CASE

Johnson Controls Hitachi

How Market Segmentation Helps Bridge Strategy and Products

INTERVIEW

Why Market Segmentation?

Rodolphe Jacson shares some thoughts on market segmentation and product planning.

Rodolphe, please introduce yourself

I’m Director of Global Product Management at Johnson Controls Hitachi (JCH), based in Tokyo. 

JCH offers Residential Air Conditioner (RAC), Package Air Conditioning (PAC) for light commercial application and Variable Refrigerant Flow (VRF) systems for commercial buildings. We also supply chillers, compressors and IoT-connected offerings.

The job of my team is to analyse market trends, define product strategy and build product roadmaps in collaboration with our local presence. After building the roadmap, we develop products with cross-functional teams (Engineering, Procurement, Manufacturing and Sales) in order to meet customer, channel and company expectations. The Global Product Development Division is often defined as the engine for growth.

How do you link market needs to product development?

At JCH we collect market trends and customer needs for product development roadmaps. We usually have 3- to 5-year roadmaps, but they’re often much shorter due to innovation and regulatory changes in terms of energy efficiency, refrigerant use and safety.

For example, one hot topic right now is which refrigerant to use. Ongoing policy changes will impact in just a few years, so we have to prepare for different scenarios. This is not like the car industry, where you can have a 5-7-year development platforms. Our business is more dynamic, like TVs and appliances, where something new comes out almost every year.

Our job is to feed market needs into the product vision, position, pricing and specification, not least at kick-offs with engineering teams who’ll develop and deliver the product.

Why did you choose to work with Modular Management?

It basically came as a package, as we’re working to implement modularity in JCH. This whole package, or journey, starts with understanding market requirements and customer needs. Then you move on to Modular Function Deployment (MFD) and the product architecture. 

For me, market segmentation is a very important opportunity, because we can be a bit technology driven. Most of my team started in engineering and moved on to product management, and despite our success, there’s a risk of focusing too much on technology and stacking features on top of each other. You should never lose sight of the end-customer. 

The customer needs to be in the centre of the conversation. You have to ask, “What really matters?” And to be able to do that, you have to clarify your segments and define groups of customers who want to achieve the same outcome.

How did it go?

It went well. 

We started with the customer journey, when people first start thinking about buying air conditioning. We linked the outcomes to what they want, clustered and grouped them, and looked at providing benefits based on what’s important for each group. With trait-based segments you put the same importance on the same set of benefits and look less at others. The same kind of customer has the same kind of view.

We fully implemented this methodology and ended up with six segments. And with these segments we were able to re-evaluate the size of market based on data and statistics from our market intelligence.

What were the main challenges?

The main challenge is to focus on end-user segments and make sure that their needs drive product development and planning. Our business mainly goes through professional channels, but it’s still important for us to focus on the end user. 

For example, take a hotel. 

We sell air conditioners to distributors and contractors, who in turn sell and install them to a hotel chain. We know that for the channel, on-time delivery, easy selection of product, installation and commissioning will be very important. But the hotel owner will be more interested in energy saving, easy operation or the user experience.

MARKET SEGMENTATION AND PRODUCT PLANNING METHOD

What are the main benefits of doing market segmentation?

The main benefit is to structure and clarify which segments we have and how we should address them. 

We also see how segments can exist in all regions. In the past we’ve had a more fractured, regional focus. Customers in one country were considered to have unique needs. This may be true, but that doesn’t mean that one segment can’t exist in another country or region. In fact, although segment size and market value differ, segments themselves probably don’t. 

Take the example of well-planned heavy user, who thinks a lot about which air conditioner they want at home. This segment may be big in a country like Japan, and smaller in another country where the product has more of a mass market feel. But it’s still highly likely that there are well-planned heavy users in all countries.

Another useful insight is to see whether we’re under- or over-represented in a segment. Analytics show that the global market is worth USD 66 billion. Each segment represents a share of this, and when you put actual sales in each segment, you can see where you’re focusing too much – or too little. It’s important not to unconsciously give up on segments, and by checking the size of each one you can address them properly.

Another benefit is that we can work together across product portfolios (RAC, PAC and VRF), all looking at the same customer benefits. It’s really beneficial to apply a finding like the relative importance of energy saving across both regions and product portfolios. It’s also good to bring together teams together that usually work separately, and get everyone to address the same customer benefits.

What would you have done differently?

The method’s good. No problems there. 

One of the challenges, for each segment, is to design a customer persona. This is difficult because the final document needs to be both very comprehensive and very easy to understand. 

