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    In the 10 core tools to drive growth, these more then account for 95% of all the growth programs we work with any one of our clients worldwide. So we focus on these 10 tools to develop models and best practices on how each one of these works going forward. Some of the reasons we would like to look at these 10 tools is the development of a growth pipeline, a growth pipeline that is comprehensive in that we are looking at all of the potential opportunities, we find that most of the CEO’s that we talk with, are very much focused on M&A or new product development as the source of their future growth rate, where we want to really promote the use of all 10 tools, to make sure that we have a comprehensive view going forward. We want to use the 10 tools as a check list to make ensure that we find undiscovered opportunities as well as we driving the creative process, because the global environment is increasingly competitive, we want to use a more disciplined and vigorous approach at looking at all opportunities to drive the growth rates of companies.

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    In the 10 core tools to drive growth, these more then account for 95% of all the growth programs we work with any one of our clients worldwide. So we focus on these 10 tools to develop models and best practices on how each one of these works going forward. Some of the reasons we would like to look at these 10 tools is the development of a growth pipeline, a growth pipeline that is comprehensive in that we are looking at all of the potential opportunities, we find that most of the CEO’s that we talk with, are very much focused on M&A or new product development as the source of their future growth rate, where we want to really promote the use of all 10 tools, to make sure that we have a comprehensive view going forward. We want to use the 10 tools as a check list to make ensure that we find undiscovered opportunities as well as we driving the creative process, because the global environment is increasingly competitive, we want to use a more disciplined and vigorous approach at looking at all opportunities to drive the growth rates of companies.

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    22 views32 pages

    0903 10 Core Tools To Drive Growth

    Uploaded by

    Alvin Chua
    In the 10 core tools to drive growth, these more then account for 95% of all the growth programs we work with any one of our clients worldwide. So we focus on these 10 tools to develop models and best practices on how each one of these works going forward. Some of the reasons we would like to look at these 10 tools is the development of a growth pipeline, a growth pipeline that is comprehensive in that we are looking at all of the potential opportunities, we find that most of the CEO’s that we talk with, are very much focused on M&A or new product development as the source of their future growth rate, where we want to really promote the use of all 10 tools, to make sure that we have a comprehensive view going forward. We want to use the 10 tools as a check list to make ensure that we find undiscovered opportunities as well as we driving the creative process, because the global environment is increasingly competitive, we want to use a more disciplined and vigorous approach at looking at all opportunities to drive the growth rates of companies.

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    Attribution Non-Commercial (BY-NC)
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    of 32

    APAC

    Chairman’s Series on Growth


    The 10 Core Tools To Drive Growth

    Presented by
    Craig Baty Martin Gilliland
    Global VP, IT Practice, VP, IT Go To Market Strategies
    Sydney, Australia Singapore
    Frost & Sullivan Frost & Sullivan

    March 2009
    Agenda

    1. Recap of Poll Result from Previous webcast


    2. Brief Overview: Where We Are in the Series
    3. The 10 Growth Processes
    4. Why Look at Growth Processes?
    5. Growth Process Analysis
    6. What is the Right Growth Strategy?
    7. Geographic Expansion
    8. Merger and Acquisition
    9. Outsourcing to Drive Growth
    10. New Product Launch
    11. New Product Development
    Polling Questions from February APAC CSG (Chairman’s
    Series on Growth)
    Have you cut back your 2009 business plans due What strategies are your company utilising during this
    to the fear of an economic downturn? period of economic turmoil? Please select all that apply:
    Wait
    Distribution and see
    Q3 2009 Channel strategy
    17% Strategies 12%
    Cutting
    19%
    Q4 2010 operationaal
    33% Product costs
    Developmen 19%
    t:
    Q4 2009 19%
    Market share
    50% Rebound expansion
    Strategy 12%
    Q4 2011 Beyond $ in growth 19% M&A
    0% strategy strategy
    0%
    0% 0%
    Which of the following Growth Processes is your Which member(s) of your "Growth Team" are currently
    company depending more heavily on to drive growth? driving your company's growth strategy?
    The Growth Acceleration System
    The 10 Core Tools To Drive Growth

    • Mergers & Acquisitions


    • New Product Development
    • Geographic Expansion
    • Strategic Partnering
    • New Product Launch
    • Growth Sourcing…Outsourcing
    • Distribution Channel Optimisations
    • New Customer Application
    • Competitive Strategy
    • Marketing/Sales Strategy
    Why Look at the 10 Core Tools?

