Businessmodel of NEC

Customer Segments

NEC has a mass market business model, with no significant differentiation between customers. The company’s customer base primarily includes private corporations, telecom carriers, governments, and other public institutions.

Value Proposition

NEC offers two primary value propositions: innovation and brand/status.

The company has always placed a strong emphasis on innovation. It states that one of its main purposes is to create the platform technology needed to respond to complex challenges involved in social infrastructure. It is an active supporter of global open innovation, which is why it introduced NEC Laboratories Singapore. The initiative promotes collaboration with partners and customers.

The company has developed a strong brand as a result of its success. This is reflected by the many honors it has received. Specific forms of recognition include selection as the #3 Enterprise Telephony Equipment provider in the world by Gartner, selection as a “Top 100 Global Innovator” by Thomson Reuters, a ranking in the Global 500 (*Fortune *magazine), and a ranking in the FTSE Good Global Index for the 13th consecutive year in 2014.

Channels

NEC’s main channel is its direct sales team, whose members operate from 64 branch offices and sites. The company promotes its offerings through its website, social media pages, and attendance at in-person events such as conferences and exhibitions.

Customer Relationships

NEC’s customer relationship is primarily of a self-service nature. Customers utilize its products and services while having limited interaction with employees. The company’s website has several self-help resources, including white papers, case studies, software and driver downloads, and answers to frequently asked questions. That said, there is a personal assistance element in the form of phone and e-mail support.

Key Activities

NEC’s business model entails designing, developing, and manufacturing its products. The company relies on third-party suppliers for the parts for many of its solutions.

Key Partners

NEC maintains the following key partnerships:

Channel Partners – NEC works with resellers, distributors, and authorized solution integrators to get its products to their customers. Specific programs include NEC UNIVERGE Partners, the NEC ExpressPartner Program, and NEC Channel Partner Advantage.

Industry Consultants – NEC provides information and resources to assist consultants who have clients that use its products and services.

Industry Standards Group – NEC maintains relationships with a number of technology industry groups. These include Green Grid and the Storage Networking Industry Association.

Marketplace Alliances – NEC works with marketplace innovators and leaders who utilize its portfolio of Nblock professional and converged technology services. Its most prominent alliance is with Iron Mountain, Inc.

Strategic Alliances – NEC maintains relationships with a number of top technology firms in which they partner on the development of certain solutions. These partners include Cisco, Dell, IBM, Intel, Microsoft, Oracle, Red Hat, SAP, Stratus, and VMware.

Key Resources

NEC’s main resource is its staff of engineering employees who work to design and develop its innovations. The company’s key physical resource is its group of nine research laboratories throughout the world that employ 1,000 researchers. NEC places a high priority on its intellectual property, and as of March 2015 it owned 65,000 patents, including 22,000 patents in Japan.

Cost Structure

NEC has a value-driven structure, aiming to provide a premium proposition through high-quality products and service. Its biggest cost driver is cost of sales, a variable expense. Other major drivers are in the areas of selling/administration and research and development.

Revenue Streams

NEC has one revenue stream: the revenues it generates from the sale of its products and services. No information was found regarding its pricing, as sales personnel must be contacted directly.