all companies have been evaluated according to the Decision Support Scorecard, analysts can then position the candidates on the matrix shown below, enabling them to visualize which companies are truly breakthrough and which ones are not yet operating at best-in-class levels. DECISION SUPPORT MATRIX FOR CUSTOMER VALUE LEADERSHIP AWARD High Low Low High BusinessImpact Customer Impact Launch Tech USA Competitor 2 Competitor 3
  10. 10. BEST PRACTICES RESEARCH © Frost & Sullivan 2015 10 “We Accelerate Growth” The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Frost & Sullivan’s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-degree research methodology provides an evaluation platform for benchmarking industry players and for identifying those performing at best-in-class levels. 360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS
  11. 11. BEST PRACTICES RESEARCH © Frost & Sullivan 2015 11 “We Accelerate Growth” Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Frost & Sullivan Awards follow a 10-step process to evaluate award candidates and assess their fit with select best practice criteria. The reputation and integrity of the Awards are based on close adherence to this process. STEP OBJECTIVE KEY ACTIVITIES OUTPUT 1 Monitor, target, and screen Identify award recipient candidates from around the globe  Conduct in-depth industry research  Identify emerging sectors  Scan multiple geographies Pipeline of candidates who potentially meet all best- practice criteria 2 Perform 360-degree research Perform comprehensive, 360-degree research on all candidates in the pipeline  Interview thought leaders and industry practitioners  Assess candidates’ fit with best-practice criteria  Rank all candidates Matrix positioning all candidates’ performance relative to one another 3 Invite thought leadership in best practices Perform in-depth examination of all candidates  Confirm best-practice criteria  Examine eligibility of all candidates  Identify any information gaps Detailed profiles of all ranked candidates 4 Initiate research director review Conduct an unbiased evaluation of all candidate profiles  Brainstorm ranking options  Invite multiple perspectives on candidates’ performance  Update candidate profiles Final prioritization of all eligible candidates and companion best-practice positioning paper 5 Assemble panel of industry experts Present findings to an expert panel of industry thought leaders  Share findings  Strengthen cases for candidate eligibility  Prioritize candidates Refined list of prioritized award candidates 6 Conduct global industry review Build consensus on award candidates’ eligibility  Hold global team meeting to review all candidates  Pressure-test fit with criteria  Confirm inclusion of all eligible candidates Final list of eligible award candidates, representing success stories worldwide 7 Perform quality check Develop official award consideration materials  Perform final performance benchmarking activities  Write nominations  Perform quality review High-quality, accurate, and creative presentation of nominees’ successes 8 Reconnect with panel of industry experts Finalize the selection of the best-practice award recipient  Review analysis with panel  Build consensus  Select winner Decision on which company performs best against all best-practice criteria 9 Communicate recognition Inform award recipient of award recognition  Present award to the CEO  Inspire the organization for continued success  Celebrate the recipient’s performance Announcement of award and plan for how recipient can use the award to enhance the brand 10 Take strategic action Once licensed, company may share award news with stakeholders and customers  Coordinate media outreach  Design a marketing plan  Assess award’s role in future strategic planning Widespread awareness of recipient’s award status among investors, media personnel, and employees
  12. 12. BEST PRACTICES RESEARCH © Frost & Sullivan 2015 12 “We Accelerate Growth” About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

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