Corporate and Market Strategy

Market Expansion Strategy

Networking Products

A major networking company decided to systematically address the government market for products and services after having made a tentative entry from its base in the private sector. Its problem was that this market's customers had needs that differed significantly from those of its traditional private-sector clients. In addition, this market was controlled by a different set of VARs and system integrators from those that had led our client to success in the private sector. We helped the client determine what value propositions would appeal best to these new customers and channel partners and then formulate a set of strategies to maximize market penetration.

Competitive Strategy

Financial Information Services

Our client was hearing reports from its sales organization that a historically weak competitor was suddenly gaining market share by offering hot new products at remarkably low prices. Our client asked us to determine exactly what this competitor's new strategy was and how best to respond to it. Though a combination of secondary research, executive interviews with customers and competitive benchmarking we learned that the new product family was merely a repackaging of old wares and the competitor was achieving its new-found strength largely by competing on price and gaining wallet-share though more effective cross-selling. Further we found major weaknesses in the competitor's sales and service approaches, including rampant over-selling, problematic service implementations, and generally poor customer support. Finally we discovered that the competitor's repackaging had resulted in significantly lower service delivery costs; these lower costs in turn enabled the aggressive pricing. We then worked with our client on a portfolio of marketing and sales approaches to exploit the competitor's sales and service problems. In addition we identified several simple changes to our client's service architecture to enable him to match the competitor's service cost advantage while also improving customers' perception of service quality.

Improving Product Portfolio and Value Communications

Communications Products

One of the largest telecommunications technology vendors asked us to review the appropriateness of its portfolio of support services surrounding its core products for its largest customers. After detailed analyses of the drivers of customer value, purchase behavior, account profitability, and discounting policies, we recommended a series of changes to (1) product positioning, (2) sales approaches and customer value communications (3) relative pricing of different services, (4) realignment of products to match them with how customers want to buy them, and (5) reformulation of several offerings to better meet customer needs. Through these changes our client expects to increase revenues and profits by several hundred million dollars per annum.

Capturing Missed Profits

Information Technology Vendor

A multi-billion information technology vendor was concerned about how to achieve its full profit potential for services. The Sales organization said that services were priced too high, while the service delivery organization said that sales was 'giving away the store'. Meanwhile the overall organization had only the roughest ideas about which accounts were profitable, and what values customers ascribed to various services. After a detailed analysis of account profitability, discounting patterns, service costs at the account level, and customer perceptions of value we learned that (1) discounting was indeed out of control, (2) the core services were of high value and somewhat under-priced relative to customers' perception of value, leaving some $70-100 M in profits on the table, and (3) a second set of services needed to be significantly restructured to better meet customers requirements. As a result, the client improved the processes by which it managed discounting, established sales training programs to help the sales reps sell more on value and less on price, and redesigned the problematic offers in order to capture a several hundred million dollar revenue opportunity.

Growth Renewal Strategy/ Internet

Print and Electronic Publisher

This newly public company had recently been spun out from a Fortune 500 parent under whose ownership the business had languished. Widespread perception that the company was a shrinking business in a declining industry segment had led to a dangerously low share price, falling staff morale, and poor financial results. We developed a three-part turn-around approach consisting of:

1. Making the company the most cost effective player in its core business,
2. Developing line extensions using on Internet technology to increase delivered value
3. Leading an industry consolidation based on superior operating effectiveness

This strategy has increased value for customers, doubled EPS and share price within three years and provided rewarding careers for the staff.

Diversification

Financial Information Service

A $400 M financial information company was concerned that its revenue and profitability were very closely linked to the extremely cyclical market for initial public offerings. We were asked to identify new services that could be sold, primarily to existing customers that would help smooth the cycles and grow the business faster. We recommended offering a variety of outsourcing services that were tailored to the special needs of the financial institutions and law firms that comprised our client's core customer base. The recommended services have since become a material part of the client's business and deepened its relationships with its principal customers.

Increasing Added Value

Wireless Telecom

A major European cellular carrier wanted to add value to its basic communications service to differentiate it from the competition. Based on a carefully structured program of market research and analysis of related markets, we helped the company assemble a portfolio of information services for its most important customer segments. These services all revolved around the needs of the traveler away from home, and included such elements as wireless e-mail, hotel and restaurant reservations, automobile services and health care referrals. The client is now assembling the relevant set of partners to support a robust service portfolio.

Communications Market Strategy

Electronics and System Integration Company

This $6 B division of a Fortune 50 company had developed numerous telecommunications products and service concepts in its R&D laboratory and sought help in commercializing them. We reviewed the project portfolio and identified several multi-billion dollar product ideas. We then helped the company determine which to pursue on its own, which to develop in conjunction with partners, and which to partially spin out to take advantage of the investment community's large current appetite for communications technology companies.

Channel Strategy

Computer Products

An office equipment and computer products company recognized that the growth in their markets was shifting from the high-priced office and IT-shop equipment, which it had traditionally sold with its direct sales force, towards network printers sold through PC channels. The problem was that while the company had some competitive printers, its previous attempts to sell through PC channels had failed. We helped our client determine which products to sell through which channels, develop value propositions that would lead to channel share worth $1 B+ in new revenues among tier one and tier two PC distributors, and develop processes to manage channel conflict between the indirect channels organization and the direct sales force. The key market analysis concerned the channel partners' needs when viewed as customers of our client.

Internet Strategy

Financial Information Service

Our $4 B client was concerned that it might lose a significant fraction of its customers to new competitors offering Internet-based solutions. Using primary market research and micro economic modeling tools we determined which customers would be affected, what new products they would require, with what revenue impacts on our client, and over what time period. Based on our work, the client has accelerated development of an Internet-specific version of its core service, and has unbundled certain service elements to better meet its customers' needs for ÒopenÓ services. These new services are expected to grow to be as much as one-third of our client's revenues within five years.

Internet Spinout

Industrial Company

A $1 B century-old commercial printer was concerned that the growth in its customers' businesses was increasingly moving to on-line and away from print. We helped them define a needed set of complementary on-line offerings, identify acquisition candidates who could supply them, and acquire a successful Internet company. The acquired company has since quintupled its revenues through organic growth. In a second assignment, we helped our client accelerate growth still further by developing a process to cross-sell the Internet divisions' services through other divisions' sales forces by treating the other divisions as indirect sales channels for the Internet division.

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