Market Intelligence - Why? What? How?

1. Market Intelligence - Why? What? How? June 7th, 2012 Johanna Haapanen Consultant Global Intelligence Alliance, Helsinki Johanna.haapanen@globalintelligence.com

2. Agenda Global Intelligence Alliance in a Nutshell Market Intelligence - Why? Market Intelligence - What? And How? More about GIA

3. Global Intelligence Alliance in a Nutshell Geographical presence • Global Intelligence Alliance (GIA) is the leading provider of Strategic Market Intelligence services and software. • GIA was founded in 1995 and is owned by managementand private equity investor CapMan. • GIA’s customers are large multinational companies and growth-oriented companies operating in a wide variety of industries. • GIA serves more than 120 partner customers on a continuous basis. • GIA has grown with an average annual growth rate of 39% since year 2000 and currently employs more than 120 people. Product & Service offering Customized market monitoring solution Highly analytical research and advisory for customers’ strategic decision making needs On demand business research service State-of-the-art Market Intelligence software enabling full control of the intelligence process Consulting services, events and online resources for developing intelligence programs

4. Market Intelligence - Why?

5. The major exporting partners of Estonia are located in the neighboring countries Source: CIA Factbook

6. Understand, compete and grow Critical decisions without sufficient information, e.g. entering a new market Plans are usually based on knowledge, data, gut feeling and experience During recessions, budgets of market intelligence are often cut at the time when risks and needs for intelligence are on rise Competitive landscape Market intelligence Voice of customers Market intelligence makes decisions safer Market and industry • Market Intelligence helps organizations understand their business environment, compete successfully in it, and grow as a result. • Market Intelligence collects information about market players and strategically relevant topics and processes it into insights that support decision-making. • Organizationally, Market Intelligence is typically placed under strategic planning, business development or marketing. • Terms such as competitor analysis, technology analysis or customer insights are often used under the overarching term Market Intelligence. Market Intelligence should be seen synonymous with concepts such as Competitive Intelligence and Business Intelligence.

7. The quality of executive decision-making leaves plenty of room for improvement… • An Economist Intelligence Unit study says that… • …61% of executives (72% in large firms) characterize management decision-making at their firms as moderately efficient or worse • …less than 10% of executives have information when they need it • … 46% assert that wading through huge volumes of data serves to slow decisions • ...56% are often concerned about making poor choices because of faulty, inaccurate or incomplete data EIU: “In search of clarity:Unravelling the complexities of executive decision-making”, Sep 2007

8. Business environment is getting increasingly complex and dynamic

9. Intelligence is needed by a large number of organizational functions and processes

10. A lot of information available makes decision making challenging

11. ”Each were partly right and all were wrong” What is an elephant? ”Elephant is a fan ...” ”Elephant is a wall ...” ”Elephant is like a tree ...” ”Elephant is like a snake ....”

12. Articles on software industry • China overtakes US as largest smart phone market • Canalys highlights importance of understanding local app store and channel trends • Shanghai, Palo Alto, Singapore and Reading – Wednesday, 2 May 2012 Canalys today released to clients its detailed smart phone shipment estimates by country for Q1 2012. Total shipments worldwide grew 45% year on year to 146 million units, but significant country and regional differences were apparent. Shipments in the US rose just 5% year-on-year, in marked contrast to the 81% growth seen across the Asia Pacific region. Shipments in China doubled and overtook those in the US for the first time. In Q1, China represented 22% of global smart phone shipments, while the US accounted for 16%. A year earlier these figures were the other way around. Of the top 10 countries for smart phones, half are now in the Asia Pacific region. Source:Canalys Gartner Says Android to Command Nearly Half of Worldwide Smartphone Operating System Market by Year-End 2012 Egham, UK, April 7, 2011— Worldwide smartphone sales will reach 468 million units in 2011, a 57.7 percent increase from 2010, according to Gartner Inc. By the end of 2011, Android will move to become the most popular operating system (OS) worldwide and will build on its strength to account for 49 percent of the smartphone market by 2012 (see Table 1). Source: Gartner ComScore: Android's US market share passes 50 percent, BlackBerry OS and WP7 slide Another month, another round of ComScore's US mobile studies. For the three-month average period ending in February 2012, 234 million Americans age 13 and older were found to be using mobile devices, with Samsung having its products in the hands of 25.6 percent of the American mobile market. Behind it came LG (19.4 percent, dropping from 20.5 percent), Apple (13.5 percent, a 2.3 percentage point increase), Motorola (12.8 percent, down from 13.7 percent) and HTC (6.3 percent, a 0.4 percentage point increase). Source: Engadget

13. Intelligent decision-making based on market monitoring & project support Decision-making is best supported through a combination of • Continuous market monitoring • Intelligence projects that support the specific decision points in different organizational functions and processes

