EVP of a key services business unit within a global CRO is charged with exploring new ways of increasing revenue. Market share and new customer acquisition rates have been stagnate the last 12-18 months. The client’s competitors are acquiring and launching new service offerings aimed at meeting evolving market needs.
The EVP has been tasked by his CEO to recommend if acquisition, internal development, or expanding into new markets with existing services is the optimal remedy for disappointing growth rates and to combat the emerging competitive threat. Before making his recommendation, the EVP first wanted to understand his firm’s current position in the market, relative to competitors and customer expectations.
To address client’s needs, Kineticos conducted a Comparative Advantage Analysis addressing the following components:
- Market Assessment, including:
- Market Segmentation
- Market Analysis
- Growth Rates
- Cost Structure
- Distribution Channels
- Customer Profile
- Voice of customer
- Buying patterns of client’s customers
- Customer Perception of our client
- Background and Footprint
- Corporate Strategies
- Product Distribution and Sales Strategies
- Competitor Analysis
- Differentiation Analysis
- Comparative Review
Client was targeting a growth market with a product valued by customers and should therefore be experiencing revenue growth, not stagnation. While target customers respected our client’s ability to deliver as much as their competitors, our client’s offerings were undifferentiated in delivery, marketing, or sales approach. Customers were purchasing the service offering in a bundle with additional services not core to our client. This limited ability to bundle reduced the number of sales channels into the target market and reduced our client’s pricing power.
Given data-driven evidence of the service market’s growth rates, the strategic commitment of our client to target this service market, the financial strength of our client’s competitors, and rate at which they were adding capabilities in this area, our recommendation to the EVP was that he explore acquisition options to best leverage valuable existing capabilities, increase ability to bundle, and, therefore, improve pricing power and the ability to address a key client need with a more tailored and targeted value proposition.