Build an operating model: They
develop a deep bench of internal
talent, external partners and technical
advisors whom they can draw upon to
source information, advise on trends,
and work with ‘target’ companies.
They also proactively address issues
that are likely to arise between sector
teams and clarifying procedures for
sharing resources.
Conversion into Investment
Themes
Expertise in a sector is a necessary
but not sufficient precondition for
identifying high value targets, a
crucial element in sector-strategy
success and a thorny implementation
challenge.
To get ahead of the curve, smart
sector teams take a fresh-eyed look
at their areas of interest. They gather
unbiased information from the field
by interviewing customers, suppliers,
competitors and creditors to build
a deep enough understanding of
a sector that can point them to
concrete, counterintuitive themes and
different types of added value.
Recognizing that it can be risky
venturing too far ahead of the
competitive curve, they test their
themes by looking for successful
‘‘Many professional
firms shy away from
certain types of
work, such as ones in
businesses with fastchanging technology
or high cyclicality.’’
was ready to pounce. Beating stiff
competition from strategic and
financial buyers, it landed the deal in
mid-2012 and helped merge it with a
major existing client.
The firm had no trouble convincing
management of both companies of
the merits of the merger, thanks to
its deep knowledge of the sector and
well thought-out model(s).
precedents in similar sectors before
committing to a novel idea. They
continually gather new evidence to
challenge and fine-tune their themes.
For example, a leading European
professional firm converted insights
in the specialty chemicals industry
into a profitable thesis that caught
the sector’s consolidation and
globalization wave.
Through research and direct contacts
with industry executives in early
2012, the firm liked what it found: a
stable market, strong cash flows, high
profit margins and relative resistance
to business cycle gyrations.
When a major conglomerate
announced in late 2011 that it
would sell off its specialty chemicals
division, the professional firm
Arming your brand with the
Concepts and tools that connect
to the East African Market
Continuing to mine the
consolidation theme, the firm
engineered further selective
acquisitions and used its scale to
achieve top-supplier status with more
key clients.
Professional firms that successfully
retool themselves around industry
sectors will be well positioned when
the credit clouds lift and the market
truly rebounds. Tomorrow’s winners
will be those that are ready to execute
best.
Dr Clifford J Ferguson is the Managing
Partner of Rainmakers, and chairman
of Glad’s House. He can be reached via
mail on: Cliff.Ferguson@rainmakers.
uk.com, or website; www.rainmakers.
uk.com.
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