In the end we asked our marketing team and one of their communications agencies to finalize this. The customer persona is important and you need a very fine-tuned document for internal communication. And we’re not specialists at doing that.

What were the key learnings for you?

The real benefit is that you put the customer at the centre of attention. 

Today, we use the customer canvas to benchmark where we are, in addition to competitor comparisons and functional gaps. We spend more time thinking about the needs of the end-customer and the messaging they want. I would have run this exercise for my team in isolation, even if we weren’t proceeding with modularity as a company.

Thanks Rodolphe for your time

Rodolphe Jacson, Johnson Controls Hitachi

INTERVIEW

How to Manage Innovation?

NIKLAS GUSTAFSSON, KTH EXECUTIVE SCHOOL
INTERVIEW

Niklas on Innovation

We got the opportunity to speak with Niklas Gustafsson, Program Director at the KTH Executive School in Stockholm. Here’s what he had to say on innovation and business transformation.

You focus on innovation management, why?

I think innovation sums up a lot of the challenges we’re seeing today. In this day and age we’re witnessing the introduction of a lot of new technologies and completely new product and service offerings.

We see this in the consumer business, driven by the new tech coming out of Silicon Valley, but it’s also happening in traditional industries. Big changes are under way, from combustion to electric engines, AI, 5G changing the frontiers of telecom, financial blockchains and new sensors enabling the internet of things. All these innovations are going to transform industries of today into something new.

The question is how companies can manage transformation? And this is where innovation management is a very good tool.

What are the main challenges facing companies today?

I think the biggest challenge is to adapt to the new reality that’s coming, especially for manufacturing companies.

There are so many shifts going on at the same time, in technology, business models and internationalization. A lot is being driven by new technology, but technology itself is not the solution. It’s how you convert technology into a viable business model.

For example, the electrification that’s ongoing in the truck and automotive industry is going to put an end to traditional business models and old ways of thinking.

What are the main opportunities?

If you can adapt, innovative technology presents tremendous business opportunities. I think the future looks very good for companies that are able to transform, adapt and re-educate their personnel.

It’s going to be much tougher for traditional companies that can’t adapt fast enough, which in turn presents opportunities for new companies with interesting and exciting new solutions. Innovative start-ups have the chance to completely transform traditional industries, faster than ever before.

We’ve seen this in Sweden in the music industry, where streaming capabilities have created big new companies. Books is another, where big new companies are buying up older ones.

And it’s not just Silicon Valley type start-ups. The airline industry, for example, is changing to meet new environmental demands, and the shipping industry is also going to have to make big changes. These changes will demand innovative thinking.

Another example is healthcare, where the opportunities are enormous, and we’ll need innovation in legislation too. Legislation that fits the old world won’t always fit the new.

What advice would you give to companies?

Fill up on knowledge. Refill. Understand theory, research, as well as practice. 

I give the same advice to academia. Go out, talk, listen and really understand the companies that are out there, and their problems. There’s a balance at this meeting point of theory and practice, and if you find it you’re in a good position to take on technical innovation and business model transformation.

What's the best thing about your job?

I get to meet a lot of interesting people, ideas and questions. It’s where theory and practice meet.

Any links you'd like to share?

I like trying to understand ideas and think one of the best podcasts right now is called Hidden Brain (external link).

Thanks Niklas.

QUOTE

What I like most about my job is that I get to meet a lot of interesting people, ideas and questions. It’s where theory and practice meet.

Niklas Gustafsson
KTH Executive School
Full Stack Developer
CAREERS

Full Stack Developer

OPEN POSITION
STOCKHOLM, SWEDEN

Full Stack Developer

Curious to find out more?

PALMA® Software is a cloud-based solution to create, document and govern modular product architectures. This strategic software enables companies to take control of their product architecture, govern customization and secure business goals.

PALMA is built on an in-memory NewSQL database and integrated web server. A high level of performance is required for rich and proprietary product information models, and we use the latest web technology to enable top performance for the end user. PALMA is a SaaS solution.

You’ll be working as part of the development team in central Stockholm. Since we’re growing, you’ll have plenty of opportunity to learn and influence how things are done. If you’re interested in delivering quality software services – well designed for usability, maintainability and stability – we are too. We also believe in staying ahead of the competition through innovation and excellence on all levels. This includes how we define and implement services; and how we support each other as individuals and as a team.

Skills and Experience?

Are you a full stack developer, junior or senior? 

