Case Study: strategy redirection and growth strategy
- Selection of slides
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Objective of the collaboration
•
Situation: ‘The Client’, strong regional player in the air conditioning market
located in Southern Europe, would like to redefine the company strategy in order
to increase profitability.
•
In this sense, the overall aim of the collaboration would be:
1.
To help ‘The Client’ identify and evaluate the current and future market
trends
2.
To help ‘The Client’ identify where most value is generated
3.
To help ‘The Client’ identify highest growth areas
4.
Development of business plan
This presentation has been elaborated by BSRIA Management Consultancy (BMC) exclusively for the use of its client, and will not be used without written consent of BMC
2
Proposed methodology
BMC proposes the following methodology
Understanding of
market variables
Assessment of
Client‘s current
position
Prioritisation of
market segments
Business plan &
business case
Competitor analysis
This presentation has been elaborated by BSRIA Management Consultancy (BMC) exclusively for the use of its client, and will not be used without written consent of BMC
3
Example of output: market forecast
The project is initiated with a deep understanding of key market forces and the development of scenario
based forecast models of unequalled detail...
Forecast 2017
(USD million)
7,000
6,000
5,667
Industry Consensus (CAGR: 15%)
5,330
5,000
4,525
3,956
4,000
BMC aggressive (CAGR: 10%)
BMC Forecast (CAGR: 7%)
BMC conservative (CAGR: 4%)
3,271
3,000
2012
2013
2014
2015
2016
2017
Source: BMC estimates
This presentation has been elaborated by BSRIA Management Consultancy (BMC) exclusively for the use of its client, and will not be used without written consent of BMC
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Example of output : channel margins
… and other relevant variables such as channel margins
Margins in % of purchase price for each player
(without Installation)
34%
35%
30
Margins in €
(without Installation)
3.500
30%
3.000
27%
25%
2.650
25%
2.118
20
2.000
1.604
1.582
1.275
10
8%
9%
9%
1.000
Installers
Installers
609
Wholesalers
0
Segment SegmentSegment SegmentSegment
1
2
3
4
5
0
658
398
Wholesalers
Segment SegmentSegment SegmentSegment
1
2
3
4
5
Source: industry interviews, BMC analysis
This presentation has been elaborated by BSRIA Management Consultancy (BMC) exclusively for the use of its client, and will not be used without written consent of BMC
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Example of output: positioning
The project continues with the assessment of The Client’s strengths and weaknesses
The Client‘s Positioning and Competitive Advantage
Product
• Efficient
• Reliable
• Price
competitive
• Durable
• Footprint
Manufacture
and
Suppliers
• Design?
• Flexible,
customized
manufacture?
• Assembly
• Supplier
development, or
supplier search?
• Technology
owner?
Clients
• Focus on few
clients?
• Good
relationships with
them?
• Sales force
analysis,
strengths, risks
Brand
• Client
perception
• Quality?
• Technology?
Competitors
• Locally?
• Sales force
transfer?
• Cost of
replicating
business model?
After sale
Service
• Service
analysis
• Expertise
need?
• Training and
Support?
This analysis should be done to find The Client’s main competitive strengths and
weaknesses.
This presentation has been elaborated by BSRIA Management Consultancy (BMC) exclusively for the use of its client, and will not be used without written consent of BMC
6
Example of output: strategic direction
Once segments where The Client is performing better and worse than competition are identified,
possibilities for operational improvement and/or growth opportunities via M&A are studied...
Value Achieved
20%
Return
on Sales
Improved Margin
on Increased
Business
Improved
strategic
position
10%
Operational
improvement
Profit Improvement Program
Target on Current
Business
0%
0.2x
1x
Relative Market Share
10x
Source: BMC analysis
This presentation has been elaborated by BSRIA Management Consultancy (BMC) exclusively for the use of its client, and will not be used without written consent of BMC
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Example of output: prioritisation of markets
Finally, the prioritisation is done taking into account the potential profitability of the market and the
perceived difficulty of success for The Client...
High
Priority
Priority
three
one
Priority
four
Priority
two
Low
Low
High
Ability to achieve success (Lever =
Capabilities for margin
maintenance/enhancement in the short term)
Source: BMC analysis
This presentation has been elaborated by BSRIA Management Consultancy (BMC) exclusively for the use of its client, and will not be used without written consent of BMC
8
Example of output: business case – necessary resources
A budget is established listing and quantifying necessary resources and investment to grow or redefine the
business direction…
Initial investment
Concept
1000€
(%)
• Productive Structure
1.000
16,0%
• Distribution and sales Structure
800
8,0%
• Service structure
300
4,0%
• Training and consulting
300
4,0%
40
0,5%
120
1,6%
• Management salaries
1.144
15,2%
• Salaries
1.246
16,6%
• Others
550
7,3%
• Initial Marketing Campaign
• Trip expenses
Total Initial Investment
7.500
Chronological projection of necessary cash flow
162 €
Jan’09
52 €
60 €
189 €
101 €
Feb’09
Mar’09
Apr’09
May’09
2.181 €
Jun’09
2.851 €
951 €
951 €
Jul’09
Aug’09
Sep’09
Operation’s
start
Oct’09
Nov’09
Dic’09
Source: interviews with local players, BMC analysis
This presentation has been elaborated by BSRIA Management Consultancy (BMC) exclusively for the use of its client, and will not be used without written consent of BMC
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Example of output: business case – P&L and Cash flow
…and financial projections are offered with enough detail to make educated decisions
Operational cash flow
(1000€)
P&L detail
MM €
50
43,4
60,524
40
30
30,181
23,8
-6,6
-1,8
-1,2 -1,1
-0,7
12,3
46% 54% 16% 5% 33%
3%
3%
2%
447
-4,879
Sales Production Gross Personnel LogisticLogistic Direct Indirect Technical Commercial
cost margin
cost marginsales cost sales cost assistance margin
% Sales
2012
2013
15,3
10
0
31,141
18,558
-19,6
20
29,960
26%
Q1-09
-2,962
-3,345 -3,489
-3,801
-8,680
-18,477
-11,642
-14,988
Q2-09
Q3-09
Q4-09
Q1-10
302
577
-253
-18,730
Q2-10
-18,283
Q3-10
-17,981
Q4-10
2011
Source: BMC analysis
This presentation has been elaborated by BSRIA Management Consultancy (BMC) exclusively for the use of its client, and will not be used without written consent of BMC
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Deliverables
The outcome of the study included the following deliverables:


