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NCR Corporation By: Matt Day

NCR Corporation By: Matt Day. Company Overview.

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NCR Corporation By: Matt Day

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  1. NCR Corporation By: Matt Day

  2. Company Overview • Founded in 1884, NCR Corporation is a pioneer in the self-service industry. NCR sells ATMs, self-service kiosks, self- checkout systems, and imaging production services, using a differentiation approach. NCR sells innovative technologies around the globe, using a B2B scheme, selling its products to banks, retailers, airline and telecom companies, and hospitals. NCR also provides installation, implementation, and maintenance services to its customers. • They began operations by creating many of the first machines in its industry, such as the mechanical cash register, automated credit systems, ATMs, LCDs, and bar code scanners. • NCR sells a wide variety of products and services to its customers; therefore it is difficult to have clear competitors, other than those in specific markets. Some of its most well-known competitors are IBM, Dell, and Hewlett-Packard.

  3. Company Overview • NCR’s products are produced globally, with inventory held in 40 countries with over 20,000 employees world-wide. • Many of its products are produced by third parties inside and outside of the US. Third party producers of ATMs, POS terminals, bar code scanners, and payment solutions are located in the USA, Brazil, Hungary, China, and India. Producers of entertainment kiosks are located in the Columbus, Georgia facility • NCR has also made two large acquisitions, Mobiqa, a mobile bar code scanning company (Edinburgh, Scotland), and Radiant Systems, Inc., a POS system developer (Alpharetta, Georgia, USA)

  4. Company Overview • NCR’s revenues totaled $4.81 Billion in 2010. • 44% of revenues were obtained in North, South, and Central America; 36% in the Europe, The Middle East, and Africa; and 20% in Asia Pacific & Japan • Revenues from product sales (ATMs, kiosks, etc.) amounted to 49.87%, while revenues from services (maintenance, installation, implementation, etc. ) totaled 50.13% of total revenues

  5. Competitive Position • NCR is in a great position against its competition. It is the main supplier to its consumers, its suppliers only sell their items to NCR, there are not many other new entrants to the

  6. Business Model • NCR obtains its products from third parties, mentioned previous, and then sells them to its target market. NCR uses a differentiation technique, making its products more desirable and attractive.

  7. Core Competencies NCR’s core competencies are those that revolve around improving self-service technologies and staying the #1 innovator of the industry around the globe. That is shown by NCR’s penetration into the travel and gaming and entertainment segments.

  8. Target Market • NCR sells its products in a B2B perspective. NCR’s target market includes: • Banks • Retailers • Hospitals • Airline Companies • Telecom Companies

  9. NCR is a Winner! • #1 supplier of ATMs for 24 years straight • #1 supplier of ATM applications • #1 supplier of retail self checkout systems for 7 years running • #1 supplier of hospital patient self-check in systems 3 years running • Only self-service company in the top 5 of the FinTech Top 100 (global technology and service providers to the Financial industry)

  10. PEST Analysis

  11. Political • BRIC Protectionism • BRIC countries have stressed the fact that protectionism is a major threat to the global economies’ recovery • This is a threat to NCR because the majority of their products are produced in Brazil, India, and China • Tariffs and quotas hinder the amount of products NCR can export from their producers, which can keep the amount of profits at a lower amount than its potential

  12. Political • EU Protectionism • Individual countries in the EU are pushing towards labor and economic protectionism • Want to keep home country workers in home country jobs • Could keep a better IT specialist that lives in the UK out of an NCR job in its Edinburgh production facility • Along with labor protectionism, EU countries are stressing more tariffs on imported goods

  13. Economic • Global Economic Recession • Since 2008, the global economy has been on a decline • This decline gives NCR a large threat • Unemployment is high • Price of Labor is low • Smaller number of consumers to buy NCR products • Financial uncertainty dictates buyer willingness

  14. Economic • Price of Raw Materials Increasing • NCRs products are produced in The United States, Brazil, China, India, and Hungary • Prices of raw materials in those countries has risen • NCR must adapt to the increase in prices, ultimately by increasing price, which could bring on the threat of more competition

