by Elizabeth Hines | Aug 20, 2015 | Blog, Content Marketing, Leadership, Marketing, Strategy
All executives understand the significance, for their company and for their career, of creating and implementing strategy. Because of the significance of strategy, and because strategy forces executives to confront the future, many find it scary.
Savvy executives understand that not all business challenges can be resolved from inside their organization. Savvy executives rely on external experts or strategic advisors to know their internal business, know the external marketplace, and have the domain expertise to combine this knowledge into strategies that will work for today and the long term.
If you have ever thought about getting some help from the “outside” but weren’t sure of the value it would create for you and your organization?
Here are 5 reasons why you should use a strategic advisor:
1. Strategic Advisors fill the “holes” in an organization that exist in a particular discipline, experience level, or accumulated knowledge base. As a result, they can speed decision making, time to market, or cost reductions with proven solutions and without the pain of trial and error.
2. Strategic Advisors offer a viewpoint based on facts and real experiences; not on politics or prejudice. The advice they can offer is “agenda free”. Yes, the truth sometimes hurts, but savvy leaders know that the intellectual honesty that a strategic advisor brings drives innovation and growth.
3. Strategic Advisors know when to stretch the targets. Whether cost reduction, sales growth or both. They have the experience to know when to step on the gas and when to apply the brakes…without driving you off the road. Their external expertise can put you and your team in a position to be successful for the short and long term.
4. Strategic Advisors are always “up to speed”. They have a niche, know it well, and spend time and resources keeping abreast of the trends and the companies driving those trends. This “multiplier-effect” cannot be duplicated internally without a significant addition to headcount and expense.
5. Strategic Advisors are extremely cost effective. They allow you to buy the highest level of experience, personal network and know-how, applied to your toughest challenges, for just the right amount of time.
Combining the best from inside your organization with the brightest from the outside is a winning formula. Smart business leaders solve this equation time and time again and reap the benefits listed above.
Fronetics Strategic Advisors is a leading management consulting firm. Our firm works with companies to identify and execute strategies for growth and value creation.
by Elizabeth Hines | Aug 19, 2015 | Blog, Data/Analytics, Strategy
Understanding your financial metrics at a granular level is important in that it allows for a true understanding of what is happening, and what is not. It enables you to drill down and appreciate, for example, similarities, differences, and outliers. Being informed at a granular level enables better decision-making when it comes to determining how to increase profits. How often does one need to look at these metrics and how does one evaluate and react to numbers?
The frequency with which to look metrics depends upon the area of business. For example, inventory flows and manufacturing output should be looked at on a daily basis. Your sales pipeline, on the other hand, should be looked at on a weekly basis, and your financials should be looked at monthly.
Once a schedule has been established, the question is what to do with the data – how should the data be evaluated and when is it time to act? The reality is that there is no hard and fast answer to this question. When to act is dependent upon the type of business, its typical cycle, and the company itself. It is therefore important to develop a database that captures your metrics. This database should be updated with the same frequency that the data is collected (see above for suggested frequency). A historical database will enable you to quickly identify a data point that is deviating, positive or negative, from the historical. When this happens, it is time to act.
Fronetics Strategic Advisors is a leading management consulting firm. Our firm works with companies to identify and execute strategies for growth and value creation.
Whether it is a wholesale food distributor seeking guidance on how to define and execute corporate strategy; a telematics firm needing high quality content on a consistent basis; a real estate firm looking for a marketing partner; or a supply chain firm in need of interim management, our clients rely on Fronetics to help them navigate through critical junctures, meet their toughest challenges, and take advantage of opportunities. We deliver high-impact results.
We advise and work with companies on their most critical issues and opportunities: strategy, marketing, organization, talent acquisition, performance management, and M&A support.
We have deep expertise and a proven track record in a broad range of industries including: supply chain, real estate, software, and logistics.
by Elizabeth Hines | Aug 17, 2015 | Blog, Leadership, Strategy
Although our economy has rebounded since the 2008 downturn we have come to realize that the days of abundant resources are gone. Our current and future economic reality consists of scarce resources and a shrinking opportunity base. Managers face the challenge of expanding their business and reducing their spending, while still making meaningful progress now and into the future.
Whether you are a small, mid-market, or Fortune 500 company, you will recognize the challenge of reconciling your management needs in the face of budget reductions. Doing things the same old way is not effective. You need a way to quickly turbo charge your business without breaking the bank. The question remains — how? Leading companies have used a secret weapon against these challenges for years: interim management services strategy.
Here are 4 questions to ask yourself to determine if interim management services are right for you:
- In your current or last budget cycle have you been asked to raise your profit targets with flat or reduced expenses?