    1. Optimising Impact of Growth Pipeline


    2. Comprehensive Review of All Opportunities
    3. Avoids Over-Reliance on One Growth Process
    4. Checklist System Identifies Undiscovered Opportunities
    5. Supports Innovation and the Creative Process
    6. Global Environment is Increasingly Competitive
    Annual CEO Survey on Growth Strategy
    Core Tool Analysis: 4 Measurements

    • Where is the Growth Coming From?


    • The Current Utilisation of Growth Tools and Processes
    • The Most Difficult Growth Tools to Utilise
    • Evaluation of Organisations Skills per Growth Process
    Sources of Growth…An Over-reliance on New Product
    Development

    Top Successes Regarding Growth..


    #1 Success #2 Success #3 Success
    30%
    26%

    20% 21%
    20%
    17% 16% 16%
    14% 14%14%
    12% 12% 13%
    12% 11% 11%
    10% 10%
    10% 9% 9% 8%
    7% 6% 5%
    5%

    0%
    Technology Product Marketing Competitive Customer Sales Strategy General Geographic
    Development Strategy Strategy Strategy Orientation & Growth Expansion
    Support Strategy
    Total Sample
    Selecting… 57% 47% 42% 39% 31% 31% 28%
    21%
    What are the top three areas that you have had the most success in growth?
    Growth Tools & Techniques…Underutilized Management
    Tools
    By far, Strategic Partnering is the most underutilized management tool, as reported by 34% of CEOs.
    And, while Customer Research is the second most underutilized, various other management tools appear
    to be used more often.
    Most Underutilized Management Tools...

    40%
    34%

    30%
    26%

    20% 20%
    20% 18%
    16%
    15% 14% 14% 14%

    10%

    0%
    Strategic Custom er Strategic Market Technology Sales R&D Marketing New Product
    Mergers &
    Partnering Research Planning Analysis Acquisitions Implementation Strategy Strategy Launch

    What are the main three management tools utilized by your organization to drive growth?
    Difficult Growth Processes to Implement

    As previously reported, only 2% of CEOs report they strictly utilize Mergers & Acquisitions as a growth
    strategy…and most likely the primary reason is that Mergers & Acquisitions are considered the most
    difficult tool to implement (39%). Also notable, the same proportion (34%) citing that Strategic Partnering
    is underutilized also report that it is difficult to implement…thus, this seems to explain the earlier results.

    Most Difficult Management Tools to Implement...

    39%
    40%
    34%

    30%

    22%
    20% 19%
    20%
    16% 15% 15%
    13% 12%

    10%

    0%
    Mergers & Strategic Technology Strategic New Product Market Competitive Benchmarking
    Grow th Sales Custom er
    Acquisitions Partnering Implementation Planning Launch Analysis Strategy Strategy Research

    What are the main three management tools utilized by your organization to drive growth?
    Growth Processes – The CEO’s Assessment of Skill

    Organization's Skill/Techniques
    Very Good Good Fair Poor Very Poor Not Applicable
    100%
    9% 8% 7%
    10% 10% 12% 12% 10% 8%
    10% 14%
    80%
    29% 31%
    24% 33% 37% 32% 38% 41% 47%
    36%
    60%

    40% 37%
    49% 43% 42% 40% 44% 39% 32%
    39% 32%
    20%
    21%
    12% 14% 12% 13% 9% 9% 14% 9%
    7%
    0%
    Technology R&D Strategic Growth Marketing Sales Customer Strategic Best New Product
    Implementation Planning Strategy Strategy Strategy Research Partnering Practices Launch

    Very Good/
    Good… 61% 58% 57% 54% 53% 53% 48% 46% 46% 41%

    Note: Proportions less than 5 percent are not shown.

    How would you rate your organization regarding the following growth skill/techniques?
    Geographical Expansion Model - Indicators

    Factors Description Indicators


    • Political Stability
    Business • Political stability • Degree of Openness
    Environment • Corruption

    • Economic Growth
    • Economic stability • GDP Per Capita
    Economy
    • Purchasing power • Exchange Rate
    • Inflation

    • Employment
    • Labor force • Youth Unemployment
    Labor
    • Labor cost trends • Minimum Wages
    • Labor Cost

    • Computers and Internet Users


    Infrastructure • Cost of operation • Real Estate Prices
    • Quality of Infrastructure • Telephone and Cellular Subscribers
    • Telephone Charges and Broadband Subscribers

    • Number of Graduates
    Education • Workforce availability • Graduate Enrolment Ratio
    • Language Skills - English and other languages