14. Benefits of Market Intelligence

15. Benefits of Market Intelligence: a practical example • Time savings and ease of finding information • According to an end user survey among GIA’s customers, an average end user saves 6* hours per month through having up-to-date Market Intelligence content gathered into one place where it’s easy to find and search for (*2009 End-user Survey) • In an organization where the end user base is 300 decision-makers, the total time savings can be calculated as follows: • 300 * 6 hours / month = 1,800 hours per month • If a value of EUR 50 is calculated for each end user’s one hour of saved time, the total monetary savings amount to EUR 90,000 in each month

16. Intelligence cycle: the process of adding value to information The “intelligence cycle” reflects thecontinuous, systematic nature of utilizing informationin backing up business decisions. Within the cycle, needs analysis drives a process where data is collected and processed into actionable intelligence that is utilized by decision-makers.

17. Market Intelligence - What? And How?

18. Where would you like to be right now? What need to know How to receive the information Target country (market attractiveness) Find information from secondary sources Location in the country (best fit to the need) Talk to experts, friends, colleagues You or Travel agency (do you need help) Analyze and make a decision How to get there (market entry) Things to do (market sizing, segment) Travel Other options available (benchmarking)

19. How do I know what I need? We need to increase the sales volumes of our products in a new segment. Can you help us find a new distributor? We lost a big client and need to find new markets in order to employ our engineers. ? We are a governmental organization and we need to find markets abroad and provide services to other governmental organizations. Can you help us to understand how these kind of services are needed in other countries? We need to understand our competitors’ logistics and supply chain model and their strengths and weaknesses.

20. Solutions are available • The value chain can include commodities sourcing, production, competition, sales, distribution. • Market Attractiveness Analysis is used to define attractive market segments. • Market Size Analysis is used to identify the size and market share for various market segments • Market Entry Analysis refers to the review of a market in order to understand if an investment is interesting and in what form a company should enter a specific market. • Competitive Landscape Analysis refers most often to a high-level overview of the competitive landscape. • Trend Analysis is used to identify present and future trends and their impact on business.

21. Market Attractiveness Analysis • Market size and growth • Competitive forces • Customer preferences • Distribution channels • Local supply-chain environment • Political and regulatory environment • Comparative analysis of markets or geographies to support market entry or market selection • Methodology includes definition of market attractiveness metrics, data collection on local level, comparative analysis, and recommendations • Utilizes wide range of data sources and evaluation criteria ranging from macroeconomic level to industry-level

22. Cancer treatments study in the Baltics and Poland to evaluate expansion potential Pharmaceuticals & Healthcare| Strategic Analysis – Market Attractiveness Analysis, Advisory • KEY BENEFITS The client gained an ability to make concrete decisions based on unified research results, with good comparability. They also got an access to highly detailed data on local healthcare systems and their capacities and bottlenecks, put into local context for decision-making. NEED A Swedish private clinic was interested in the market for specific cancer-treatment services. Several locations for representative offices were considered, thus detailed insights were needed to assist in making a decision. The client especially needed data on current medical equipment and problem areas in current cancer treatment routines. Application: Strategic Planning Geography: Estonia, Latvia, Lithuania, Poland APPROACH Company interviews were conducted, extensive secondary research done, and the data and findings analyzed and summarized. Methods: Secondary research, company interviews, using financial databases, comparative analysis. SOLUTION Market potential of each country was described and ranked. Most suitable regions for local offices were identified by country. Also, current problems with regards to state-financed health-care in the field were described, helping the client to prioritize the 4 markets. Case study (#119)

23. Market Sizing & Forecasting • Quantitative market sizing and forecasting has many applications, including business planning, market entry strategy, product development, and investment strategy • A market sizing project begins with an elaborate definition of the product or market of interest • A reliable market size estimate requires triangulation by using various data sources (both secondary and primary) and analysis methods (both top-down and bottom-up)

24. GIA Group apply a bottom-up model to create regional estimates Global market potential Regional estimates were added together to establish global market potential Regional market potential Regional market sizes were constructed by summing up country market sizes Countries market potential Local primary research was carried out in selected countries to establish accurate market structure, size and growth. Marginal countries were left out of market size

25. 14 12 Industry A 10 Industry C Industry B 8 CAGR Industry I 6 Industry H Industry F 4 Industry J Industry E 2 0 0 10 20 30 40 50 60 70 80 Market size in € bn Global Market Benchmark – Industry X Markets in Year 9 *