  15. Economic • Emerging Markets on the Rise • NCR relies heavily on revenues from outside of the US • Almost 68% come from outside of the US • These emerging markets also hold potential to find new workers and find more inexpensive work

  16. Economic • Exchange Rates • NCR uses the U.S. dollar as its functional currency, and translates all its revenues into the U.S. dollar • The U.S. dollar is not the strongest currency in the world • When NCR does business in a place like India, which has a stronger currency than the U.S., the exchange rate will show a negative difference when translated into U.S. dollars • Also, a weaker dollar could make third party products more expensive if the third parties currency is stronger than the U.S. dollar • But when the U.S. dollar is strong, NCRs revenues will look increasingly higher

  17. Social • Financial Service Usage • More and more businesses are using financial services (i.e., ATMs, online banking solutions, etc.) • NCR’s services revenues have been steadily increasing over the past few years • Increase in ATM, online banking, and other mobile banking usage

  18. Social • Consumer Willingness to use Self-service is increasing • Going wireless and mobile is the next big thing in all business sectors • ATMs, Self Check-in products, Point Of Sale products • Supermarkets that have “Self-Checkout” lanes use scanning technology that NCR develops • NCR is constantly developing new products in order to stay ahead of the technological curve

  19. Social • Consumers Continuing to use Cash (ATMs) • As consumer credit increases, cash use also increases • ATMs are used more for smaller, but frequent transactions • Also, more deposit use is on the rise in ATMs • ATM sales in EMs are on a significant rise, as cash is used as a tendering mechanism in the middle class

  20. Technological • POS technology is becoming State-of-the-Art • POS technology has not reached its maturity in the product life cycle • NCR is an innovator and keeps POS technology current and constant R&D will keep NCR in the green

  21. Technological • Mobile technology use is on the rise • Businesses are introducing technology that allows customers to access their company via mobile phones • This gives NCR an opportunity because their R&D department have developed the products that businesses would use in those mobile transactions

  22. Industrial, Competitive, and Market Analysis

  23. Porter’s Five Forces- Industry Analysis

  24. Intensity of Rivalry- High • Information technology, and hardware systems is a profitable business segment • Although NCR has a large market share, companies like IBM and Dell still hold strong in competition • As long as the self-service industry stays lucrative, rivalry will remain high • Companies will continue to look for higher market share

  25. Buyer Power- Low • There are many buyers of NCR products, and due to the strong differentiation of NCR’s products, buyer power is low • NCR introduces most of the newest products, but NCR’s rivals stay current and competitive • There is not a great worry about substitute goods, so NCR has an upper hand in determining prices

  26. Supplier Power- Moderate • NCR relies on third party producers for many of its products • Microsoft, Accenture, and Intel supply NCR with microchips, processing units, and other technologies that NCR uses in its products • But NCR could acquire some of these suppliers and cancel out any supplier power they have • So in turn, NCR chooses to give the suppliers a large amount of power • They are definitely big enough to supply their own raw materials • So for the time being, suppliers have a moderately high amount of power over NCR, until NCR decides to own its suppliers

  27. Threat of Substitute Goods- Possibly High • NCR is innovative, original, and introduces the newest in financial technologies • NCR is the leader in ATM hardware sales and system support among multiple industries • But, if labor, the obvious substitute, became cheaper than NCR’s products, sales would decline • Also, if cheap labor became plentiful, and the use for labor became more popular, sales could decline • So the threat of a substitute good could be high, given these situations

  28. Threat of New Entrants- Low • ATM hardware, and systems support is a lucrative area of business • There are many established companies in this segment, with NCR as a leader • NCR has been the global leader in ATM installs and sales for 22 consecutive years, 30% market share globally • Wincor, Diebold, CoinStar, and NCR all have large market shares, so it would be difficult for a new company to steal away some of the market share

  29. Quick Notes • All industries that NCR covers (ATMs, self-service kiosks, etc) are all very attractive • In later slides you will see that growth is occurring in all sectors, which can give the opinion that growth of NCR is inevitable • NCR has tried to weaken the suppliers power by acquiring smaller firms such as Radiant Systems, Inc. • NCR should try to weaken the intensity of rivalry, by possibly acquiring a large rival