This position could well suit you if you’re curious about – and have skills in – C#, .NET, .NET Core, JavaScript, HTML5, Polymer, web components, D3.js, HTML5 canvas, WebGL, WebAssembly, Rust, backend and database technologies, AWS or similar relevant technologies.

How to Apply?

Please e-mail your complete application with a (i) short cover letter and (ii) condensed CV, preferably not more than one page each, to jakob.asell@modularmanagement.com. Please apply as soon as you can, because we’ll be interviewing candidates continuously, and just contact me with any questions.

About

Companies across the globe have worked with Modular Management to create and apply market-driven modular product platforms, in industries as varied as home appliances, industrial products, telecom, and construction equipment.

By implementing this approach, clients have achieved dramatic improvements in business performance through increased speed and efficiency, while simultaneously expanding the breadth of products offered to the market.

Using proven methods and PALMA®, a unique product architecture lifecycle management software, we partner with client resources to deploy a set of innovative tools and structured processes. Together we uncover and exploit the economic potential of product architecture that lies within markets, products, technologies, operations and support systems.

Modular Management was founded 1996 in Stockholm.

CONTACT

Jakob Åsell

Embedded Software Architect
CAREERS

Software Architect

OPEN POSITION
STOCKHOLM, SWEDEN

Help Companies Bridge Product Strategy and Results

It all started when a team of dedicated researchers at KTH Royal Institute of Technology investigated how modularity was being used to increase efficiency and productivity. This research led to Modular Management being founded in 1996, since when international companies such as Whirlpool, Volvo, Alfa Laval, Ericsson and ABB have applied unique methods and tools to improve their speed, flexibility and product offering. The results have been quite dramatic. 

We’re experiencing significant demand for modular product architectures that connect mechanics, mechatronics and software, and are therefore looking to strengthen our team with a software architect. 

Quick Facts

  • Head office on Kungsgatan in central Stockholm
  • Company founded 1996
  • 35 consultants based in Sweden
  • Market leader in modularity and configuration.

Experts in modularity

We support clients in industries such as telecom, consumer goods, construction and robotics. Thanks to expertise in modular product architectures we’re able to support them reduce complexity and accelerate value creation. Our consultants have access to unique methods and tools that enable clients to increase efficiency, productivity and flexibility. And we’re continuously challenged to improve and develop better ways to make the modular journey faster, safer and more efficient.

Supportive and open culture

In a smaller, niche consultancy you get to learn all parts of the business. We all work as consultants in a non-hierarchical organization, where even the most experienced consultants share similar tasks to new employees. We always support each other and find solutions as a team and have colleagues and customers in Europe, USA and Asia. This international environment provides contacts all over the world.

The software architect position is a mix between management consultant and developer.

Peter Berggren, Vice President

Your Role

To succeed in this role, we believe you:

  • Work with software architecture today, as a developer or an architect
  • Are good at communicating and cooperating with a range of stakeholders
  • Understand how hardware and software interact
  • Have a coaching mindset and like to motivate fellow team members.

What You’ll Do

As software architect you’ll work in a project team together with colleagues and client representatives, including their own architects, in order to structure and design software. Areas include robotics, telecom, planning and infrastructure and you’ll both work with software modularization and take part in method development. Your task is not to code, but to coach clients. You’ll be responsible for the design and visualization of new client systems, at the same time as you coach them to improve. 

You’ll primarily work in one project at a time, with projects ranging from a few months to several years. You’ll be based in Stockholm, with approximately two travel days every fortnight, and when you’re not with clients you’ll be flexible to manage your own time.

Who You Are

You probably have a few years’ experience of software architecture, having worked as a developer or an architect. You understand how software integrates with hardware and probably have experience of a company that provides both. Alternatively, you’ve already worked in a consultancy that supports clients with software architecture. You find it easy to communicate, like to cooperate and appreciate the helicopter perspective. You prefer to work in teams and enjoy a structured approach.

What We Offer

You’ll be part of a strong team working on big and interesting projects together with colleagues and clients. You’ll be flexible in how you manage your time and with us you’re not a resource consultant, but part of a supportive team. At Modular Management you’ll also get in-depth consultant training in the methods and tools needed to best support clients.

Questions?

Email our recruitment partner info@femmetech.se if you have any questions about this position.

CONTACT
Malin Ekerå

What I like most is how we're able to prioritize work-life balance.

Malin Ekerå, Consultant
NEWS, MARCH 2019

Tusen tack

THAT’S ONE THOUSAND THANKS IN SWEDISH

1000 LinkedIn Followers

Many thanks to all of you who follow Modular Management on LinkedIn

One thousand followers is a record for us.

