Case studies

Case study №5 – strategic analysis of a medical equipment business

Client

We were approached by a private Bulgarian company operating within the medical equipment manufacturing, distribution and maintenance sector. Approximately 65% of the entity’s’ revenue is generated via export to most Balkan states, Hungary, Poland and Greece. The entity’s average revenue (for the last 5 years) was approx. EUR 38.1 million. The enterprise’s revenue split was: 34% manufacturing; 50% resale and distribution; 16% services.

Challenge

The client requested a full-blown in-depth strategic analysis of their current position, as well as detailed recommendations as to the future strategic direction of development for the enterprise. Management needed a stress test analysis of the business’ attributes and competencies in terms of their external environment (incl. sectoral fundamentals and competitive landscape), for the purpose of determining the company’s ability to grow and evaluating different future strategic options.

The client also required our perspective in relation to effective resource allocation, future investment considerations and key revenue drivers.

Approach

As part of completing the engagement, we performed detailed analysis of the company’s business performance via:

  • SWOT analysis
  • PRIMO-F analysis
  • 5C analysis

We also spend some time reviewing the existing business model as a whole, which we carried out via detailed Value Chain analysis. Our consultants spent some time reviewing key organisational elements by applying the concepts of the McKinsey 7-S Framework.

As far the external environment analysis is concerned, we focused on applying the following tools:

  • PESTEL analysis
  • Porter’s 5 forces

We reviewed in detail the product and industry cycles for the entity, for the purpose of determining the phase of development the company exists in. This was achieved mainly through sector benchmark and analysis of key fundamentals for the industry, as well as the following analysis tools:

  • Ansoff matrix
  • BCG matrix

We made multiple recommendations on the efficient resource allocation, based on the 9-M model, as well as the concepts of several popular operational models:

  • 4-Vs
  • Just in Time (JIT)
  • Total quality management (TQM)
  • Supply chain management (SCM)

Using the SMART goal-setting strategy we laid out our vision for the future business-development actions to be taken by management and presented all potential risks that the business could face going down this road – we also suggested risk management strategies for these, based on the TARA model. Furthermore, we set-up a balanced scorecard for the client to use as a results-measuring technique going forward.

Results

We completed the engagement within 13 business days and delivered a detailed segmented report addressing the company’s internal and external environment, analysing the existing business model and resource allocation, benchmarking product and company positioning, as well as introducing future development goals and investment opportunities. The report listed out numerous actionable recommendations and best practice examples in all of the above areas. Two weeks later, we were copied in a company-wide email communication, which detailed the introduction of several process and organisational changes to reflect some of our most crucial recommendations. We carry out quarterly catch-up calls with the client to assess progress, discuss recent developments and address concerns.