Transcript TallyGenicom

TallyGenicom
FRANCE
Kevin Hernandez
Kristina Ripak
Brett Taylor
Overview :
I
TallyGenicom, the History
II
The Printer Market Today
III
Understanding the Industry
IV
Setup of the Company
V
Where To Go?
VI
Cultural Conflicts
VII
Benefits of Beeing in France
VII
The Unforseen Problems
VIII
Human Rescourses
IX
Advise
X
Key Figures
I. THE HISTORY
•TallyGenicom is born from a merger of, you guessed it: Tally
& Genicom.
•What are their origins?
Tally was a German company based in Ulm, Germany, and
Genicom was an American company.
•It is bought by Arsenal Control Partners a New York
investment firm in hope of bringing new management to clean
up the organization and sell the company at a profit.
I.
HISTORY
FIRST CHANGES
•A new renewed team is formed with fresh people such is the
example of Reed Eller (CEO France). They are sent in to make
the new merged company a smooth, quick, well oiled machine.
•In order to profit from competitive labor costs it’s first
decision was moving the manufacturing from Ulm to China
and Mexico’s “Maquilladora” because of the lower labor costs at
those locations as well as the tax incentives they provided.
II. THE PRINTER MARKET TODAY
•The market of TallyGenicom is an extremely competitive
market. There are 25 companies that are major players, 18 of
which are key players, these brands have many years of
experience and worldwide distribution.
•Main Competitors of TallyGenicom.
HP, Lexmark, Ricoh, Kyocera, Samsung, and Epson.
TallyGenicom is one of the smaller players.
III. UNDERSTANDING THE INDUSTRY.
ALL PRINTERS, DIFFERENT MARKETS
Impact printers
1. Line Printers is where hammer bank strikes the paper. This is
used for industrial companies, logistics, warehouses, retail
chains where they have a lot of forms to print and can then
tear off the pieces of paper and separate them.
2. Dot serial matrix is where a bunch of pins strike the paper
with a ribbon to flow between letters. This is used for things
such as airline tickets, pass books for banks where you print
your transactions.
III. UNDERSTANDING THE INDUSTRY.
ALL PRINTERS, DIFFERENT MARKETS
TallyGenicom in the Impact Printer Industry
•
TallyGenicom manufactures from scratch impact printers.
•
It is the biggest company in impact printers with 50 percent
of the market share.
•
Only 1 other company, Printronix is left which is only half
the size of TallyGenicom. This market is a declining market,
however, and TallyGenicom hopes to be the only remaining
player.
III. UNDERSTANDING THE INDUSTRY.
ALL PRINTERS, DIFFERENT MARKETS
3. Thermal Printers: Not in this market
4. Inkjet printers: Not in this market
Made for consumers. These are the type of printers sold at
places like Costco. Companies sell them at a low price (less
than 100 euros) and make the profit on the ink sales. Laser
Printers
5. Laser Printers
These are more expensive than inkjet because they are move
heavy duty and the ink lasts longer. The quality is not as
good for photography though.
III. UNDERSTANDING THE INDUSTRY.
ALL PRINTERS, DIFFERENT MARKETS
TallyGenicom in the Laser Printer Industry
•
TallyGenicom sells Laser Printers on an Original Equipment
Manufacturing (OEM) basis.
•
Only 3 companies make the “engine” for the laser printers,
so TallyGenicom buys the “engine” from the competitors
and manufacturers the rest.
• They sell more laser printers than impact printers, but the
margin on impact printers is higher.
III. UNDERSTANDING THE INDUSTRY.
WHAT MAKES TALLYGENICOM DIFFERENT?
1. TallyGenicom differentiates itself from other companies
such as HP by not just providing the printers but providing
service and configuring a solution to setting up the software
with the companies computers.
2. They sell directly to enterprises (large corporations and the
government) as well as leveraged channels (distributors).
3.
Sales is the primary focus. Service and consumables is the
main profit of the company.
III. UNDERSTANDING THE INDUSTRY.
WHAT MAKES TALLYGENICOM DIFFERENT?
QUOTES RIGHT FROM THE MANAGEMENT:
•
“The reason we sell equipment is so we can sell the service
and supply”
•
“We’re a solution company; not just a printer company”
•
“Selling printing solution, providing full range of
equipment, supplies, and service”
IV. SETUP OF THE COMPANY
•
HQ of world wide operations is in Chantily, VA.
•
Reed Eller is the head of EMEA for TallyGenicom, which
stands for:
•
Europe (including the UK), Middle East and Africa.
• The European Headquarters, as well as the Southern Region
HQ, is located in France.
•
France became headquarters on Sept 1st, 2005. There has
been a branch in France for 20 years though. The French
office includes 8 sales people; 15 service (42 Total). The
France sector has a legal presence in France.
IV. SETUP OF THE COMPANY
“THE FOUR REGIONS”
1.


North
UK, Ireland, Scandinavia, Benelux, Baltic States
Scandinavia grouped here rather than with Russia because found to be
more culturally related to the Baltic States more than Russia
2. East

3.