  30. Conclusions • Due to the fact that there is a low threat of Substitute products, buyer power is low • If labor becomes cheap and abundant, substitute products and buyer power can become high • Supplier power is high due to the demand that NCR has of its third party suppliers • New entrants would have a very difficult time entering the market due to established companies • Rivalry is healthy due to many competitors looking for largest market share

  31. Competitor Analysis • Key Competitors

  32. Competitor Analysis

  33. -Coin Star only divides its revenues by two segments, USA and the rest of the World -These are the three most relevant segments between the four competitors -Hospitality services include retail, hotel, and airline POS systems

  34. Wincor • Wincor specializes in ATMs, as well as other retail banking equipment, lottery terminals, and postal terminals • They obtained $2.239 billion in revenues in 2010, with a net income of $106 million • They have 9,309 employees covering 100 countries

  35. Coin Star • Coin Star focuses on the production of self-service kiosks, along with coin counting kiosks • They also produce the RedBox line of DVD kiosks • Their revenues in 2010 totaled to $1.436 billion, with a net income of $51 million • They employ 2,585 people in 136 countries

  36. Diebold • Diebold produces ATMs, banking vaults, and other drive-up banking equipment • Revenues from 2010 totaled $1.330 billion, and a net income of $20.252 million • Diebold has 16,124 workers in 90 countries

  37. Conclusions • All three of these companies share similar segments to NCR, they are the closest competitors, but NCR has double the revenues as its competitors • A critical success factor that NCR has is that NCR is innovative and ahead of the curve • Over time, NCR has been the leader in developing the latest technologies in this area • This give NCR an edge over its competitors

  38. Global Breakdown of Sales by NCR

  39. Market Analysis Number of Installed Self-Service Technologies World Wide, 2009-2015 • The total installed combined base for self–service technologies including ATMs, self–service kiosks and vending machines is estimated at 28.2 million units in 2010 and is expected to reach 33.8 million units by 2015, growing by 3.7% from 2010 through 2015. • Self–service kiosks are projected to experience the maximum growth in installations of 9.3%. This sector was estimated at 1.6 million units in 2010 and is expected to reach 2.5 million units in 2015.

  40. Global ATM Market • Markets like US, Canada, Europe and Japan, have large ATM installed base and a very slow growth rate • But developing markets like China and India have weak installed base, and offer strong opportunity for growth in future. NCR has expanded its market share in China’s 5 largest banks • Emerging economies, improving technology and increasing trend of people to move towards self service devices, are going to boost the growth of ATM market

  41. Global Retail Market • With the everlasting global recession, retail is not going to increase at such an immense rate that will cause alarm in the industry • With that said, retailers might not have a need to buy more and more scanners, check-out systems, etc.

  42. Global Airline Market • Passenger Air traffic has been on a steady increase since 2009 • 8% increase in 2010, expected 6% increase in 2011 • USA accounts for 50% of air travel, which is on a smaller increase than India, Brazil, and China • India is the 2nd highest growing nation of air travel, while brazil is 1st • Dubai International Airport has begun incorporating NCR systems

  43. Global Hotel and Restaurant Market • Trends in these markets all point to an increasing demand for IT products • Hotel Executives are cutting back on labor so the next source in line is NCR-type products • Self-check in services and kiosks • As long as labor is expensive and not very useful, NCR will thrive in this industry

  44. Conclusions • ATMs are in a mainly mature market, but still bring in huge profits • Use of Self-Service products is on the increase • Sales will reach estimated 2.5 million units in 2015 • Most of the markets that NCR targets its products to are increasing demand in NCR-typed products • NCR relies heavily on sales from outside of the Americas, although the segment as a whole is a reverse of that • NCR has yet to reach its full potential in the market, and it occupies a vast majority of the market already

  45. SWOT Analysis

  46. Global Market Share

  47. Competitive Positioning • NCR takes a mainstream differentiation position in every market it associates in • The price of its products are relatively high in relation to the high value of its products • If labor becomes cheaper and more popular, the price of NCR’s products would decrease

  48. SWOT AnalysisStrengths/Weaknesses

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