Over recent years the telcoms industry has experienced huge swings in its fortune. From a stock market darling, linked with the dotcom boom, it fell from grace with many very high profile corporate collapses. The market was oversupplied, revenue was difficult to maintain and margin has fallen rapidly, with most companies very highly geared, refinancing was the order of the day.
A division of a major UK telecoms company, building and operating complex bespoke corporate communications networks for large corporate and public sector clients, this business had grown rapidly during the late 90’s attaining revenue in excess of £150m but since 2000 had been in decline. It had become loss making, revenue had fallen to c£100m, and margin was continuing to deteriorate. A number of cost-based turnarounds had been attempted, however without resolve the underlying strategic issues these had been of very limited benefit. Its future looked bleak.
Focusing on analysis in the first instance Ignetica personnel, sought to understand the detailed causes of this businesses decline, how it worked, what it provided to the market and in particular to get a very detailed understanding of the market. Through detailed market segmentation, ignetica personnel identified an under-served market opportunity arising through the structural changes in the market, and the ongoing ICT budget reduction within large clients. Identifying the operational capability, we were able to demonstrate an ability to satisfy this demand through an enhanced market proposition, re-focused market engagement and business operations model. Developing each of these aspects into comprehensive business, operations and change plans, ignetica personnel were able to build a compelling strategic turnaround plan.
The plan enabled the business to leverage its core skills & capabilities much more effectively, generating far greater return on the people employed. Through refinement of its market focus, operations and proposition, it was able to capitalise on an under-served market opportunity gaining significant first mover advantage, and building sustainable competitive advantage.
Development of a radically new business operations model enabled the business to reduce its operating costs by 30%, and capitalise on the changing market around it. With our approach this business was able to ride the wave of change turning it to its advantage rather than being squashed by it.
Having built the detailed business, operations and change plans, Ignetica personnel were also able to build an attractive investment plan to refinance the business. Based on this our personnel were able to secure Venture Capital funding for an MBO/MBI of this business, realising over £60m shareholder value over three years.