Vertical Market Penetration Leadership Award
Vertical Market Penetration Leadership Award
Uninterruptible Power Supply Services
North America, 2011
Frost & Sullivan’s Global Research Platform
Frost & Sullivan is in its 50th year in business with a global research organization of 1,800 analysts and consultants who monitor more than 300 industries and 250,000 companies. The company’s research philosophy originates with the CEO’s 360 Degree Perspective™, which serves as the foundation of its TEAM Research™ methodology. This unique approach enables us to determine how best-in-class companies worldwide manage growth, innovation and leadership. Based on the findings of this Best Practices research, Frost & Sullivan is proud to present the 2011 North American Vertical Market Penetration Leadership Award in Uninterruptible Power Supplies (UPS) to Thomas & Betts Corporation.
Significance of the Vertical Market Penetration Leadership Award
Key Industry Challenges Addressed by Increased Vertical Market Penetration
Original Equipment Manufacturers (OEMs) face significant competition from third parties offering UPS services at a lower cost. Today’s UPS manufacturers must often balance between providing the best services while ensuring optimal energy efficiency and power management. OEMs typically excel in replacing older systems or components under a full service contract and in providing the latest products based on customer's ability to spend. However, independent service providers (ISPs) traditionally generate revenue from the maintenance of older systems. Although ISPs are typically engaged in multiple UPS dealerships, they have the capability to service older systems, which, in turn, can boost their service revenues.
OEMs are of the opinion that services offered by ISPs lack quality. However, third parties argue that their expertise is complete and in multiple areas, including the ability to service UPSs derived from multiple manufacturers. This capacity offers benefits to consumers, providing them with the flexibility to choose from a variety of vendors and products at very competitive prices.
To recover from the drop in the telecom market in 2000, OEMs adopted the strategy of bundling extended service offerings, especially for three phase products. A decade later, in 2010, end users' expectations have changed. Their bargaining power has increased because they have been provided more for less, which increasingly places price pressure on the OEM. This pressure has resulted in decreased overall margins for OEMs, particularly in the services area. OEMs have lost significant service revenues to local ISPs, as these third parties have an edge with respect to cost.
Placing an ISP as an integral part of an OEM while continuing to leverage the brand equity of the service provider has enabled companies to expand service revenues and remain competitive, especially when product sales lag behind. In addition, the ability to offer versatile localized services along with experienced and seasoned personnel helps in enhancing the customer relationship for long term service contracts.
| Attachment | Date | Size |
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 Thomas & Betts Corporation IRG 27.pdf | 06/16/11 12:55 pm | 153.25 KB |