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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

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TallyGenicom

FRANCE

Kevin Hernandez

Kristina Ripak

Brett Taylor


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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


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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.


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  • 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.


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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.


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III. UNDERSTANDING THE INDUSTRY.

ALL PRINTERS, DIFFERENT MARKETS

  • Impact printers

  • 1. Line Printers is wherehammer 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.


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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.


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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.


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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.


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III. UNDERSTANDING THE INDUSTRY.

WHAT MAKES TALLYGENICOM DIFFERENT?

  • 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.

  • They sell directly to enterprises (large corporations and the government) as well as leveraged channels (distributors).

  • Sales is the primary focus. Service and consumables is the main profit of the company.


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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”


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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.


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IV. SETUP OF THE COMPANY

“THE FOUR REGIONS”

  • 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

  • East

  • ·Germany, Austria, Switzerland, CEE (central and eastern Europe)

  • South

  • ·France, Italy, Iberia (Spain and Portugal)

  • Middle East and Africa (also including Australia)

  • A lot of these countries only have distributors; the major ones have direct sales manufacturers


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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.


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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.


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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.


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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


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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.


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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:

  • It was the first place they had success in direct-end user sales.

  • 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.


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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.


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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.


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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.


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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.


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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

  • 136 million dollars in sale for EMEA

  • 15 million dollars EBIDA world wide

  • 20-22 million dollars for Northern region

  • 43 million dollars for Eastern

  • 26-28 million dollars for middle east and Africa


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…thank you very much we hope you have all liked our presentation.

The Best In France Team

Kevin Hernandez

Kristina Ripak

Brett Taylor