success formulas for the next decade final...

Success Formulas for theNext Decade

5 July 2011

Dr. Andrej VizjakPartner – PwC RomaniaConsulting Leader – PwC SEE

Vasile IugaCountry Managing Partner – PwC RomaniaManaging Partner – PwC SEE

www.pwc.com/ro

PwC RomaniaJuly 2011Success Formulas for the Next Decade

Slide 2

PwC Romania

The first strategy book on Romanian companies

Slide 3July 2011Success Formulas for the Next Decade

• The first book that includes a detailed analysis of thesuccessful strategies of international and Romaniancompanies that emerge as winners of the crisis, fromdifferent industries

• Released with the support of Publica Publishing House

• Analyzes concentration tendencies of companies in variouseconomic areas, both globally and nationally

• Identifies a series of strategies through which companies cangrow in times of fierce competition and in a difficulteconomic context

• Comprises a balanced mix of theory and specific case studies(success stories of selected companies)

PwC Romania

Each industry concentration process takes 25years on average to be completed


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

45%

-10 -5 0 5 10 15 20 25

CR3

Years

Paper

Drugs

Natural gas liquids

Semiconductors

Telecom

BrewersRailways

Insurance

Divers. ChemicalsUtilities

Automotive SupplierRestaurants & Fast Food

Steel Producer integratedAutomotive Mfrs.

Confectionary

Truck & Trailer Mfrs.

Shipbuilding

Distillers

Cigarette

Defence Electr.

Soft drinks

Aluminium Producers

Food Retail

Airlines

Integrated oil & gas

Ore Mining

Banks

Consumer Electronics

Divers. FoodRubber & Tire Mfrs.

30

Thetotal

marketshare of

threelargestcompa-nies on

theglobalmarket

Opening Scale Focus Balance

PwC Romania

The book identifies four winner types of the pastdecade and defines their strategies as successformulas for the next decade


ProductDiversification

Internationalisation

RegionalHero

IndustryShark

LocalSpecialist

InternationalChampion

PwC Romania

These four winner types are growing andacquiring companies even during the currentglobal economic crisisAnnual transaction value of all M&As worldwide according tothe four winner profiles (in bn. US $)


1867

836

392 264607

809

14241767

913 798 776

412

288

214167

244

332

388

558

457

195 286

408

284

236287

360

436

600

814

519

289456

289

176

153159

208

242

260

292

197

120

186

0

500

1000

1500

2000

2500

3000

3500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Local Specialist

Regional Hero


Industry Shark

Data source: Dealogic (Jan 2011)

2976

1584

995 877

1419

1819

2672

3431

2086

1402

1704

PwC Romania

Organic growth is no longer enough to guaranteethe long-term successTotal transaction value of all M&As worldwide (2000-2010)by the winner profiles


Data source: Dealogic (Jan 2011)

Industry Shark50%


17%

Regional Hero22%

Local Specialist11%

100% = 20,965 bn. US$

PwC Romania

All four winner types survive the industryconcentration, however the InternationalChampions are the most frequent winners in thefinal “Balance” phaseDistribution of winner types by phases of industry concentration


6 814

20

49

61

71

17

20

15

7

63

2516

7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Opening Scale Focus Balance

Local Specialist

Regional Hero


Industry Shark

Source: sample of 600 winners of the crisis

113 (100%) 302 (100%) 148 (100%) 37 (100%)

PwC Romania

Success factors in concentrating industries


Determinescale profile

Examinegrowth

direction

Developuniquegrowth

capabilities

Use rightgrowth paths

Adjustorganization

Benchmarkgrowth profile

PwC Romania Slide 10

We differentiate on each of the 6 dimensions 4strategic options, resulting in 4,096 potentialgrowth cube combinations

July 2011Success Formulas for the Next Decade

SmallerIndustryLeaders

SalesGrowers

Determinescale profile

Benchmarkgrowth profile

Examine growthdirection

Adjustorganization

LargeIndustryLeaders

SmallerIndustry

Followers

LargeIndustry

Followers

TopPerformers

Under-performers

ProfitGrowers

RegionalMulti-

BusinessNiches

Total GlobalMarket

RegionalProductNiches

InternationalProductNiches

DecentralizedProduct

Units

DecentralizedProduct and

RegionalUnits

CentralizedFunctional

Units

DecentralizedRegional

Units

Develop uniquegrowth capabilities

Market -Related

Capabilities

Scale-Related

Capabilities

Productand/or

RegionalFocus

Product-Related

Capabilities

Use right growthpaths

Acquisitions MegaMergers

OrganicGrowth

Cooperations

PwC Romania

The book specifies the success formulas (growthcube combinations) of the four winner types

1. PositionYour ScaleProfile

2. Bench-mark YourGrowthProfile

3. ReviewYour GrowthDirection

4. LeverageUniqueGrowthCapabili-ties

5. Applythe RightGrowthPaths

6. AdaptYourOrganiza-tion

1. Positionyour scale

profile

2. Bench-mark your

growthprofile

3. Reviewyour

growthdirection

4. Leverageuniquegrowth

capabilities

5. Applythe rightgrowthpaths

6. Adaptyour

organization

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

45%

-10 -5 0 5 10 15 20 25Years

Paper

Drugs

Natural gas liquids

Semiconductors

Telecom

BrewersRailways

Insurance

Divers. Chemicals

Utilities

Automotive Supplier

Restaurants & Fast Food

Steel Producer integratedAutomotive Mfrs.

