Gazelles

©2015 Voyager Strategies Slide 1

So, we want more regional gazelles?

Because they’re a brilliant source of high value jobs


Gazelles are nimble beasts

Grow at ≥ 20% pa Invest 10% of Sales pa

in development Invest 10% Sales pa in

sales & marketing Innovative, outward

looking management Readily use external

help and investment


Just staying in place

Most companies suffer a fall-off in their sales of Existing Products to Existing Customers (EPEC)

Methoni is a $2m pa SME with an annual EPEC retention rate of 90%

Methoni’s EPEC sales will erode by 10% or $200k in next year

Therefore Methoni needs $200k in new non EPEC sales just to stay in place


To grow at 20% pa, Methoni’s next year’s sales have to be $2.4m – an increase of $400k in non-EPEC sales

Overall, then, Methoni has to generate an extra $600k in non-EPEC sales

What does Methoni have to do?

Now, moving ahead


NPECAlternate next step based on customer loyalty and

good informationCustomers may saturate

NPNCHighest risk

Likely higher costs, longer payback time

Questions of competenceCan be huge success

EPECSales tend to declineMargins tend declineMain source of cash

Preserve

EPNCUsually next step to get

best value out of existing development investment

But product will tire, competition increase

New (N)

Existing(E)

Existing New

Pro

du

cts

(P)

Customers (C)

The Growth Options Map


Methoni aims for a pre-tax profit (EBITDA) of 15%

Assumes investment in Y1 will lead to 3 years’ sales of $600k pa = $1.8m, or total new EBITDA of $270k (at 15% pa)

To generate a positive return, development spend has to be less than total EBITDA

Therefore company can’t invest more than $270k in that new sales stream – and the less the better to get the result

Investment considerations


So, where is Methoni going to put its money on the Product Customer matrix?

EPNC?

NPEC? NPNC?

Lift EPEC Retention?


Not so easy. The company is likely to need help with …

Lifting general management capability to successfully handling higher levels of activity

Sales & marketing reviews to maximise EPEC retention rates and look for customer referrals and new product opportunities

Business case analysis to choose best EPNC, NPEC, and NPNC options


Two questions for regional development strategists

Do we know who our Region’s Methonis are?

Is there the right assistance in place to help them?

Gazelles

Leadership & Management

Transcript of Gazelles