Citrus Business Strategy and Product Term Paper

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Company-specific, sales, quote and order processes, customer service, and warranty and returns KPIs all reflect financial performance, over time, for any company. By measuring these KPIs and engraining them into the company culture, Citrus can create a sustainable differentiator in exceptional performance as well. The bottom line is that Citrus must turn accountable and measurable performance into a lasting competitive advantage over the long-term.

Analyzing Industry-Wide KPIs for PC Manufacturers

Areas of Measurement

Baseline: What is Measured

Industry Definition

Company-specific

Project costs and expenses

Use as a baseline for defining ROI

Number of orders per year

Determine configuration's impact on inventory turns

Current inventory and costs

Inventory turn savings

Customer Data

Lifetime cost per customer; avg. deal size by customer

Sales

Order cycle time

Order cycle times reduction of 35% or more recorded with mftrs contacted

Cost of Sales

Days Sales Outstanding reduction from 55 to 23 days on average

Cross-sell and up-sell revenue

Increase of 46% on aggregate

Average sales price per order

Increase from 7% to 29%

Quote and Order

Average costs to complete an order

91% reduction in cost per order

Special Pricing Requests

Over 92% ROI on automating Special Pricing Requests

Bad or incomplete orders

Incomplete order reductions of 30%

Customer Service

Number of customer complaints

89% reduction in cost of simple requests

Revenue lost to churn

69% when cross-selling is used with quote-to-order

Number of calls on order status

Median level of 15,000 per week to 200

Warranty and Returns

Reduction in warranty cost on customized products

14% reduction at a minimum

Labor cost reductions

Decrease order re-work from 18% to 1%

Distribution and Multi-Channel Management Strategy

As the O-Citrus laptop series is primarily sold to enterprise accounts, the primary sales channel will be a direct sales force who will call on CIOs and VPs of it, in addition being able to present to company boards of directors. While a direct sales force is expensive, this specific product and its unique attributes warrant the investment. Further, the unique value proposition of the O-Citrus laptop series centers on highly quantitative MTTF and MTTR calculations in addition to TCO measures, all of which must drive a positive ROI for customers. These are all essential aspects of selling into enterprise accounts and require training and an expertise with financial modeling in addition to in-depth knowledge of how systems work. Second, the direct sales force makes sense as a first phase of considering a reseller channel strategy to gain access into corporate accounts from relationships these resellers have.

Support and Services Strategies

As Citrus is primarily focused on the enterprise market, it is critical that service and support be made part of the essential part of the product launch. Support needs to be tiered with escalation paths for laptop compatibility problems and for break/fix workflows. Second-tier support needs to support Maintenance, Repair and Overhaul (MRO) workflows as well. These process workflows from the customers' standpoint need to be Web-based and accessible on a 24/7 basis.

From a services perspective, there is the need for having a dedicated, non-exclusive manager on each account to get projects completed on time and manage their services. In addition, for larger accounts there needs to be a dedicated, exclusive account manager assigned for both sales and service. The role of this manager on larger accounts is to ensure the largest customers stay with Citrus, and also work to up-sell them additional services. In addition to these two strategies, intensive training on the modularity, upgrades and self-service of the systems will be provided to enterprise accounts prior to product introduction.

References

AMR Research (2005) - the Handbook of Becoming Demand Driven. AMR Research Report October 6, 2006. Accessed with permission from the publisher. Lora Cecere, Roddy Martin, Debra Hofman.

AMR Research (2003) - Configuration is the Heart of Customer Fulfillment for Complex Product Manufacturers. AMR Research Report. Monday March 31, 2003. Retrieved from the Internet on May 4, 2008 at http://lwcresearch.com/filesfordownloads/ConfigurationIstheHeartofCustomerFulfillmentforComplexProductManufacturers.pdf

Askegar and Columbus (2002) - Channel Management Best Practices: It's All About Orders. AMR Research Report. Monday September 9, 2002. Retrieved from the Internet on May 1, 2008:

http://lwcresearch.com/filesfordownloads/SqueezetheRevenueOutofSPRs.pdf

Columbus (2001) - Defining Your Direction in Guided Selling. AMR Research Report. October, 2001. Retrieved from the Internet on May 3, 2008:

http://www.lwcresearch.com/filesfordownloads/DefiningYourDirectioninGuidedSellin.pdf

Columbus (2002) - the Sell-Side E-Commerce Market: It's All About Integration. AMR Research Report. Monday April 1, 2002. Retrieved from the Internet on May 5, 2008:

http://lwcresearch.com/filesfordownloads/SellSideECommerceMarketIsAllAboutIntegration.pdf

Columbus (2003) - Squeeze the revenue out of your Special Pricing Requests. AMR Research Alert. Tuesday November 11, 2003. Retrieved from the Internet on May 7, 2008:

http://lwcresearch.com/filesfordownloads/SqueezetheRevenueOutofSPRs.pdf

Dell Press Release (2000). Dell Announces "Premier Dell.com. Round Rock, TX: Dell Investor Relations.…[continue]

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