We believe that configurable product architectures are key to bridging strategy and results. Not only do they create value for customers, they help companies solve many challenges, including how to speed up innovation, connect people, data and products, and reduce complexity. Something worth sharing.

Our goal with LinkedIn is to publish relevant material reasonably often, not least regarding who we are, what we do and why we do it. It’s also a key channel for recruiting senior consultants and young professionals from around the world. Don’t hesitate to email if you’re curious to find out more about what a career at Modular Management looks like. 

Above all, LinkedIn is a channel for us to learn from you. So one thousand thanks, or tusen tack as we say in Swedish.

MEDIA CONTACT
Leif Östling
NEWS, MARCH 2018

Leif Östling Joins the Board

NEWS, MARCH 2018

Leif Östling Joins the Board

Leif Östling

Leif Östling has joined the Board of Modular Management.

His former positions include Chairman of the Confederation of Swedish Enterprise, CEO of Scania Trucks, Member of Volkswagen AG Board of Management and advisor to Toyota Material Handling Group. Leif also holds advisory positions at KTH Royal Institute of Technology and Morgan Stanley and is a Board Member at EQT, the Honorary Doctors’ Academy at Luleå University of Technology and Södertälje Science Park.

Leif Östling, Board Member, Modular Management Group

“This is an era of rapid change. Customers want individual, customized solutions and industry has to move from steel to sensors and services. We learnt at Scania that if you create and implement modular systems with standardized interfaces you can efficiently produce and configure products that meet unique customer demands. With modular digital systems you can harness data to satisfy customer needs and modularity gets your organization, products and customers working more closely together to drive development of your business model. Modular Management is a company that supports international clients do just this and I’m happy to be joining the Board.”

Karl-Johan Linghede, CEO, Modular Management Group

“We’re very pleased that Leif is joining our Board. Leif has extensive experience of leading international companies that utilize modular product architectures as a competitive advantage and this will further support the development of Modular Management. With his unique knowledge, industry insight, breadth and depth of experience and extensive network, Leif will provide great value for Modular Management and our clients.”

Modular Management in Brief

Based in Stockholm, Modular Management is a world leading consultancy in modularity and configuration. Thanks to modular product architectures, clients can increase productivity, speed up the delivery of new products and customize their offering all at the same time.

With 100+ successful cases in sectors including home appliances, transport, power supply, construction equipment and telecom, Modular Management is internationally regarded as market leader in modularity and configuration design.

 
PRESS CONTACT
NEWS, JANUARY 2018

New CEO for Modular Management

NEWS, JANUARY 2018

New CEO for Modular Management

Karl-Johan Linghede is the new CEO of Modular Management Group as of January 2018. Karl-Johan replaces company founder Alex von Yxkull, who becomes a working board member.

Modular Management, based in Stockholm, is a world-leading consulting firm in modularity and configuration.

Karl-Johan’s most recent position was Vice President and Head of Finance & Corporate Management at consulting firm Acando. He has extensive experience of driving and developing organizations with management consulting and effective digital solutions.

Prior to Acando, Karl-Johan worked at Scania with production development. His responsibilities included investments in production capacity, redefining productions flows and securing manufacturing for new products. He has also worked in USA and Canada for the family business in the concrete industry.

Modular Management in Brief

Modular Management is a world leading consultancy that makes the seemingly impossible possible. Thanks to modular product architectures, clients can increase productivity, speed up the delivery of new products and customize their offering all at the same time.

With more than 100 successful cases in sectors including home appliances, transport, power generation, construction equipment and telecom, Modular Management is internationally regarded as market leader within this field.

Karl-Johan Linghede, CEO, Modular Management Group:

“I’m really looking forward to getting to know Modular Management’s clients, international consultants and software team. We have unique know-how and the capacity to realize business value for our clients through modularization. And the track record to prove it. We now have the opportunity to accelerate service delivery and grow the advisory part of our business. At the same time we can take a position as a leading solution provider with PALMA®. This unique digital solution for product architecture data is built on a state-of-the-art platform that is faster and more capable than anything else available. I’m proud to join Modular Management and, together with my new colleagues, look forward to realizing the next steps in the growth of our company.”

Alex von Yxkull, Founder and Former CEO, Modular Management Group:

“As an investment in the future of Modular Management, the Board has been looking for a person that will strengthen our capabilities to grow. We’re therefore very excited to present Karl-Johan Linghede as new CEO. As for me, I’ll remain in the company as a working board member focusing on sales and partner relations.”

PRESS CONTACT