Mr. Donald Rheault

GLG News^SM Analyses by Donald Rheault(?)

The need for Cloud Selling and Lean Selling

September 7, 2009

Analysis of:How to Stay Relevant in Sales | blog.inc.com

Sales forces are structured now as they have been for decades, even as some of the software management tools have evolved. A basic redesign is necessary.Those companies using reps will come out of the recession with better balance sheets and more orders because of a continual presence at their customers versus companies that have cut their direct sales forces..

Companies losing market share

June 8, 2009

Analysis of:10 companies in trouble | www.eetimes.com

There are many companies selling electronic components that are losing market share quietly and persistently. This will be evident after the rebound. And they are heavily concentrated in the analog IC area. There are several ways to sell your ICs into the OEM market: a direct sales force, through distribution, and through manufacturer's reps. Intel has a fine, dominant direct force with a fairly small, identified account base. The analog/mixed signal and discrete IC companies need to win designs at a broad base of accounts necessitating a large sales force. In a declining market the rep force earns less but keeps their number of sales people intact- a variable cost of sales. Companies such as Analog Devices, National, and Fairchild among others are decreasing their sales people because they don't have a variable cost of sales model. This will result in fewer deign wins now, resulting in a slower emergence from the downturn and a significant loss of market share.

Infineon should gain market share coming out of this downturn.

February 6, 2009

Analysis of:Infineon Gains After Boosting Savings Target, Reducing Spending | www.bloomberg.com

Infineon has recently cut costs by reducing capital spending and layoffs, but it has wisely kept its independent rep force in place. The benefit of this force is in its variable cost of sales: the number of sales people remain constant but cost less and get hungrier. Many of Infineons competitors have a direct, fixed sales cost force. Some of these competitors have even been laying off sales personnel. By capturing design slots during the downturn Infineon should come out quicker and stronger than TI, National etc.

SMIC may have bottomed due to increased demand in China but US semi companies may not benefit.

February 6, 2009

Analysis of:Semi Manufacturing Says Orders May Have ‘Bottomed’ (Update1) | www.bloomberg.com

If there is a turning point in demand ahead for US companies only some will see it because some have been "eating their seed corn". If the market does turn this summer a large number of semi companies ,especially in the analog/mixed signal market, will not be on the new systems being developed because they have cut their sales forces when they should have gone to a variable cost of sales. The one saving grace of this recession is that it has demonstrated the superiority of the manufacturing foundry model-variable, not fixed manufacturing cost. National Semi in the old days always picked up market share on TI and Fairchild because they kept their independent rep sales force in place-although making less money, and hungrier- gathering design wins during the down time. If the semi companies at least haven't aggressively redone their sales budgets and commission plans they will end up with a demoralized and less aggressive sales force.

The short trerm outlook for Taiwan Semi is not good, but the long term looks good.

January 7, 2009

Analysis of:Taiwan Semi Shares Fall on Only ‘Sell’ Recommendation | www.bloomberg.com

Selling Taiwan Semi now would seem to be a bad bet because this might be close to the bottom of the cycle for semi stocks, and particularly for Taiwan Semi, because the outsourcing model is winning.It is predicted that those companies outsourcing their manufacturing are better off now without large, fixed costs. Most analysts argue that the semi market will start to go up by June, and it should go up fast due to lack of a large inventory overhang at customers and distributors. As the feature sizes of semis go below 45nm Taiwan Semi will be in a strong position as their competitors and semi manufacturers slow down capital spending. Apart from normal replacement cycles there is no compelling upgrades to the computer business market. But the emerging Chinese standards and overall demand for mobil phones and small form factor computers should drive the market in 2009.

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