    • Revenues and Revenue Potential


    • Revenue potential • Revenues and Revenue Potential (Region)
    Market • Competition • Availability of Qualified staff
    Indicators
    • Resources • Number of Competitors
    • Foreign Language skills
    Geographical Expansion Model - Ranking

    Rankings 2000 2005 2010 2015


    1 UK UK UK UK
    2 Argentina Argentina Argentina Poland
    3 Czech Poland Poland Argentina
    4 Poland Germany Czech Czech
    5 Germany Czech Germany Germany

    e
    6 Hungary Hungary Hungary Hungary

    pl
    7 Slovakia Slovakia Slovakia Slovakia

    m
    8 Slovenia Slovevia Slovenia Slovenia

    Sa
    9 Lithuania Lithuania Lithuania Lithuania
    10 Estonia Estonia Estonia Estonia
    11 Latvia Serbia Latvia Latvia
    12 Croatia Croatia Croatia Croatia
    13 Serbia Latvia Serbia Serbia
    14 Macedonia Macedonia Bulgaria Bulgaria
    15 Bulgaria Bulgaria Macedonia Romania
    16 Albania Romania Romania Bosnia
    17 Bosnia Albania Albania Macedonia
    What is the Right Growth Strategy?

    ORGANIC M&A

    Advantages Advantages

    • Greater control • Speed

    • Less capital structure risk • Diversification/access to new product/


    service line, intellectual property, and
    • Involves less uncertainty capabilities
    • Allows focus on core competencies • Increase global reach and market share
    • Greater investor transparency • Acquire talent and human resources
    • Game changing potential
    • Accelerate revenue growth

    Disadvantages Disadvantages
    • Takes time and long-term focus • Integration issues
    • More reliant on own capabilities • Increased potential to destroy
    shareholder value over long term
    Key Challenges

    Ke y Challe nges to an Organic Grow th Strategy Key Barriers to a Successful M&A Strategy

    Other, 14.6% Other, 14.1%


    Talent, 26.9%
    Political, 5.4% Market Reaction, 5.0%
    Valuations, 36.1%
    Material Costs,
    5.8% Shareholder Concerns,
    7.5%

    Ideas, 10.4%
    Legal Issues, 9.1%
    Shareholder
    Cost of Capital, demand for near-
    15.4% term impact, Competition from Lack of Targets, 16.2%
    21.5% Financial Buyers
    (Private Equity), 12.0%

    Source: Frost & Sullivan


    What is the right approach?

    • M&A should be used as a tool for growth - not necessarily a strategy in itself
    • A combination of organic and inorganic is best
    • Explore and understand alternative ways of measuring success, risk, and
    growth opportunities (cost of not doing a deal)

    Organic Growth – Process Acquisition Growth - Issues


    Successful firms have higher IRR hurdle
    rates Proactive approach and opportunistic
    Disciplined capital allocation process Ongoing process
    Internal communication Setting the right expectations
    Pipeline measurement and growth Clear goals and objectives
    budgets
    Systematic due diligence takes time and
    Effective understanding of strengths and creativity
    weaknesses
    Focus on pipeline creation as well as
    Clear goals and objectives execution
    The right structure and process are important for both options
    M&A Thought Leadership

    We break the M&A process into four steps:


    1. Sector or trend overview
    2. Target specific analysis
    3. Transaction specific due diligence
    4. Post-deal integration and strategy

    Leverage specific tools and processes that support each step

    Deal Sector and Trend Target Specific Transaction Post-Deal Integration


    Origination Overview Analysis Due Diligence and Strategy
    Our Approach to Growth-Sourcing

    Our highly-skilled team of External Internal


    consultants can help you meet your
    growth objectives by: Frost & Off-shoring
    Sullivan Growth
    Outsourcing Objectives
    • Assessing the external outsourcing Model GROWTH
    opportunities utilising Frost & Sullivan ZONE &
    STRATEGY
    Growth Sourcing Model
    • Evaluating your internal growth
    objectives and execution capabilities
    • Partnering with your team to translate Financial Benefit –
    these opportunities into measurable ROI/EVA
    growth
    Internal
    Growth Sourcing Methodology

    Review of Current
    Secondary/ Financial Impact
    Outsourcing Status Quantitative
    Primary and
    and Growth and Qualitative
    Research Economic Benefit
    Objectives Analysis

