Financial Modeling: Market Entry Strategy

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Financial Modeling: Market Entry Strategy

  1. 1. Market Entry Strategy and Financial  Modeling Learnings From the Consulting World ‐By Tarun Mehra © EduPristine – www.edupristine.com
  2. 2. Problem Statement “Identify growth opportunities for a European medical devices company in Latin  America” © EduPristine | (Confidential) 2
  3. 3. Types of ‘Problems’ Wicked  Problems Complex  Problems Clarity on  Potential  Answers Tame  Problems - Well defined problem - Clear solution reachable in a linear fashion using straightforward, reductionist, repeatable, sequential techniques - E.g. – CAGR calculation, binomial equation, dy/dx, etc. ‐ Non‐linear, difficult to understand  ‐ Solutions can lead to other  problems and unintended  consequences ‐ E.g. ‐ fluid dynamics, travelling  salesmen scheduling, polynomial  differential equations, etc. Clarity on Problem Definition © EduPristine | (Confidential) 3 ‐ Ambiguous or unknown goals ‐ Means‐ends relationships poorly  understood. Interconnected. ‐ ‘No stopping’ rule ‐ E.g. – Poverty, Crime, Education,  Water, Hunger, Social issues, etc.
  4. 4. What Are We Dealing With? “Some problems are so complex that  you have to be highly intelligent and  well informed just to be undecided about them.” ‐ Laurence J. Peter ““Successful problem solving requires  finding the right solution to the right  problem. We fail more often because we  solve the wrong problem than because  we get the wrong solution to the right  problem”  ‐ Russell Ackoff © EduPristine | (Confidential) 4
  5. 5. A Potential Analytical Approach International  Expansion?  Emerging Markets? Our Growth Vision?  Therefore Which Countries Are Most  Attractive? In What  ‘Segments’? Hypotheses? Validate Where Should We  ‘Play’? Therefore ‘Mode of Entry’?  Target Player? Go‐to‐ Market? ROI? Validate How Will We  Succeed? Therefore Org‐Structure?  Management  Plan? By Country? Validate What Capabilities  Will We Need? Strategic Choices © EduPristine | (Confidential) Tactical Choices 5
  6. 6. Where Should We Play? 20+ Countries in Latin  America Detailed Analysis Of … Macroeconomic  Attractiveness  Analysis 20+  Countries Industry  Attractiveness  Analysis 8‐10  Countries Deep‐Dive on  Attractive Markets 3‐4  Countries Specific ‘Growth  Alternatives’ for  Selected Countries • Macro parameters  • GDP/ Growth, Business Confidence Index, PEST • Others • Market Size/ Growth • Regulatory Landscape;  • Customer Overview (B2B, B2C, Third‐Party,  Insurance, etc.) • Competitive Landscape (Fragmented/ Consolidated?  Presence of Global Players?) • Value Chain Analysis (Distribution Models?) • Market Trends; Recent Deals/ Trends Country #1  Potential Acquisition C – Company Details, Management Team? Potential Business/ Market/  Financial Synergies with Potential Targets? Review of Financials and Deal‐ Multiples? Potential Deal‐Size? At Premium/ Discount? Hypothetical  Country #2  Organic Growth + Distributor Partnership Detailed Analysis of  Selected ‘Growth  Alternatives’ © EduPristine | (Confidential) Where Should We  ‘Play’? 6
  7. 7. Analysis of ‘Growth Alternatives’? Brazil Growth  Alternative Financial  Analysis Mexico • Inorganic Growth • Acquire Company X • Define Terms/ Boundaries • Organic Growth • Partner with Distributor Y • Define Terms/ Boundaries • ‘Incremental’ Cost‐ benefit? • Initial Investment? Deal‐ size? Multiples?  • Ongoing Investment? • New Immediate Sales?  Sales Growth? • ROI? Payback‐Period? • Cash‐flow? Sequencing of  Investment? • Scenarios? Robustness? • ‘Incremental’ Cost‐ benefit? • Investment? Product‐ Licensing Fees/ Timeline? • New Team Size/  Structure? Hiring? Sales  Targets? • Sales Forecast? Sales  Growth? • ROI? Payback‐Period? • Cash‐flow? Sequencing of  Investment? • Scenarios? Robustness? Evaluate Against Investment Appetite © EduPristine | (Confidential) 7 How Will We  Succeed?
  8. 8. Next Steps …  Share Following with the Board –  Strategic Choices   Selected Growth Alternatives  Financial Analysis, Cost‐Benefit Plan and Recommendations   Facilitate Decision‐Making Initiated Discussions with External Stakeholders, e.g. –  Potential Target’s Management Team in Brazil  Selected Distributor in Mexico     Finalize deals Revisit Earlier Financial Plan, Compare with ‘Actuals’, Adjust and Keep Track Take Action on Tactical Choices Made Earlier Track Progress  © EduPristine | (Confidential) 8
  9. 9. Why Financial Modeling? Financial Modeling is an expertise that helps   you to: •Design & Structure Financial Problems &  translate them in Excel •Gain the ability to produce models quickly •Implement Sensitivity Analysis •Learn Charting Techniques & Create  Dashboards •Quickly audit robust Financial Models © EduPristine | (Confidential) What EduPristine has to Offer you in Financial  Modeling Program: •Extensive Classroom Training by Industry Experts •20+ Hrs Exclusive Online Training •Earn CFA Credits :CFA Institute has approved this  program, offered by EduPristine, for 20 CE credit  hours. •Earn GARP Credits: EduPristine's program on  "Financial Modeling" qualifies for 10 GARP CPE  credit hours. •Personal Doubt Clearance: Every Participant can  avail 30 mins of one‐on‐one doubt clearing  session. •24X7 Access to Discussion Forums 9
  10. 10. Thank You ! Visit Us On: http://www.edupristine.com/ca Contacts Us: help@edupristine.com support@edupristine.com Follow Us On: http://www.facebook.com/edupristine Subscribe To: http://www.youtube.com/user/edupristine © EduPristine – www.edupristine.com

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