Septura 2017d Handouts

Professor Bruce PhillipsStrategic & Organizational

Sepura 2017St t i Di ti

Professor Bruce PhillipsStrategic & Organizational Strategic & Organizational Consulting Strategic DirectionsStrategic & Organizational Consulting

Mission• To help make the world safer &

more productive through

Objectives• Reach revenue of 200m bp by

2015 with OP of 18% to 20%more productive through advanced communication systems that combine the advanced services available in

2015, with OP of 18% to 20%• Retain leading MS in Europe

during the transition from Tetra to the new paradigm

consumer devices with the security, reliability, & durability required in the world of PMR.

to the new paradigm• Become a major supplier of

broadband devices to public security services in the U Sq

Vision• To be the world’s leader in

advanced devices for 4G+

security services in the U.S.• Establish clear leadership position

in fast growing emerging markets (b th bli it d advanced devices for 4G+

private mobile networks for– Military

(both public security and enterprise)

– Public security– Enterprise

Industry StructureCyber

SecuritySocial

N t kiCloud Apps BB EverywhereIndustry Structure Security

More Data, More Data, Less Voice

Video on the

Networking

Maps, GPS, Location-based

Services

Cameras Everywhere (inc. Drones)

pp& Data

Economic Shift from West Desire to

y

Chinese Suppliers

Chinese Suppliers

Chinese Suppliers

AnalyticsVideo on the

Device

Push of Data Biometrics

f m Wto “BRIC” US Army

JBC-P

Military Equip Companies

Desire to Expose

GovernmentPublic SafetyPublic SafetyA n i s

TetraIntegrators

TetraDevice

Tetra NetworkComponent

Suppliers

pppp pp& Apps

p

*

AgenciesIntegratorsManufacturersManufacturersSuppliersSuppliers

EU Economic CrisisInternational

Terrorism

Telco LTE Suppliers

Telco LTE Suppliers

iOS & Android Smartphones

A A

EU Economic CrisisTerrorism

App Developers

App Developers

Gen YMerging of Military & Security Markets

*In the case of Sepura, we also have distributors in the value chain

Opportunities ThreatsOpportunities• US

• Specialized commercial markets

Threats• Motorola growing in Europe• European economic crisisSpecialized commercial markets

• “BRIC” emerging markets

• Maps, GPS, location‐based services

p• Forward integration by Tetra

network suppliers and backward integration by Tetra integrators

• Video

• Social networking

• App developers

• Merging of military and security markets

• Military equipment companiesApp developers y q p p• BB everywhere• LTE• iOS & Android Smartphones• iOS & Android Smartphones• Commercial Apps• Cloud Applications• Gen Y

Future Scenarios

Strengths WeaknessesSO StratagemsStratagems that will leverage our competitive advantages to capture external opportunities

WO StratagemsStratagems that will overcome our current weaknesses and enable us to capture external opportunities

InitiatorMost discussions of strategy focus

upon this

Evolution inBusiness

Environment(I d t

Revolution inBasis of

Competition“Rules of the

Game”

Evolution in Basis of

Competition“Rules of the

Game”

(picture)ST StratagemsStratagems that will leverage our competitive advantages to avoid or minimize the impact of external threats

WT StratagemsStratagems that will overcome our current weaknesses and enable us to avoid or minimize the impact of external threats

Initiator

Reactor

Initiator

Reactor

Revolution inBusiness

Environment(Industry Structure)

Reactor

upon this quadrant(Industry

Structure)

Strategic Alternatives

(picture)

Mission & Objectives

(picture)

Next Steps

LAPD & FD

Dimensions of Competition

Description of Strategy

LAPD & FDMotorola Solutions

Competition

(picture)

Evaluation of the StrategyStrengths & Weaknesses••


© 2012 Professor Bruce Phillips. ALL RIGHTS RESERVED

•••

(words)Key Success

Factors

Affordability

Reliability / Durability

Customization / Adaptation

Broad Functionality

Rapid Adaptation FunctionalityAdaptation

Samsung

Raytheon

Sepura

Moto

Ou cu nt p fil is t Our current profile is too close to Moto.

