Growing a Regional Player: How Platinum’s strategic planning process led to market expansion

Situation

A holding company that is a leading regional provider of building services had grown through strong delivery of services and aggressive sales. Its success attracted competitive responses in cutthroat pricing. To address this pressure from national players, the company decided to pursue growth rather than taking the lowest-cost provider position in the market. Yet senior management did not have a clear plan for the best approach.

Challenges

• Past success built on profitable performance — delivered by solid operating managers — did not transfer readily into new geographic markets without the culture and skills of the legacy business.
• Personal relationships were strong in established markets, but this did not apply in new market areas.
• Growth in past years had been opportunistic; how could enough opportunities be identified in future years?

Solution

The holding company engaged Platinum to lead a strategic planning process to drive a growth plan for expansion beyond the scope of current markets and products/services. Presidents and sales managers from each of six geographic divisions participated in a collaborative strategic planning process to identify core strengths, synergism between different divisions, market needs, competitive positions, and broader trends in the markets being served.

A five-year growth strategy was developed to acquire comparable businesses in adjacent markets. Positioning that offered a “hometown face” with national strength was adopted. And, products and services were bundled to offer enhanced building services.

A fast-response team of experienced managers and analysts was mobilized to qualify acquisition candidates. After completed transactions, common financial reporting, technology and communications platforms were then augmented by optional services in the local market. Operating managers were retained to provide seamless transition of customer relationships and operating performance. The net result was a fast, predictable due-diligence evaluation of acquisition prospects, an efficient negotiating and closing process, and a tightly managed, integration process after acquisitions were closed. The resulting reduction in overhead costs offset other expenses. New skills migrated from the parent company and best practices from companies in adjacent markets added new strength to win additional revenue at acceptable pricing and margins.

Results

Two years later, the holding company has almost doubled. Its acquisition team has expanded with more specialized skills to provide faster post-acquisition integration. All divisions are operating profitably after more than a dozen smaller acquisitions were folded into ongoing divisions.