The document provides an overview of Teleflex Canada and its strategic challenge to maintain 25% average growth over the next 5 years through innovation in hydraulic and thermal technologies. Key points include:
Teleflex Canada was founded in 1974 and produces marine steering and auxiliary power products. The company is currently owned by private equity firm HIG. Teleflex aims to capitalize on its culture of innovation to drive growth through new value chain relationships and increased R&D.
The proposed "winning move" strategy is to focus relentlessly on competitive advantages by targeting market development internationally. This will increase Teleflex's global presence, utilize existing production capacity, and boost its brand. Performance will be monitored through a balanced scorecard measuring financial, process
2. 2
Introduction
• Who are we?
o Company Overview
o Highlights and Features
o Key Operations/Products/Services
o Executive Leadership Team
• Why are we here today?
o Current Strategic Challenge
3. 3
Company Overview - Teleflex Canada
Teleflex Canada Inc.
o founded in 1974
o based in Richmond, Canada.
o Its plants and facilities in Limerick,
Pennsylvania, Litchfield, Illinois and
Vancouver, Canada
o overseas operations in Australia, Singapore
and New Zealand
Sold
• Teleflex Incorporated purchased the marine
hydraulic steering line of business from Capilano
Engineering Ltd. in Vancouver to create Teleflex
(Canada) Ltd.
• TFX Inc. sold the business to HIG partners,
private equity firm.
4. 4
Company Overview - Teleflex, Inc.
History
• Began in 1943 and based in Limerick, PA
• a multi-strand helical cable and a gear that
could convert push-pull motions into rotary
motions
First use
o Spitfire planes in World War II
o flexible cable to adjust the pilot's radio
o behind the cockpit and out of the pilot's
reach.
Company Name
• The flexible cable was used telescopically to
adjust the radio.
5. 5
Company Overview
Teleflex Incorporated designs,
manufactures, and distributes
specialty-engineered products.
HIB Private Capital
• 50 companies
• Miami, Atlanta, Boston,
New York, San Francisco,
London, Hamburg and
Paris
TeleFlex(TFX)
Inc.
TFX Commercial
TFX Heavy Lift
TFX Marine
(TFX Canada)
TFX Medical TFX Aerospace
6. 6
Key Operations, Products and Features
Marine and Auxiliary Power Products
• mechanical and hydraulic steering systems
• throttle controls and engine and drive assemblies
• generators
• diesel powered coolant heaters
o preheat engine blocks
• modern burner units
o heating and cooking applications
OEM and Aftermarkets
• Leisure Boating
• Commercial Transportation
• Military
7. 7
What We Believe
At Teleflex, we practice a clear set of company values:
• Act with integrity in all our business dealings.
• Create a common sense of purpose.
• Treat employees with respect
• Provide superior customer service.
• Cultivate an entrepreneurial spirit of creativity and
innovation.
• Commit to create long-term value for our shareholders
8. 8
Executive Leadership Team
Benson F. Smith
President
RichardA. Meier
EVP and Chief
FinancialOfficer
Laurence G. Miller
EVP,General Counsel
and Secretary
Vince Northfield
EVP for Global
Operations, Medical
John B. Siddhartha
President,Aerospace
& Commercial
9. 9
Why meet Today?
Key Strategic Challenge
From a strategic perspective,
how willTeleflex Canada
capitalize on its culture of
innovation to maintain its
average growth rate of 25%
and improve its hydraulic and
thermal technologies over the
next 5 years.
10. Agenda
• Where Do We Want To Go?
o Vision Statement
o Strategic Intent
o What Is the Current Situation?
• What Will Be the “Winning
Move?”
• How Will We Monitor the
“Winning Move?”
• What Will Be the Results?
• QUESTIONS and COMMENTS
• Request Approval of the
“Winning Move”
10
11. 11
Mission Statement
Teleflex Mission
Enhance patient outcomes by providing products that help
clinicians protect against infection and improve patient and
provider safety.
HIG Private Equity
Helping our companies build market leading positions
12. 12
Vision Statement
Teleflex Vision
Create a world leader in disposable medical products for critical
care and surgical applications.