We need to be able to hit their weaknesses of ff d bilit f ti lit affordability, functionality,

and adaptation

Trends U t i tiTrends• Merging of military and

security

Uncertainties• Public or dedicated networks

S i li d d i ithy

• BB everywhere• Data, video, IM, biometrics as

i t t i

• Specialized devices with specialized operating systems or adaptation of consumer

important as voice• Social networks• Desire to expose

pdevices with standardized operating systems

bl l dDesire to expose

• Cyber• Terrorism

• EU stable ormeltdown

• Smart devices• Cloud

D li f W t & th f• Decline of West & growth of BRIC

EU Relatively Stable EU Meltdown6 % 4 %

Trends• Merging of military and security

• BB everywhere• Data, video, IM,

>80%

Specialized Devices & Operating Systems


60% 40%

50%

Data, video, IM, biometrics as important as voice

• Social networks• Desire to expose• Cyber

orks

rks

wor

ks

orks

Cyber• Terrorism• Smart devices• Cloud• Decline of West & growth of BRIC

icat

ed N

etw

o

ublic

Net

wo

dica

ted

Net

w

Publ

ic N

etw

o

40%60%

Ded

iPDedP

50%Adaptation of

Android DevicesAdaptation of

Android Devices

50%

Trends• Merging of military and security

• BB everywhere• Data, video, IM, EU Relatively Stable EU Meltdown

6 % 4 %Data, video, IM, biometrics as important as voice

• Social networks• Desire to expose• Cyber



60% 40%

50%Cyber

• Terrorism• Smart devices• Cloud• Decline of West & growth of BRIC

orks

rks

wor

ks

Environmental Scenario 2

Forward with LTE


Business As Usual


New Markets LTE


Global

icat

ed N

etw

o

ublic

Net

wo

dica

ted

Net

wUsual

Environmental Environmental Scenario 3

LTE Opportunities



40%60%

Ded

iPDedScenario 4

Brave New World

Scenario 3

Android on Private

Scenario 8

Disaster Strikes

Scenario 7

New Markets Private Android

50%Adaptation of

Android DevicesAdaptation of

Android Devices

50%

Ideally, the strategy we choose should be robust enough to be effective if:Ideally, the strategy we choose should be robust enough to be effective if: Security services switch from relying on dedicated networks to relying on

public LTE networks and/or Our core EU markets suffer a deep economic crisis or Security services adopt Android or The current situation survivesCan we do all of this, or do we have to make choices?


SecuritySocial



Video on the

Networking


Services


pp& Data


y

Chinese Suppliers

Chinese Suppliers

Chinese Suppliers


Device



JBC-P


Desire to Expose


TetraIntegrators

TetraDevice


Suppliers

pppp pp& Apps

p

*



Terrorism

Telco LTE Suppliers

Telco LTE Suppliers


A A


App Developers

App Developers



Competitive WeaknessesCompetitive Strengths p• Broad functionality• Affordability• EU focus(b d di i f

p g• Rapid adaptation• Reliability• Customization• Installed base

• (based upon dimensions of competition)

Opportunities• US• CommercialBRIC

• Develop new-gen devices with all of the functionality on smartphones

• Partner w/ Sony Ericsson and/or Samsung to migrate European customer base to security grade Android handsets

ith d l t k biliti (T t d

• Acquire a US-based company and lead the transition from P25 to commercial BB standards

• Partner with an Android supplier and focus upon durable handsets for

i li d i l li ti• BRIC• Data, video & location based

• Social Networking

with dual network capabilities (Tetra and LTE)

• Partner with Acatel Lucint to rapidly bring an non-Android security portfolio (handset, tablet, and PC) to marketFind a Chinese partner and beat

specialized commercial applications• Merge with a company in biometrics and

provide unique capabilities to security systems on commercial BB networks

g• App Developers

• Find a Chinese partner and beat Raytheon to India and APAC

• Partner with low-cost app developers• Focus upon U.S. and emerging markets• Become the Android of choice for

• Sell the business to Motorola or Raytheon while the EU market share is still worth something

Threats• EU meltdown

security• Innovate into cognitive radio for BB

emergency services• Merge with one of the Tetra network

providers help consolidate the market

share is still worth something• US & military competition• Forward / backward integration of Tetra suppliers

• And, Build flexible and customizable networks for rapid deployment

• Provide customized cloud-based apps for security that only require thin clients as evolution from Tetra to LTE systems

pp• BB / LTE / Android / Apps• Cloud• Gen Y

Alternative Directions• Maintain current strategy and build options for LTE and/or Android when the market shifts