Germany, Austria, Switzerland, CEE (central and eastern Europe)
South
France, Italy, Iberia (Spain and Portugal)
4. Middle East and Africa (also including Australia)
A lot of these countries only have distributors; the major ones have
direct sales manufacturers
V. WHERE TO GO?
ENGLAND vs. FRANCE
•The CEO of the company, located in California, originally wanted England
to be the headquarters since English was spoken there.
•Cash pooling was an issue. Since TallyGenicom is an American Corporate
Company, all profits are converted into USD. The British pound is currently
worth almost 1.8 that of the USD.
•When TallyGenicom sells its products, however, it sells it at the same
numerical value, but with GBP instead of USD in front of. Therefore, it is
good for the company to sell products there because all the profits are
expatriate back to USD.
V. WHERE TO GO?
ENGLAND vs. FRANCE
•However, living conditions for management in London are also more
expensive due to exchange rate between the USD and GBP.
•Also, in the USA, citizens are not taxed where you reside but rather on
your citizenship. Therefore, management, such as Mr. Eller, would have
been subject to double taxation in London. The company would have
made a deal where it paid the difference, but this amount would also been
subject to taxation for the company.
•France, on the other hand, has a treaty with USA so double taxation
would not occur. This amount actually ends up being less than living in the
USA.
V. WHERE TO GO?
ERNST & YOUNG GIVES A HAND
•The company consulted Jack Anderson of Ernst & Young to
use data comparing the costs of different countries such as the
Netherlands, Germany, Italy, France, and England.
•France’s costs ranked astonishingly low. There were some
countries with comparable costs, but they were not desirable
places to live and were difficult to get in and out of for
traveling.
•Mr. Eller had a big part in the decision to have Paris as the HQ
for EMEA. He had lived in Paris before when he was working
for Motorola, and Paris seemed to fit for both the company
and for him.
V. WHERE TO GO?
ERNST & YOUNG GIVES A HAND
Criteria looked at when choosing France:
1. Transportation:Paris is easy to travel within and travel to
other places. It has 2 major airports (Orly and Charles de
Gaulle) and good intercity travel with the metro and RER.
2. Centrally located
3. Cost of doing business
4. Cost of living
5. Tax--France Fiscal treaty with US in 1995
VI. CULTURAL CONFLICTS
BETWEEN THE AMERICAN HQ AND FRANCE
•
Personality:
HQ in America thought that employees in Paris HQ had
too much vacation. (you live to work, we work to live—
Frenchman to Eller)
• Language barriers:
Miscommunication arrose. Sometimes American HQ
would be in agreement with those in Paris office, but
because their English was not perfect, they thought they
were disagreeing.
VII. BENEFITS OF BEING IN FRANCE
•
The French pride in being technologically advanced, so
there is a lot of talented workforce.
•
It is a good place to test ground for new approaches to the
market place two examples:
1. It was the first place they had success in direct-end user
sales.
2. If you buy a cartage from TallyGenicom, then the
company will provide you free service on your computer
equipment, even though its not TallyGenicom’s. This
concept was created in France and now is used worldwide.
VIII. UNFORSEEN PROBLEMS
•
Overcoming the psychological barrier of “we’re French, we know better.”
•
90% of the French business was through distributors (80% were selling through
distributors while only 20% were calling directly to corporations and
governments.)
•
Eller wanted to flip this where 70% of sales was dedicated to contacting the
users directly. At first, it was very hard to convince them to change their ways.
Now after 6 months, however they are all on board and have been making
profits for the company because of it.
•
•
Ex. Renault—Made a good 2 million dollar order for 25,000 laser printers.
Ex. The French revenue last year was 24 million dollars. They already have 35
million dollars of potential business in their pipeline, and this is not including
money from selling through distributors. Some examples are Casino,
Carrefour, SNCF, Minster of Interior.
IX. HOW HR WORKS AND IT’S CHALLENGES
•
There is no HR department in France. There is only 1 HR
department globally located in Wanes borough, VA. Al the hiring
is done within the office through networking, recently for the sales
side to increase sales. The policy is to recruit local people:
Everyone in the office, besides Mr. Eller, is French even the Senior
Management.
•
Management found challenges in being able to fire people, even
when they were underperforming. The company went through
changes where it focused on going from
administration/manufacturing organization to a sales and
marketing organization.
•
It did not fire the former employees, however, and tried to keep
everyone, unless they were a non-performing salesperson. There
was attrition and some turnover, but the turnover was due to the
person not performing.
IX. HOW HR WORKS AND IT’S CHALLENGES
FIRING PEOPLE EXEMPLIFIED
•
A sales employee who has been with the company for 30
years was not selling anything. It would cost 1-2 years of
salary to get rid of him. They have put forth a written
performance improvement for him so that if he does not
improve, they will have documented proof of why they fired
him. If they did fire him, it would still cost them but it
would reduce the blow about 50 percent.
•
Sales employees are easier to tackle with because you can
easily link the performance of the job. Also, since most of
the incentives are tied to commission, if people are
underperforming they usually quit because they are not
getting paid enough.
X. ADVICE
•
France is recently trying to attract investments into the
country.
•
Find someone to thoroughly investigate and assess what the
French government might be willing to do to attract your
company to France.
•
For example, there has been some tax holidays being offered
in Lille for companies to open up warehouses there.
•
TallyGenicom is currently looking at a possible agreement to
open a logistics center in Lille if they can experience these tax
holidays.
XI. KEY FIGURES
Revenues and Sales
• EBIDA corporation-11million dollars
• Revenue in France-24 million dollars
• 60% of the company sales are in EMEA (40 million dollar
responsibility
Costs
• 6 million dollars of cost taken out of this year
• Reduced head count/closed Ulm factory; took 60 people out
and changed from manufacturing to sales
Goal for this year
1. 136 million dollars in sale for EMEA
2. 15 million dollars EBIDA world wide
3. 20-22 million dollars for Northern region
4. 43 million dollars for Eastern
5. 26-28 million dollars for middle east and Africa
…thank you very much we hope
you have all liked our
presentation.
The Best In France Team
Kevin Hernandez
Kristina Ripak
Brett Taylor