- Do you have a customer or market segment that is a good fit for your company, but you don’t have the resources or time to explore, define and win that business?
- Do you need management expertise in a specific area, but don’t want to make a full time hire or can’t afford to make one?
- Do you have a window of opportunity to make a meaningful business move but can’t afford the ramp up time or learning curve to make the most of it?
If you answered yes to any of the above questions, an interim management services strategy is a weapon you should think about using too. Think of it as “management as a service”. A model designed to provide specific executive, management, sales or operational expertise when and where you need it, for exactly as long as you need it, at a fraction of the time and cost expense of hiring, assimilating and assigning a full-time professional.
Interim management services allow you to make meaningful progress in your strategic initiatives without incurring a large upfront investment in time, people, or budget. It allows you to easily navigate unique challenges, fill leadership voids during transitions, or obtain expertise on special projects and initiatives. It’s effective and efficient talent, when you need it, for how long your needs exist.
Add an interim management strategy to your strategic arsenal and watch your business grow.
Fronetics Strategic Advisors is a leading management consulting firm. Our firm works with companies to identify and execute strategies for growth and value creation.
Whether it is a wholesale food distributor seeking guidance on how to define and execute corporate strategy; a telematics firm needing high quality content on a consistent basis; a real estate firm looking for a marketing partner; or a supply chain firm in need of interim management, our clients rely on Fronetics to help them navigate through critical junctures, meet their toughest challenges, and take advantage of opportunities. We deliver high-impact results.
We advise and work with companies on their most critical issues and opportunities: strategy, marketing, organization, talent acquisition, performance management, and M&A support.
We have deep expertise and a proven track record in a broad range of industries including: supply chain, real estate, software, and logistics.
by Elizabeth Hines | Aug 17, 2015 | Blog, Leadership, Strategy
Although our economy has rebounded since the 2008 downturn we have come to realize that the days of abundant resources are gone. Our current and future economic reality consists of scarce resources and a shrinking opportunity base. Managers face the challenge of expanding their business and reducing their spending, while still making meaningful progress now and into the future.
Whether you are a small, mid-market, or Fortune 500 company, you will recognize the challenge of reconciling your management needs in the face of budget reductions. Doing things the same old way is not effective. You need a way to quickly turbo charge your business without breaking the bank. The question remains — how? Leading companies have used a secret weapon against these challenges for years: interim management services strategy.
Here are 4 questions to ask yourself to determine if interim management services are right for you:
- In your current or last budget cycle have you been asked to raise your profit targets with flat or reduced expenses?
- Do you have a customer or market segment that is a good fit for your company, but you don’t have the resources or time to explore, define and win that business?
- Do you need management expertise in a specific area, but don’t want to make a full time hire or can’t afford to make one?
- Do you have a window of opportunity to make a meaningful business move but can’t afford the ramp up time or learning curve to make the most of it?
If you answered yes to any of the above questions, an interim management services strategy is a weapon you should think about using too. Think of it as “management as a service”. A model designed to provide specific executive, management, sales or operational expertise when and where you need it, for exactly as long as you need it, at a fraction of the time and cost expense of hiring, assimilating and assigning a full-time professional.
Interim management services allow you to make meaningful progress in your strategic initiatives without incurring a large upfront investment in time, people, or budget. It allows you to easily navigate unique challenges, fill leadership voids during transitions, or obtain expertise on special projects and initiatives. It’s effective and efficient talent, when you need it, for how long your needs exist.
Add an interim management strategy to your strategic arsenal and watch your business grow.
Fronetics Strategic Advisors is a leading management consulting firm. Our firm works with companies to identify and execute strategies for growth and value creation.
Whether it is a wholesale food distributor seeking guidance on how to define and execute corporate strategy; a telematics firm needing high quality content on a consistent basis; a real estate firm looking for a marketing partner; or a supply chain firm in need of interim management, our clients rely on Fronetics to help them navigate through critical junctures, meet their toughest challenges, and take advantage of opportunities. We deliver high-impact results.
We advise and work with companies on their most critical issues and opportunities: strategy, marketing, organization, talent acquisition, performance management, and M&A support.
We have deep expertise and a proven track record in a broad range of industries including: supply chain, real estate, software, and logistics.
by Elizabeth Hines | Aug 12, 2015 | Blog, Strategy, Supply Chain
With today’s merger and acquisition (M&A) activity at the highest level since 2007, up 38% over the same period last year, there’s been a great deal of shifting lately. In the high-tech industry, analysts are following a particular trend among original equipment manufacturers (OEMs) – mergers and acquisitions of niche aftermarket service industry participants. Electronic Purchasing Strategies writes about the aftermarket industry: “The aftermarket has long been just an afterthought to the sales and marketing processes but today more and more OEMs have finally begun to realize its strategic importance as a competitive differentiator.” These types of deals continue to become increasingly attractive because of the upside opportunities they present; consequently, acquirers need to fully understand the complexities involved in positioning their companies with such adjoining business growth.
