gallup final

Presented by:TarinPunda Pantharee Panthira

Company Background

Situation Analysis

Issues and objectives

Recommendation

Financial Forecast

Key Success Factors

Conclusion

Today’s Agenda

Company Background

•Started off as a polling and market research company•Financially healthy

- 15% revenue growth per year- $200 million worldwide (2000)

•Revenue breakdown- 55% market research- 15% employee selection and development research- 22% management/leadership development- 7% consulting- 1% Gallup Poll

•Focus on serving large clients

•Core Competencies- research-based services- management program tailor down to individual level

Situation Analysis

•Recently entered two new markets- HR management consulting- training/development

•Competes in 4 markets

Market Research

Training/Development

Pure MGT Consulting

HR Consulting

Measuring all internal and external factors

Building engaging cultures

• Research-based Tailor to individualsTo find strengths

Trend: Replacement of Research with HR Consulting and Training

Growth: 107%

Growth: 5% Growth: 14%

Growth: 14%

Situation Analysis

Where We want to be

At Present

$200 million in revenues

Where We want to be

At Present

Achieve $1 Billion RevenuesWithin 5 years

Situation Analysis

Where We want to be

At Present

Situation Analysis

•Achieve 20% sales growth annually •Build a sustainable business around Gallup’s

core competencies

Where We want to be

At Present

Issues Identification

•Current core competencies fit with existing business model•Foundation supporting sustainable profitability•New Opportunities for revenue enhancement

Issues At Hand

Segment Analysis


HR Consulting

Researc

h

Customer Looking for one-stop serviceAnd value added service

HR Consulting& Training/Developmentgrew out of research modules

Leverage on existing product

Core Competency ‘fit’

Complementary Portfolio

A Closer Look at Each Segment

Segment Analysis


HR Consulting

Industry Growth

Firm Growth

MarketResearch

20.49% 10.21%

13.67% 5.19%107%

NA

A Closer Look at Each Segment

HR Consulting-High Industry Growth & moderate firm growthTraining/Development-High firm growth

Revenue GrowthS

eg

men

ts

Promising Segments

High Medium Low

Hig

hM

ed

ium

Lo

w


HRConsulting

Pure MgtConsultingC

om

peti

tive S

tren

gth

Market Attractiveness

Market Research

Mckinsey/GE Matrix

Strategic Unit Analysis

Strategy Overview

Intermediate-term

Short-term

II. Revenue Enhancement

I. Lean Organization

Strategy I: Lean Organization

Objective: Build strong foundation in order to achieve sustainable growth

•Identify best and worst performers(by net income % change)

•Liquidate worst performers and shift funding to best performers

America

Best PerformerLos AngelesWorst PerformersLincolnAssociate (Martin)





Latin AmericaBest PerformerVenezuellaBrazilWorst PerformersChilleArgentina





EuropeBest PerformerHungaryWorst PerformersLithuniaPolandCzech





AsiaBest PerformerJapanChinaSingaporeThailandWorst PerformersIndiaIsrael

ResultMore efficient allocation of fund and better focused on maximizing growth

Total8 best performers identified9 worst performers identified

Strategy II: Revenue Enhancement

Increase Customer Base

Increase Revenue

/customer

Objective: maximize revenue by taking advantage of the opportunities of internet and leveraging existing products

Capitalize Internet Growth: Training Segment

• High Growth Potential (50-100%)• Minimal Costs• Scaleable program larger customer base

RationaleMarketing

CommunicationTarget

Customers

Capitalize Internet Growth


• Product Specification: basic, initial development modules• Suitable for preliminary development or if classroom training not affordable Primary Target: Small-to-Medium Businesses

RationaleMarketing

CommunicationTarget

Customers



Increase Revenue

/customer

Capitalize Internet Growth


•Mass Marketing Strategies: - reach Small-to-Medium businesses• New Product Communications:

- Trade/Business Publications(along with existing marketing communication.)

RationaleMarketing

CommunicationTarget

Customers



Increase Revenue

/customer



Enter Market Consulting Segment

•Research done relates to understanding of customers •Ability to consult based on research findings •Leveraging existing product and core competency•“Consumer Insights consulting”


Increase Revenue

/customer

Time Line

2000 2001 2002 2003 2004 2005Activities

Marketing Communication

I. Short-TermLean Organization

II. Intermediate-TermA. Capitalize Internet Growth

B. Enter Market Consulting

Identify Target Group and Develop Marketing Strategies

A. Liquidate Worst Performers

B. Invest in BestPerformers

Recommendation1 Capital Expenditure in high potential area 15,000Lean StrategyRecommedation 2 Marketing Expense Revenue enhancement Trade Publication

(specific publishing for each industries) 7,500Business Magazines 7,500Internet Advertising 5,000

Total 35,000

ESTIMATED COST

Financial Justification

Figures in 1000$

• Debt financing for CAPEX– in total amount of $15 million

• Finance marketing expenditure by internally generated funds

How to finance our expenditure?