26. Analysis of logistics warehouse services Logistics & Transportation| Strategic Analysis – Company Profiles, Market Sizing KEY BENEFITS Insight to the warehousing market, which helped in assessing the market’s investment potential Better understanding of competitive positioning in the market NEED Customer operating in the Nordic logistics industry wanted to benchmark its own operations against competing warehouse solutions. For this purpose, the customer needed an in-depth study of the warehousing markets in Sweden. Application: Strategic Planning Geography: Sweden APPROACH Expert interviews were conducted with various industry players. The findings were supplemented and validated with secondary research and analysis. Methods: Primary and secondary research SOLUTION Profiles of top-10 warehousing service providers in the market and their strategies, as well as detailed information of warehouse facilities of the target companies. The analysis included an overall market size estimate. - page 26 Case study (#21)

27. Competitive Landscape Analysis • An analysis of the competitive forces in a market or customer segment • Description of competitors, their market presence, offering, differentiation, strategies, strengths and weaknesses • Assessment of your company’s or brand’s positioning and competitive opportunities and threats in the market • Assessment of other competitive forces using Porter’s five forces model • Recommendations for market entry or competitive strategy

28. Market analysis of wind power in China Energy, Resources & Environment | Strategic Analysis – Market Sizing, Competitive Landscape Analysis KEY BENEFITS Actionable intelligence to support entry into Chinese market, with the ability to devise an effective competitive strategy in the new market NEED A leading supplier of mechanical equipment for the wind power industry was exploring market opportunities in China. To make a successful entry into the market, the company needed in-depth knowledge of the wind power market in the country. Application: Strategic Planning Geography: China APPROACH Customer and supplier interviews to establish competitive landscape and demand drivers in the target country. Market size and share analysis based on primary data. Methods: Primary research, market size and share analysis, market entry support SOLUTION GIA was able to provide valuable market data and pinpoint both opportunities and threats for the client. The project included a consultative workshop that resulted in actionable recommendations for a market entry strategy. - page 28 Case study (#13)

29. Trend Analysis • Expertise on trend analysis for B2C and B2B markets with focus on grouping and analysing emerging consumer preferences • A trend analysis project aims at identifying new success factors, supporting innovation & product development, challenging prevailing expectations and helping companies prepare for potential opportunities • A trend analysis project can review time horizons in a range of 1-5 years and it can be used to break down major trends (e.g., aging) into more detailed entities • The trend analysis project is carried out in 4 phases and it always involves a client team to work with the project outcomes to reach best understanding of the situation • The project delivery time is approximately 1,5 months and requires 2-3 client meetings Example: Office Furniture Manufacturer Identified Future Office Trends with Trend Analysis project Identify and map changes in office furnishing in 2-5 year time horizon Analyze, based on secondary data, how white collar work changes in near future Identify office design themes relevant for the client The Project Fed New Ideas For Customer Product Development Team

30. Market trend analysis, demand drivers and competitor profiling Industrial services| Strategic Analysis – Market Assessment KEY BENEFITS Customer gained insights on the market where a potential investment target operates and was thus able to build a more focused and in-depth investment pitch to present. NEED In order to be well-prepared for an initial meeting with a potential investment target, Private Equity company wished to understand on a broad global level the market and therein of a potential investment target. The study focused on market trends, key competitors and their strengths, and regional differences in demand and demand drivers of key client groups. Application: Investment pitch Geography: Global APPROACH Initial desk research was conducted using industry sources and company databases to create an understanding of the major trends and players in the market. This was deepened and complemented by in-depth interviews with some of the larger clients as well as multiple key competitor interviews. Methods: Primary and secondary research Timeline: 2 weeks from kick-off to final delivery SOLUTION Regional market size estimates, key markets and trends were analyzed. Hands-on ideas on key success factors were delivered, together with client perception of key companies and supplier selection process. In addition, competitor long-listing and five 1-slide profiles on major players was provided. - page 30 Case study (#209)

31. Value-Chain Analysis • Purpose: • The research aims at mapping out the value chain of a certain industry or business VALUE-CHAIN ANALYSIS • Methodology: • The analysis produces qualitative and quantitative insights of the structure of a value chain • The analysis employs a combination of primary and secondary research to ensure comprehensive data coverage VALUE CHAIN RESOURCING RESOURCING RESOURCING • Examples: • Value chain process maps and identification of key players • Presentation of dynamic forces in the value chain

32. Supply chain analysis in the mobile phone industry Telecommunication, Technology & Media | Rapid Response Research: Supply Chain Analysis KEY BENEFITS Ability to plan post-acquisition business strategy based on comprehensive understanding on the supply chain dynamics and developments. NEED Customer operating in the mobile handset market was looking to adjust own strategy and needed comprehensive picture of competitors’ and customers’ supply chain models for benchmarking purposes. Application: Strategic Planning Geography: Global APPROACH Each competitor’s strategic moves in the supply chain were analyzed. For each company, an overall strategy and technological development analysis were presented. Methods: Secondary research, collecting in-house tacit knowledge, strategy analysis, supply-chain analysis SOLUTION Several customer and competitor supply chain structures modeled utilizing customer’s internal information and secondary research findings. - page 32 Case study (#17)