HIG Vision
We specialize in providing capital to small and medium-sized
companies where we can play a significant role in helping to
unlock the value potential therein
13. 13
Strategic Challenges
How to grow market share and stay competitive
How to decrease costs
How better utilize capacity to increase profit
15. 15
External Assessment
General Environment
External Force Decision Rationale
International
Forces
Threat China and India are leveraging internal manpower
and manufacturers to create competitive products
Global Forces Threat Its cheaper to make those products in BRIC than
in Canada and America
Social
Responsibility
Opportunity Teleflex enjoys an excellent reputation regarding
public safety and social responsibility
Environmental
Responsibility
Opportunity Teleflex produces several product that are
designed for decreasing the environmental
footprint in the transportation and military
16. 16
External Assessment
General Environment PESTAnalysis
External Force Decision Rationale
Political/Legal Forces Opportunity Teleflex enjoys several partnerships within its
home countries that awards it for maintaining in
country workforces
Economic Forces Opportunity The economies of emerging countries offers
increased market share
Social-Cultural Forces Opportunity Brand awareness has been favorable. Products
are known for reliability. Firm view customers
as partners in product improvement.
Technological Forces Opportunity Teleflex has created more than 20 design
patents in the last 3 years and has improved
performance on current product lines. Currently
R&D is working on creating new products for
global market entry
18. 18
External Assessment - Primary Customer Profile
Pareto Principle -80/20
• Recreational Boating
• Commercial transportation
Manufacturers/
Distributors
• Need reliable parts for its meets its needs
• Parts that can be added to their supply
chains
• US Government partner
• Maintained partnerships with Cummins,
Clarke for distribution
Highlights
19. 19
External Assessment
Primary Competitor Profile
Products
Key Operations
Aftermarket
Ownership
• manufactures transport temperature control
and HVAC-Refrigeration systems for trailers,
truck bodies, buses, shipping containers, and
rail cars.
• Produced at about 10 plants in seven
countries, the lineup is marketed worldwide
through a global dealer network.
• In addition to its line of new systems, Thermo
King offers used and remanufactured
refrigeration units to customers.
•Frederick Jones and Joseph Numero started Thermo King
in 1938 to transport fresh chickens across long distances
without spoiling. The company is part of the Climate
Solutions (formerly Climate Control Technologies) division
of Ingersoll-Rand.
22. 22
Industry Environment
Porter - Competitive Rivalry
Industry Profit Potential = HIGH
TFX vs. Industry Leaders Column1 Column2 Column3 Column4
Statistic Industry Leader Leader TFX TFX Rank
Market Capitalization Alcon Inc N/A 2.51B 28 / 178
P/E Ratio (ttm) CONSORT MEDICAL 1,644.12 10.43 48 / 178
PEG Ratio (ttm, 5 yr expected) China Medical Technologies 33.7 1.32 38 / 178
Revenue Growth (QtrlyYoY) NANOSONICS FPO 142.20% 5.80% 62 / 178
EPS Growth (QtrlyYoY) NuVasive 2427.60% 104.30% 9 / 178
Long-Term Growth Rate (5 yr) Heartware International 69.50% 10.50% 47 / 178
Return on Equity(ttm) Conceptus 77.19% 6.32% 51 / 178
Long-Term Debt/Equity(mrq) 46.252 N/A
Dividend Yield (annual) Daxor Corp 25.10% 2.20% 4 / 178
Acquire
• Companies (15 in 5 yrs)
• Resources
Innovate
• R&D Investments
• Patented Designs
Serve
• Customer Relations
• Distributors
23. 23
Industry Environment
Porter - Threat of New Entrants
New Entrant Competitor
• Daxor Corp
Stealth Competitor
• China Medical Technologies
Industry Profile = HIGH
24. 24
Industry Environment
Porter - Threat of Substitutes
ThermoKing
• Established network with industrial vehicle
manufacturers (Schneider truck lines)
• Provides Refrigeration Technologies
RigMaster
• Attempts both innovation and low cost
leadership
Industry Profile = HIGH
25. 25
Industry Environment
Porter - Power of Buyers
Customer
Input on
Innovations
High
Customer
contact
Exceptional
product
quality
Industry
Profit
Potential =
HIGH
26. 26
Industry Environment
Porter - Power of Suppliers
Inputs on
sales
Drives
Innovation
Exceptional
product
quality
Industry
Profit
Potential =
HIGH
27. 27
Industry Environment
Porter – IndustryAttractiveness
Force Decision Rationale
Competitive Rivalry HIGH India and China have large systematic
infrastructures in place to compete in
market categories
New Entrants HIGH BRIC are creating components and may
decided to bring product creation in-
country
Threat of Substitutes LOW Must build a product to meet direct
need
Power of Buyers LOW
Power of Suppliers HIGH
Porter’s Five Forces
Overall Industry Profit Potential - HIGH
Industry = ATTRACTIVE
29. 29
InternalAudit
Porter – Value ChainAnalysis
Activity Decision Rationale
Inbound Logistics Significant Inbound includes value chain inputs and are well-
identified
Operations Significant Operations are located in key global locations
Outbound Logistics Significant Outbound includes outputs of value chain and are
well-identified
Marketing and Sales Significant Knows their customer/market segments and proof
is customer loyalty
Service Exceptional Intensive customer service and incorporates
customer recommendations into product
development pipelines
Primary Value Chain Activities
30. 30
Internal Audit
Porter – Value Chain Analysis
Activity Decision Rationale
Firm Infrastructure Significant Has unused capacity in place
HR Management Significant Jobs are in demand, expanding globally
Technology Significant Innovation a central focus
Procurement Significant Solid relationships and contracts are build
for long term partnerships
Support Value Chain Activities
31. 31
Direct Competitor Comparison
Reflects
Teleflex
competitors in
the Medical
environment.