Current and forecasted market picture, in terms of

Market segment

Technological trends

Distribution channels

End-users
Competitor analysis, in terms of

Products and services offered

Business volume

Profitability by segment

Identification of commoditised and differentiating factors

Assessment of the current competitive position of The Client on its own and compared to main
competitors

Identification and valuation of technological, manufacturing and commercial gaps The Client needs
to cover for selected business segments

Segment prioritisation based on the expected ROI and success probabilities of The Client

Development of 3-5 year business plan and business case

Action plans to achieve the agreed potential targets
This presentation has been elaborated by BSRIA Management Consultancy (BMC) exclusively for the use of its client, and will not be used without written consent of BMC
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Project outcome
BMC helped The Client redefine their business strategy, having:
•
Identified key technology trends, markets drivers and differentiating
factors
•
Obtained a benchmark of The Client‘s performance indicators compared to
main competitors
•
Prioritised market segments, accounting for required resources, expected
ROI, potential risks and probability of success
This presentation has been elaborated by BSRIA Management Consultancy (BMC) exclusively for the use of its client, and will not be used without written consent of BMC
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Old Bracknell Lane West
Paseo de la Castellana 127, 1A
Bracknell Berkshire RG12 7 AH
Madrid 28046
United Kingdom
Spain
+44 (0) 1344 465600
+34 91 185 42 37
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