33. Source: Marketline, CIA Factbook Market snapshot of Singapore Basic facts Economic, technological and legal factors Market outlook • Even though Singapore is a world leader in governance, the current administration has been claimed to restrict the political freedom of citizens • Singapore set strong growth in 2010, but industry was impacted by low external demand • The education sector has been performing well in Singapore, but income inequality remains a major concern • Singapore has invested in research and development in the past, but innovation output in terms of patents granted has been low • Even though Singapore is business-friendly country, political interference in judicial decisions is widespread • The government has planned to spend USD 2.5 billion over 2010–2015 on a Continuing Education and Training program to develop expertise in several professions. • Singapore’s corporation tax is one of the lowest in Asia. • Future prospects • Free trade agreements with China and Taiwan • Improved bilateral ties with Malaysia • Government to ease restrictions on media • Future risks • Racial tensions - page 33

34. Company presentation

35. GIA is the leading provider of Strategic Market Intelligence services and software • GIA is the preferred partner for organizations seeking to understand, compete and grow in international markets. • GIA was founded in 1995 and is owned by acting managementand private equity investor CapMan. • GIA’s customers are primarily large multinational companies and growth-oriented companies operating in a wide variety of industries. • GIA serves more than 120 partner customers on a continuous basis. • GIA has grown with an average annual growth rate of 39% since year 2000 and currently employs more than 120 people.

36. Access local knowledge in over 100 countries GIA Group has 11offices on 4 continents. Together with affiliated GIA Member companies, certified GIA Research Partners and consultants, GIA provides access to local knowledge in over 100 countries. All GIA Network companies adhere to GIA’s Research and Analysis Quality System as well as the SCIP Code of Ethics.

37. We understand your business With a track record of supporting thousands of clients around the world, we bring you practical expertise in your markets, as well as knowledge from our practices covering 11 industries and all the key business functions. Industry Practices Automotive Chemicals Construction & Property Development Consumer & Retail Energy, Resources & Environment Financial Services Private EquityLogistics & Transportation Manufacturing & IndustrialPharmaceuticals & HealthcareTelecommunication, Technology & Media Functional Practices World Class Market Intelligence MI for Strategic Planning MI for Marketing & Sales MI for Product & Innovation ManagementMI for Supply Chain Management M&A and Partnering

38. Partner with us to understand, compete and grow in international markets We focus on helping you make the right decisions. Our customized approach is embodied in GIA's Intelligence Partnership™ concept, a one-stop solution for all your strategic market intelligence and advisory needs.

39. Make better informed decisions with our customized solutions Customized market monitoring solution to boost market awareness and sharing of insights Analytical insight and advisory, enabling you to compete more effectively and grow into new opportunities Valuable information about your markets and industry, on-demand around the world Robust and scalable software that enables full control of the intelligence process A suite of consulting services, events and online resources that help you set up and develop world class intelligence programs Developed by a team of market intelligence specialists, management consultants, industry analysts and technology experts, our solutions are comprehensive and totally customized for you.

40. Market Intelligence Landscape & GIA Positioning Continuous Service Information management software Market monitoring • Industry analysts’ subscription services • Content aggregators and media / web monitoring providers’ information feeds • Internal content production • Other CI software products • Microsoft SharePoint for MI content management • Other custom-built intranet solutions GIA :a consultative full service solution that caters to companies MI content and program support needs. GIA Intelligence Partnership Information Content MI Program Support • Strategy & marketing consulting firms • Industry analysts • India based research outsourcing vendors • Expert network organizations • MI conference organizers • CI consulting & training firms Research and advisory MI Best Practices Projects

41. Many growth-oriented international companies view GIA as their trusted business partner Automotive Chemicals Construction & Property Development Consumer & Retail Energy, Resources & Environment Financial services

42. Many growth-oriented international companies view GIA as their trusted business partner Private Equity Logistics & Transportation Manufacturing & Industrial Pharmaceuticals & Healthcare Telecommunication, Technology & Media

43. Contact information • Please feel free to contact Global Intelligence Alliance (www.globalintelligence.com) if you have any questions. • Global Intelligence Alliance is a worldwide network of companies specializing in customized Market Intelligence. Leveraging its global reach, the GIA provides international organizations with a single source for customized Market Intelligence services and solutions. Our consultative expertise covers continuous market monitoring, intelligence software, customized research and analysis, and intelligence workshops. Johanna Haapanen Consultant +358 50 5366 888 johanna.haapanen@globalintelligence.com