What makes small, niche aftermarket service industry participants attractive?
In order to answer this, we must first understand the context of aftermarket services. When referring to the high-tech space, the term “aftermarket services” encompasses the services commonly referred to as technical support; field support; service parts logistics; electronics repair; asset recovery; data destruction; and e-cycling. These service markets have been historically served by specialized providers, each delivering their niche service offering (such as service parts logistics) to a select group of customers.
Typically, their customer density limits are bound by either a specific relationship base or the capital needed to adequately service their customers and keep them coming back. These companies can range in size from $10s of millions in revenue to $100s of millions in revenue (but typically fall between $20 million and $100 million in annual revenue). Due to the fragmentation of their service offerings and a size and geography limitation, this marketplace grew into a sizeable cottage industry with many participants servicing the major brands in the high-tech space. Even more interesting, their gross profit margins can range from approximately 25-to-50-plus percent. These margins are fairly sizeable in an overall industry that considers mid-teens as respectable gross profit margins. Due to these industry characteristics, it’s not hard to see why acquisition-minded participants in this space have been active.
What does a “typical” acquirer look like?
The typical acquirer of these aftermarket services companies is a billions-in-revenue national or multi-national organization. These organizations enjoy gross profit margins in the mid-teens and have typically grown through vertical consolidation methods through which they get bigger revenue numbers but similar financial results on a percentage basis.
What these larger acquirers bring to the table is cash to invest, a global customer base and a platform to service them from. What the aftermarket service company brings to the table is an adjacent revenue opportunity for the acquirer—as opposed to the historical vertical acquisition strategy—that comes with double or triple the gross profit percentage. When you spread that over the thousands of customers the acquirer has relationships with, it adds up quickly in terms of net income and earnings per share.
While that’s really good news, due to the fragmentation of the services marketplace, in order to have a robust offering and realize that potential, one needs to acquire more than a handful of these service providers. And that’s exactly what such large acquirers have been doing. They have been stringing together adjacent and complimentary services to their existing businesses, thus positioning themselves for margin expansion in the longer term—a winning strategy.
Is this truly bringing benefit to the marketplace for customers?
Let’s first look at it from each of the constituent’s perspectives. The customer now has the ability to access services for every phase of their product lifecycle—from design to de-manufacture and all of the services management portfolios in between. And if they choose, they can gain leverage by doing this within a handful of qualified vendors. Prior to these acquisitions, it was a multi-vendor, multi-geography, multi-service offering. Anyone who lived this will tell you that just the tracking of vendor performance will keep a team busy let alone leave time for any innovation in one area. Those economies alone would sell some purchasing professionals on the idea.
How do acquirers benefit from these types of acquisitions?
From the acquirer’s perspective, it enables new, more profitable and less commoditized ways to interact with existing customers and gain new ones. All of this activity should lead to higher levels of operating income as well as higher earnings per share all driven by the higher margin profile of these services. But because these acquisitions come in small “chunks,” acquirers need to be thoughtful about their target companies as well as their go-to market strategies. Developing synergies with existing sales and service teams goes a long way in this area.
What do aftermarket services industry participants stand to gain?
For aftermarket services industry participants, this M&A activity unlocks value for their businesses that would otherwise go unrealized. Most of these organizations run undercapitalized and with some level of debt service (long or short term). This activity allows owners and/or shareholders a way to break that cycle and reset their balance sheets. It also offers the opportunity to go beyond their historical customer and capital constraints and really grow their businesses in ways that would not have been possible without a strategic acquirer. Additionally, new participants now have an “end-game-strategy” as long as their business strategy, technical competency and service delivery are carefully thought out.
Looking forward: What are the predictions for both short & long-term growth?
In the short term, we will continue to see more acquisition activity in these areas. There are still good aftermarket service companies in the marketplace and there are still holes in the service offerings of the larger acquirers. As these activities mature, we will see the industry benefits mentioned earlier really begin to multiply. In the longer term, as the acquisition and go-to market strategies become more refined and the service offerings more fine-tuned, these benefits will really have a lasting impact on how customers access these services and from whom. Not to mention, the positive and long lasting bottom-line impact to the service vendor. The only thing left to do is execute.
Fronetics Strategic Advisors is a leading management consulting firm. When it comes to M&A, our firm is able to execute from target identification through post-deal integration and value creation. At Fronetics Strategic Advisors we work with our clients to build and capture value.