• Consolidate the mature Tetra market by merging with Tetra network providers and• Consolidate the mature Tetra market by merging with Tetra network providers and integrators

• Develop and aggressively market a new‐gen LTE (or multi‐network) Android security handset and tablet, primarily for U.S. and developing markets, recognizing that it will cannibalize the EU marketEU market

• Partner with an LTE infrastructure company like Alcatel Lucent in go‐to‐market for security LTE Android offering

• Partner with an Android company like Sony‐Ericsson or Samsung for a security Android ff ioffering

• Exit ASAP

Loyal to TetraStrategic Questions:

Consolidate the mature Tetra market by merging with Tetra network providers and integrators

• Maintain current strategy and build options for LTE and/or Android when the market shifts

Which way should we go?

Accelerate the BB

Disruption

Exit


SecuritySocial



Video on the

Networking


Services


pp& Data


y

Chinese Suppliers

Chinese Suppliers

Chinese Suppliers


Device



JBC-P


Desire to Expose


TetraIntegrators

TetraDevice


Suppliers

pppp pp& Apps

p

*



Terrorism

Telco LTE Suppliers

Telco LTE Suppliers


A A


App Developers

App Developers



ChangingBasis of

Competition“Rules of the Game”

StableBasis of

Competition“Rules of the Game”

InitiatorMost discussions of strategy focus upon

this quadrant

StableBusiness

Environment(Industry Structure)

InitiatorInitiatorChangingBusiness

Environment

Reactor(Industry Structure)

ReactorReactor(Industry Structure)

ObjectivesObjectives

• Reach revenue of 200m bp by 2015, with OP of 18% to 20%

• Retain leading MS in Europe during the transition from Tetra to the new paradigm of LTE and Android

• Become a major supplier of broadband devices to public security services in the U.S.

• Establish clear leadership position in fast growing emerging markets (both public security and enterprise)

Our strategy …• Disrupting the market, not defending it or waiting for our competition to

drive the changes

L i ll h i i l d h d b i h fi• Leveraging all the innovations already out there and being the first to put them together in the world of security, not trying to invent

• Helping security services move toward public networks not trying to• Helping security services move toward public networks, not trying to convince them to be confined to dedicated networks

• Enabling the transition toward standardized operating systems and all‐IP g p g ynetworks, not making Tetra into a dogma that never dies

• Embracing the concept of Apps, not limiting functionality to what is built h hinto the hardware

• Leveraging partnerships to promote the new paradigm and to enter new geographic markets not trying to change the world on our owngeographic markets, not trying to change the world on our own

R i i th t thi i bl S ill d it i tRecognizing that this is a gamble …. So we will do it in stages

What will be our basic approach?•Disrupting the market•Rapid follower (all the

What will be the speed & sequence of our moves? p (

technologies exist, we just need to be the 1st to put them together)

re

Where will we compete? / Where not?•Tetra and Android handsets for security services and

•Development of dual‐band handsets for LTE and Tetra

• Initiation of negotiations with ALU; search for a second candidate

Post

u

yspecialized enterprise applications

•EU, U.S., and emerging markets based upon

search for a second candidate•OEM of an Android tablet with repackaging for security personnel

Objectives

pcapabilities of new alliance partners

H ill b i & i ?

•Development of an Android handset

• Introduction in the U.S. prior to EU•Consider being an app supplier

hicl

es

How will we be unique & win?•First to introduce advanced handsets and tablets into the security marketHow will we structure the

b i f d th th d

Consider being an app supplier to other Android handsets

How will we get there? How not?I t l d l t f h d t

Ve •Adaptation of all of our experience in Tetra

•Leverage of our leading position in the EU

business, fund the growth, and obtain superior financial returns?•Repositioning in the capital markets as a growth company

• Internal development of handsets•Alliance with one of the leading LTE infrastructure companies

•Outsourced production

p•Attempt to bring new prime investor

•Gradual cannibalization of our EU Tetra business p

•Leverage of app’s developers through IP sharing

Strategic Alternatives

(picture)

Mission & Objectives

(picture)

Next Steps

LAPD & FD


LAPD & FDGeneral Dynamics & Raytheon

Evaluation of the Strategy••


© 2012 Professor Bruce Phillips. ALL RIGHTS RESERVED

•••

(words)Key Success

Factors

Septura 2017d Handouts

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