Statistics not
available on
Teleflex
Canada due to
recent sale and
privatization.
32. 32
Internal Audit
Financial - Industry Comparison
Teleflex Industry
Total Operating
Revenue
1.82B 360B
Net Income 108.43M NA
ROA/ Productivity 6.6% NA
EPS 5.97 NA
33. 33
Internal Audit
Financial - Competitor Comparison
Teleflex Industry
Total Operating
Revenue
Net Income
ROA/ Productivity
Teleflex Merit Medical
Systems
Total Operating
Revenue
1.82B 315.95M
Net Income 108.43M 14.59M
ROA/ Productivity 6.6% 3.4%
EPS 5.97 .43
34. 34
Internal Audit
Financial - Performance Trends Comparison
Year
2009
2010
Total Operating
Revenue
1.76M
1.80M
Net Income
302,094
201,094
Stockholder’s
Equity
1.58M
1.78M
36. 36
Strategic Situation
Primary Implemented Strategy
To further
1. expand business and market presence
2. grow our business
3. build on our market leading positions
focus on product quality, and product innovation
37. 37
Strategic Situation
Top 2 Implemented Strategies
Intensive
International
2010
First mover
Profitable
International
2009
Partnerships
&
Restructuring
Profitable
42. 42
Strategic Selection
What do we want to accomplish?
Long Term Objective (LTO) Decision
Financial Increase Revenue
Customer Increase Market Share
Processes Efficiency and Innovation
Learning Increase Dealer and Mechanic Training
Primary LTO – Market Share Increase
Long-term Strategic Objectives
44. 44
Identify Key Strategic Opportunity
Target Develop new value chain relationships
Benefit – Diversify sourcing of goods and distribution channels
Strength – Increase International brand recognition
Opportunity – Many speed to market competitors
Annual Budget - $50M
45. 45
Strategy Selection
Key Strategic Option B
Identify Key Strategic Opportunity
Target – Increase Research and Development
Benefit – Increase products in pipeline
Strength – Improves product quality
Opportunity – Does not produce an immediate benefit
Annual Budget – $100M
46. 46
Strategy Selection
Key Strategic Option C - Hardball Killer
Focus relentlessly on competitive advantage
Target: Market Development
Benefit: Increase sales internationally
Strength: Utilize supply chain capacity
Opportunity: Infusion of fund needed
(obtained by being acquired)
Annual Budget – $250M
48. 48
Strategy Selection
The Winning Move - The Big "Aha"
Focus relentlessly on competitive advantage
Target: Market Development
Rationale:
1. Increase Global Presence
2. Utilize capacity with new sales contracts
3. Increase Brand recognition
51. 51
Strategy Selection
The Winning Move
Functional Implementation Support
YE
S
Manage
ment Produ
ction
&
Opera
tions
Human
Resou
rces
Marke
ting
Financ
e
R & D
Info
Syste
ms
62. 62
Strategy Outcomes
What will be the results?
Top 3 Strategy Outcomes
Most Optimistic
Improve Market share by 25%
Increase sales forces for leads
Most Likely
Increase International Sales by 10%
Operate at peak capacity
Most Intuitive
New customer loyalty – 20%
Integrate customer improvement ideas with R&D
63. 63
Lessons Learned
Top 5 Lessons Learned
1. When researching a
company for a case study
check the news first.
2. It is difficult to locate
information on private
companies.
3. You really need at least 3
weeks to pull information
from obscurity.
4. Profit margins depends as
much on its value chain as
its does on customers.
5. I really appreciate giving
my presentation on the
last day. (Thanks Don!)
66. 66
Thank You!
Thank You!
Teleflex Marine Onboard Rewards
http://www.youtube.com/watch?v=3AyJInL
KDcI
Celebrating over three decades of design and engineering
of hydraulic and auxiliary power technologies.