Sales

0

100,000

200,000

300,000

400,000

500,000

1998 1999 2000F 2001F 2002F 2003F 2004F

Year

Sal

es (

$000

's)

Sales

Sales

Net Income

CAGR (Compounded Annual Growth Rate)19.79%

9%

Income

0

5,000

10,000

15,000

20,000

1998 1999 2000F 2001F 2002F 2003F 2004F

Year

Net

In

com

e ($

oo

o's

)

Income

Sales

0

100,000

200,000

300,000

400,000

500,000

1998 1999 2000F 2001F 2002F 2003F 2004F

Year

Sal

es (

$000

's)

Sales

Sales

Net Income

CAGR (Compounded Annual Growth Rate)19.79%

9%

Lean organization

Revenue Enhancement

Income

0

5,000

10,000

15,000

20,000

1998 1999 2000F 2001F 2002F 2003F 2004F

Year

Net

In

com

e ($

oo

o's

)

Income

Marketing SpendingRevenue Enhancement

Lean organization

NPV = $156,212,000

Key Success Factors

Core Competency

Fit

OperationalEfficiency

CapitalizeOpportunities

SustainableBusiness

Issues Are SolvedIssues At Hand

•Core competencies fit with business model

•Foundation supporting sustainable profitability

•New Opportunities forrevenue enhancement

Proposed Strategies

Strategic Direction-HR Consulting, Training/Development,Market Research

Lean Organization-Liquidate worst performers & invest in best performers

A. Capitalize Internet Growth-Increase customer base

B. Enter Market Consulting-Increase sales per customer-completes Gallup path

Objective• Achieve 20% sales growth annually •Build a sustainable business around Gallup’s core competencies

Preliminary Analysis

Q & A Session

Back-up

SWOT AnalysisStrengths:•Research-based•Integrated Services•Services Tailor to individual•Gallup Poll brand reputationWeaknesses:Limited Area of ExpertiseThreats:Competition from pure management ConsultingOpportunities:•Internet Growth•Enter New Markets•Small Client

Internal to OrganizationCurrent Services

- Research Modules- Consulting & Training

Market RelatedCurrent Service

- Research

Market Consulting Will “Completes the Gallup Path”

Why Enter Market Consulting?

Results: Increase Revenue Per Customer Become more competitive on overall strategy consulting

Segment Analysis

Segment Differentiation Point

Competitors Disadvantages

Market Research Measuring and making sense of both internal and external market variables

•One measure at a time•Less integrated

None

Pure MGT Consulting

Research-based approach

Rely on secondary, theory, conventional thinking, and anecdotal evidence

• No Operations consulting• Narrow Strategy (people & market based)

HR Consulting • Financial Incentives not long-term drivers• Focus on creating engaging cultures

Mostly focused on pay and benefits consulting

None

Training Focus on individual Strengths development

Training can provide any reasonably talented person to become productive

Limited to framework of finding strengths

Region Analysis

Region E1998 E1999 % change Worst performer E1998 E1999 % Change Highest performer E1998 E1999 % ChangeUSA 13577 16933 24.72% Lincoln 2209 812 -63.24% Los Angeles 549 2790 408.20%

Associate (Martin) 3913 70 -98.21% Citibank (Emond) 570 1308 129.47%Education 345 978 183.48%

Latin America -161 147 191.30% Argentina -10 -30 -200.00% Venezuela -339 4 101.18%Chile -156 -290 -85.90% Brazil -149 58 138.93%

Europe -2491 -1975 20.71% Lithunia 8 -10 -225.00% Hungary -163 260 259.51%Poland -2 -45 -2150.00%Czech -2 -25 -1150.00%

Asia 12 727 5958.33% India -7 -19 -171.43% Japan 181 347 91.71%Israel 0 -327 #DIV/0! China 66 123 86.36%

Singapore 71 284 300.00%Thailand -186 -101 45.70%

Lean Organization: Regional Analysis

Cost of Capital

Cost of debt (average) 7.98%Cost of Equity 15.00%Debt ratio 0.6824Tax 35.99%WACC 8.25%

Cost of Capital

Revenue Proportion

2000 2004FTraining 22% 64.95%Mgt consulting 22% 14.03%Marketing research 55% 20.51%Gallup Poll 1% 0.51%

Industry Growth Assumption

Industry Competitors 1-Yr. Sales Growth Sales weighedMarket Research Taylor Nelson 8.50% 615.7 1.06%total sales AC Nielsen 7.00% 1525.4 2.15%

4957.5 Market Facts 36.40% 136.5 1.00%10.21% Maritz 1.40% 2200 0.62%

JD Power 2.40% 175 0.08%NPD 127.30% 135 3.47%Opinion Research Corporation 43.10% 118.6 1.03%Harris 76.90% 51.3 0.80%

HRM Consulting Towers Perrin n/a 1125 n/a1699.6 Hewitt 25.30% 1075 16.00%

20.49% Watson-Wyatt 12.20% 624.6 4.48%

Pure Management Consulting McKinsey 13.60% 2500 0.46%73589.3 Booz Allen Hamilton 14.30% 1600 0.31%12.73% Ranaissance -4.30% 742.6 -0.04%

Boston Consulting Group 11.50% 730 0.11%Arthur D. Little 3.20% 608 0.03%Bain 3.90% 498.7 0.03%Anderson Consulting 17.30% 16300 3.83%Price Waterhouse Coopers 2.00% 15300 0.42%KPMG 15.10% 12200 2.50%Ernst & Young 14.80% 12510 2.52%Deloitte Touche Tohmatsu 17.80% 10600 2.56%

Training and Development n/a n/a

Result of debt financing

Debt Ratio Before 68.14%After 83.19%

gallup final

Documents