Confectionary

Truck & Trailer Mfrs.

Shipbuilding

Distillers

Cigarette

Defence Electr.

Soft drinks

Aluminium Producers

Food Retail

Airlines

Integrated oil & gas

Ore Mining

Banks

Consumer Electronics

Divers. FoodRubber & Tire Mfrs.

30

Smaller and LargeIndustry Followers


Industry Leaders andLarge

Industry Followers

Smaller IndustryFollowers

Top Performerswith priority on

profit growth


profit growth


sales growth


sales growth

RegionalProduct Niches

Regional Multi-Business Niches

InternationalProduct Niches

TotalGlobal Market

Product and/orRegional Focus

Market-RelatedCapabilities

Product-RelatedCapabilities

Scale-RelatedCapabilities

OrganicGrowth

Acquisitions andCooperations

Acquisitions andCooperations

MegaMergers

CentralizedFunctional Units

DecentralizedProduct Units and

Centralized MarketingFunction

DecentralizedRegional Units andCentralized Product

Functions

DecentralizedProduct and

Regional Units

Industry SharkLocal Specialist Regional Hero International Champion

Slide 11


Slide 12

Local Specialist

PwC Romania

Local Specialist – the success formula

Slide 13July 2011


profile

2. Bench-mark your

growthprofile

3. Reviewyour

growthdirection


capabilities


6. Adaptyour

organization

Smaller Industry Followers

Top Performerswith priority on profit growth

Regional Product Niches

Product and/or Regional Focus

Organic Growth

Centralized Functional Units

LocalSpecialist

Success Formulas for the Next Decade


Slide 14

Regional Hero

PwC Romania

Regional Hero – the success formula

Slide 15July 2011


profile

2. Bench-mark your

growthprofile

3. Reviewyour

growthdirection


capabilities


6. Adaptyour

organization

RegionalHero


Top Performerswith priority on profit growth

Regional Multi-Business Niches

Market-Related Capabilities

Acquisitions and Cooperations

Decentralized Product Units andCentralized Marketing Function



Slide 16

International Champion

PwC Romania

International Champion – the success formula

Slide 17July 2011


profile

2. Bench-mark your

growthprofile

3. Reviewyour

growthdirection


capabilities


6. Adaptyour

organization



Top Performerswith priority on sales growth

International Product Niches

Product-Related Capabilities

Acquisitions and Cooperations

Decentralized Regional Unitsand

Centralized Product Functions



Slide 18

Industry Shark

PwC Romania

Industry Shark – the success formula

Slide 19July 2011


profile

2. Bench-mark your

growthprofile

3. Reviewyour

growthdirection


capabilities


6. Adaptyour

organization

IndustryShark

Industry Leaders and LargeIndustry Followers

Top Performerswith priority on sales growth

Total Global Market

Scale-Related Capabilities

Mega Mergers

DecentralizedProduct and Regional Units


PwC Romania

Top 500 Romanian companies by profileHigh potential for M&A in the next decade


9

23

18

8

18

42

55

27

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No. of companies Reveue in 2009

Local Specialist

Regional Hero


Industry Shark

100% 100%

Romanian economy – opening phase

PwC Romania

Top 500 Romanian companies by profile and sector


43

10

21

1

17

76

2

10

36

24

42

35

36

7

10

26

9

7

18

11

21

73

57

17

12

51

9

56

1

6

11

33

72

26

16

7

60

30

55

13

99

34

0% 20% 40% 60% 80% 100%

Automotive

Industrial and consumer products

Pharma

Oil & Gas

Banking

Telecom

Construction

Retail

Utilities

Insurance

Transport

Food

Industry Shark International Champion Regional Hero Local Specialist

PwC Romania

Selected winner companies in RomaniaCase studies of the book

Telecom

VodafoneRomtelecom

Utilities

GDF SuezCEZ


RegionalHero

IndustryShark

LocalSpecialist


Food

Caroli Foods

Pharma

Labormed

Online media

Internet Corp

Banking

BRD Societe Generale

Retail

Metro Group

Insurance

Omniasig Vienna Insurance Group

Automotive

Dacia Renault

Consumer Goods

Gorenje


Slide 23

Thank you!

This publication has been prepared for general guidance on matters of interest only, and doesnot constitute professional advice. You should not act upon the information contained in thispublication without obtaining specific professional advice. No representation or warranty(express or implied) is given as to the accuracy or completeness of the information containedin this publication, and, to the extent permitted by law, PricewaterhouseCoopers Audit SRL, itsmembers, employees and agents do not accept or assume any liability, responsibility or duty ofcare for any consequences of you or anyone else acting, or refraining to act, in reliance on theinformation contained in this publication or for any decision based on it.

© 2011 PricewaterhouseCoopers Audit SRL. All rights reserved. In this document, “PwC”refers to PricewaterhouseCoopers Audit SRL, which is a member firm ofPricewaterhouseCoopers International Limited, each member firm of which is a separate legalentity.

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