Growth Strategy for a Pipeline Engineering Firm specializing in inspection, repair and maintenance of non-standard pipelines

Anonymous A asked on May 26, 2018 - 2 answers

I am intrigued as to how you would structure this interview question. You are not expected to elicit questions to gather data, but rather to think / brainstorm on spot about the growth strategy. The only information that we know is that the firm is small (valuation ~$3M) and is currently operating globally (in both developed and developing countries).

Hint: think about productisation, geographic expansion and M&A.

Thank you guys and I really appreciate your input!


2 answers

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Anonymous B replied on May 26, 2018

I would structure this in the following way .

1. Current revenue stream :

a. Get longer term contracts from the current suppliers . ( build relationships with current customers )

b. Marketing about the service and quality in industrial journals / directly going to maufacturing comapnies and offering discounts on first service.

New Revenue Stream :

a. Explore New markets

b. Explore new suppliers in the same markets

c. Go into online video tutorial for self maintenance of pipelines ( users will have to subsribe for the videos )

d. ) Enter into manufacturing pipes as well ( with all the experience gained over the years of maintaining the pipes )

I would prioritize both a and b in current revenue streams and b and c in new revenue streams looking at the feasibility of these ideas .

And these are just organic ways . Adding to this would be the inorganic ways of partnering with or acquiring some other firms in the geographies that have the maximum businesses of servicing of pipelines . — Anonymous on May 26, 2018

An (Jack)
replied on Jun 02, 2018
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Hey there - adding another approach here for comparison

Going to assume growth strategy means growing topline revenue here, and not profitability (in which case cost cutting could also be a viable "growth" strategy).

The framework I would use is:

Growing revenue = Setting right goals + Executing appropriately

Goal 1: Sell more existing services

  • Selling more services to existing clients: e.g., capture more wallet share, through bundled services, upselling complementary services (inspection + repairs
  • Acquire more clients + position firm in high growth areas: find which areas of market is growing fastest, invest in marketing and sales to capture more clients. M&A could be an option here - find complementary companies with complementary clients
  • Lift prices to clients: understand what is the value you are providing to clients and try to capture more of the value

Goal 2: Develop new services (would deprioritize given how small the company is, should not spread itself too thin)

  • Develop complementary services: e.g., which other services are needed by existing clients, which we can develop? e.g, what about inspection, repair and maintenance of standard pipes? Again, M&A is an option here

Lastly, productisation is an interesting concept. In tech, usually it means packaging a product so it is much more scalable and requires less human input. This could be a viable strategy to increase self-service from clients, and decrease cost to sell, and increase velocity of selling. If there is a way to do this for the services above, then it is also viable.

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