Case Study: market growth strategy. - Selection of slides

Transcription

1 Case Study: market growth strategy - Selection of slides 1

2 Objective of the collaboration Situation: The Client, global AC player, would like to enhance its positioning in the USA In this sense, the overall aim of the collaboration would be: 1. To help The Client obtain a thorough market segmentation and its future development in the next 3-5 years 2. To assess The Client s position in the US against its competitors 3. To help the client develop the go-to-market strategy and define recommendations 4. Define action plans and business case 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

3 Key questions DELIVERABLES MAIN ACTIVITIES Methodology The methodology focused on assessing the options of entering and growing each of the selected markets, i.e. regions/channels/clients Define Market Attractiveness Define GO TO MARKET Action Plan and Business case Revenue Potential Cost to serve Assessment of options: Channel approach Client approach Sourcing model Regional markets: Life cycle Size Growth Cost calculations: Channel Product Marketing Determine points of indifference for selecting GO- TO-MARKET Model Investment to make Forecasted P&L Cash Flows Risks Which regions should The Client focus on? How should The Client attack each region? What is the value of competing successfully? 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

4 New York Pennsylvania Illinois New Jersey California Texas Massachusetts Maryland Ohio Connecticut Florida Michigan Missouri Wisconsin Indiana Washington Georgia Minnesota Arizona Tennessee North Carolina Kansas Colorado Virginia New Hampshire Nevada Kentucky Oregon Alabama Utah South Carolina Delaware Nebraska Iowa Louisiana Maine Arkansas Rhode Island Oklahoma Idaho Montana South Dakota Hawaii New Mexico Wyoming Mississippi West Virginia Vermont Alaska North Dakota There are three large groups of market sizes Large: states with sales over US$20 million accumulating 55% Medium: states with sales ranging US$10-20 million accumulating some 20% Small: states with sales under US$10 million accumulating 25% Example of output: market size by state Sales $Million Sales per state Accumulated % Large Medium Small 100,0% 80, , , ,0 Accumulated Product 0 0,0 Source: US Census. 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 4

5 Example of output: prioritisation - target setting Should The Client target a second tier position it would have to undertake a full force market entry Fully deployed product portfolio Access to all relevant market segments Full regional presence Market share Market shares US$ 30% 29% 20 24% 14% Tier 3 Tier 2 Tier % 4% 4% 3% 3% 0 1% 1% 1% 1% 1% Compet 1 Compet 2 Compet 3 Compet 4 Compet 6 Compet 7 Compet 8 Compet 9Compet 10Compet 11Compet 12Compet 13The Client Sales US$Million Second tier position is used for basic hypothetical analysis Source: interviews with industry 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 5

6 Example of output: action plan infrastructure development In order to tackle the US market s geographical dispersion, The Client ought to follow the below regional infrastructure development Regional overview Basic scenario Road Map Year 1 Set central infrastructure 4 US$ Million >40 >25-35 >15-25 >8-15 < Year 2 Deploy South office to access South and West markets Year 3 Deploy Mid West office Deploy West office After Year 3: Consolidate regions By gaining reach: Appoint new /national regional clients by offering local services Appoint new Sate/region clients from local offices By gaining depth: Grow existing clients, both national and local by offering local services 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 6

7 Example of output: business case forecast base scenario Forecasted sales will exceed US$100 million by 2014 in the base scenario -Deployment of regional infrastructure will take place when break even points are reached US$ Million The Client s Sales Forecast by Region (Base Scenario) US$ , ,6 15, ,5 4,4 4,9 11,9 Year ,4 7,3 6,1 20,3 Year ,5 10,6 9,3 30,5 Year3 12,6 16,7 37,5 Year 4 22,1 48,6 Year 5 West South Mid west Northeast Market Share 5% 6% 9% 12% 15% 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 7

8 Example of output: business case initial investments Where initial entry investments would require both HQ and regional effort Costs have been estimated at market averages Initial team deployment considers 50% of the staff cost in the first year as investment Initial marketing campaign is considered as 50% of the first year marketing cost Initial investment US$ 2,8 Documentation Product Showroom Training Lab Systems Marketing Internal Training Initial Team Year 1 Source: The Client, interviews with industry players, BMC Analysis 8 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

9 The proposed US operation would yield EBITDA of US$ 14 Million by year 5 Example of output: business case EBITDA base scenario US$ Million 15 EBITDA US$M Year 1 Year 2 Year 3 Year 4 Year 5 EBITDA % SALES 15% 8% 7% 11% 14% Deployment of regional offices Source: The Client, interviews with industry players, BMC Analysis 9 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 9

10 Deliverables The outcome of the study included the following deliverables: Analysis of the AC market environment, in terms of: Size and predictive forecast model, regional sales analysis, routes to market, competitors, legal issues Identification of main clients and customer segments in terms of size, cost structure, distribution channels Analysis of the Client s main competitors, in terms of: Product range, commercial network, services, pricing strategy Prioritisation of segments that can be best catered with The Client s products Set up of potential scenario based target sales in 3-5 years Identification of must have competencies, channels and infrastructure Development of action plans necessary to achieve the agreed targets Development of business plan, detailing resources needed, cash flow projections and ROI projections 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 10

11 Project outcome BMC helped The Client develop an strategy to enhance their AC business in the USA: Pursued a detailed analysis of The Client s performance regarding its evolution, organisation and operations, financial indicators etc Reviewed the value proposition and explored segments that represented accessible growth opportunities to The Client, including products, clients and regional coverage Developed a business case with different investment, profitability and growth scenarios 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 11

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