    Frost & Sullivan Industry Frost & Sullivan


    Database, Country outsourcing model- Return On Investment,
    Client Briefing on economic forecasts, Destination of choice. Economic Value Add.
    Objectives and Current primary research with Growth Thought Leader: Outsourcing for growth
    Outsourcing Status successful companies in Growth Workshop, on top-line and bottom-
    industry or adjacent Operational Best Practices, line
    markets, case studies Outsource Strategy

    STRATEGIC REVIEW COMMITTEE

    Frost & Sullivan's Strategic Review Committee, composed of Senior Partners, reviews the research strategies, findings, and
    recommendations at key points throughout the project. This process is designed to ensure that 1) the project objectives are
    completely met, 2) the findings and recommendations provide the utmost strategic value to clients, and 3) the client’s
    research investment is fully maximized.
    Frost & Sullivan Growth-Sourcing Model
    F r o s t & S u lliv a n - F r o s t & S u lliv a n - U s e r - S u b U s e r - T o ta l F r o s t & S u lliv a n - U ser -
    In d ic a to r M e a s u re m e n t
    S u b W e ig h t T o ta l W e ig h t W e ig h t W e ig h t T h r e s h o ld T h r e s h o ld
    P o litic a l S ta b ility 4 0 .0 0
    B u s in e s s E n v iro n m e n t D e g re e o f O p e n n e s s 3 0 .0 0 7 .5 1
    C o rru p tio n 3 0 .0 0
    1 0 0 .0 0 0 .0 0
    F iv e Y e a r G ro w th 1 0 .0 0
    G D P P e r C a p ita 5 0 .0 0
    Econom y E x c h a n g e R a te 1 5 .0 0 7 .5 0 .7 5
    In fla tio n 1 5 .0 0
    FDI 1 0 .0 0
    1 0 0 .0 0 0 .0 0
    E m p lo ym e n t 1 2 .0 0
    Labor Y o u th U n e m p lo y m e n t 2 4 .0 0
    50 1
    M in W a g e s 2 0 .0 0
    Labor C ost 4 4 .0 0
    1 0 0 .0 0 0 .0 0
    C o m p u te rs ( p e r 1 0 0 ) 1 3 .0 0
    C o m p u te rs ( 1 0 0 0 0 0 0 ) 4 .0 0
    In te rn e t U s e rs (p e r 1 0 0 ) 1 3 .0 0
    In fra s tru c tu re In te rn e t U s e rs (p e r 1 0 0 0 ) 8 .0 0
    20 1
    R e a l e s ta te p ric e s 1 4 .0 0
    T e le p h o n e 6 .0 0
    T e l C h a rg e s 1 7 .0 0
    B ro a d b a n d S u b s c rib e rs 2 5 .0 0
    1 0 0 .0 0 0 .0 0
    G ra d u a te s 3 7 .0 0
    E d u c a tio n G ra d u a te E n ro lm e n t 1 3 .0 0 15 1
    S iz e o f E n g lis h S p e a k in g P o p u la tio n 5 0 .0 0
    1 0 0 .0 0 100 0 .0 0 0

    Business Environment
    For doing business, stable political conditions, consistent policy, and regulatory environment are important and have a greater degree of influence
    on the decisions relating to the choice of offshore locations.
    Economy
    Consistent economic growth helps in stable economic indicators such as inflation, exchange rate, and interest rate has significant impact on costs and
    business and profits.
    Labor
    For outsourcing decisions, wage differential among the countries is the key. Employment and unemployment and labor cost trends are
    Infrastructure
    Measures use and penetration of ICT technologies and trends in telephone and internet charges
    Education
    Resource availability and quality of the workforce are important determinants of location choice decisions.
    Frost & Sullivan Growth-Sourcing Model

    Rankings 2000 2005 2010 2015


    1 India India India India
    2 The fYR of Macedonia Estonia Lithuania Lithuania
    3 Serbia and Montenegro The fYR of Macedonia Estonia Estonia
    4 Estonia Serbia and Montenegro Poland Poland
    5 Bulgaria Poland Bulgaria Bulgaria
    6 Latvia Lithuania Serbia and Montenegro Serbia and Montenegro
    7 Poland Bulgaria The fYR of Macedonia Slovakia
    8 Lithuania Slovakia Latvia Latvia
    9 Croatia Croatia Slovakia The fYR of Macedonia
    10 Slovakia Hungary Croatia Croatia
    11 Czech Republic Latvia Czech Republic Czech Republic
    12 Hungary Czech Republic Hungary Rom ania
    13 Albania Rom ania Argentina Hungary
    14 Rom ania Argentina Rom ania Argentina
    15 Bosnia and Herzegovina Albania Malta Slovenia
    16 Argentina Malta Slovenia Malta
    17 Slovenia Slovenia Albania Bosnia and Herzegovina
    18 Cyprus UK Bosnia and Herzegovina Albania
    19 Malta Bosnia and Herzegovina USA USA
    20 USA Cyprus UK UK
    21 UK USA Cyprus Cyprus
    22 G erm any G erm any G erm any G erm any
    • Allows quantitative analysis of location (country and city) attractiveness
    • Detailed investigation based on 22 critical indicators
    • Allows users to assign weights
    • Built-in flexibility to factor industry-specific or company-specific issues
    • Frost & Sullivan consultants utilize model in context of company objective and industry dynamics to develop optimal strategy
    • Provides ranking for Business Environment, Economy, Labor, Infrastructure and Education. Also provides overall rankings
    Product Launch Process
    The Growth Acceleration System

    (FGP)
    Vision: What We Do for You

    What:

    Frost & Sullivan helps


    clients perform at industry
    best-in-class levels for
    growth, innovation and
    leadership
    Vision: How We Do IT

    How:

    Frost & Sullivan clients


    leverage our Growth
    Acceleration System
    which provides disciplined
    research and functional best
    practices to generate,
    evaluate and implement
    powerful growth strategies
    Vision: When Should We Start

    Now:

    Now is the time to partner


    with Frost & Sullivan and
    leverage our Growth
    Partnership Service to
    drive your career and
    company
    An Unrivaled Value Proposition to Drive Growth

    External Challenges Internal Challenges

    TEAM Research Best Practices

    Growth
    Acceleration
    Industry Insights Career Insights

    Single User-License
    Annual Membership Program
    The Growth Partnership Service: User License
    Industry-Focused Research: External Growth Environment

    • Technical Insights Research & Alerts • Growth Opportunity Newsletters

    • Country Industry Forecasts • Movers & Shakers Interviews

    • Decision Support Databases • Market Engineering Research

    • Economic Impact Articles • Market Insights

    • Analyst Briefings • Client Value Enhancement

    • Analyst Inquiry Hours • Client Councils

    • Best Practices Research • Client Portal

    • Financial Benchmarking & Analysis • Industry Tracker

    Industry and market intelligence for critical growth decision making


    The Growth Partnership Service User License
    Career-Focused Research and Services: Internal Growth Environment

    • Ask the Thought Leader Webcast


    • Growth Process Toolkits
    • Best Practice Guidebooks
    • Executive MindXchange
    • Growth Innovation & Leadership Global Congress
    • Executive Briefings
    • Growth Strategy Dialogues
    • Online Executive Forum
    • Growth Excellence Matrix Diagnostic
    • Client Councils

    Supporting the CEO & the Growth


    Team with Growth Strategy
    www.frost.com/gilglobal
    GIL GLOBAL 2009
    A global community focused on Growth, Innovation and Leadership

    May 2009 October 2009


    Kuala Lumpur
    London

    October 2009
    September 2009
    Shanghai
    San Francisco

    October 2009 December 2009

    Middle East Sao Paulo

    February 2010
    October 2009
    Tel Aviv
    India
    Next Steps

     Request a proposal for Growth Partnership Services to support you and your team to
    accelerate the growth of your company.
     Attend Frost & Sullivan Executive MindXchange best practice networking events
    (http://www.frost.com/cal) to share and address strategic challenges
     Consider Conducting a 360 Degree Growth Workshop to support your long-term growth
    strategy
     Join us at a Growth, Innovation and Leadership 2009: A Frost & Sullivan Global Congress
    on Corporate Growth (www.frost.com/gilglobal)
     Register for the next Chairman’s Series on Growth: (http://www.frost.com/growthapac)
     Schedule a Recession Strategy Session with a Frost & Sullivan Industry consultant (email
    us: growthteam@frost.com)
     Schedule a One-on-One Growth Strategy Dialogue with a Frost & Sullivan Growth
    Consultant (email us: growthteam@frost.com)
     Register for Frost & Sullivan’s Growth Opportunity Newsletter and Growth Team
    Membership e Bulletin to keep abreast of growth opportunities in your industry and best
    practices in your career track. (www.frost.com)
    Contact Us

    If you have questions or would like further information about anything we


    discussed, please send your query to the email provided below and we will
    get back to you shortly.

    Alvin Chua
    Account Manager
    Automotive, Transportation & Logistics
    DID: +65 6890 0997
    Mob: +65 9199 4566
    eMail: alvin.chua@frost.com

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