2

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

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!

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!

(edited)

2 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer

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 .

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

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.

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.

Related BootCamp article(s)

Growth Strategy

Growth questions are among the most common questions in consulting case interviews: gather the necessary Information about volume and price to find the best growth lever

CAGR - Compound Annual Growth Rate

Learn everything you need to know about CAGR (Compound Annual Growth Rate) for your case interview ✔ Definition ✔ Formula ✔ Examples ✔ Applications

Getting Up to Speed

In order to repeatedly demonstrate prerequisite skills under the pressure of a real case interview, you need to learn the basics and practice cases.

1 Q&A

Related case(s)

Well Being health care

Solved 30.1k times
Well Being health care Your client is Well Being (WB), a private healthcare company based in Germany.   Well Being operates 10 hospitals in Germany (in comparison to 1,000 public hospitals). These hospitals are normally half the size of the public ones and are not providing Accident and Emergency (ER). Revenue comes from patients claiming their own private insurance or paying by cash. In 2012 Well Being had revenues of €100 m (<1% share in the market) and an operating profit of €0.5 m. Their main competitor is the governmental national health care (NHC). NHC has asked to outsource some of their patients to WB and WB wants our advice on this offer.
4.3 5 1895
| Rating: (4.3 / 5.0) |

Your client is Well Being (WB), a private healthcare company based in Germany. Well Being operates 10 hospitals in Germany (in comparison to 1,000 public hospitals). These hospitals are normally half the size of the public ones and are not providing Accident and Emergency (ER). Revenue comes fro ... Open whole case

Ocean's Pearl

Solved 19.0k times
Ocean's Pearl Your client is the captain of the pirate ship Ocean’s Pearl. He currently discovered declining cash reserves. The recent operations of his ships are not meeting his requirements and he is looking for options to generate additional cash. He wants us to solve two problems: Assessing the reasons why the cash reserves are declining. Coming up with strategies to refill the cash reserves.  
4.4 5 387
| Rating: (4.4 / 5.0) |

Your client is the captain of the pirate ship Ocean’s Pearl. He currently discovered declining cash reserves. The recent operations of his ships are not meeting his requirements and he is looking for options to generate additional cash. He wants us to solve two problems: Assessing the reasons w ... Open whole case

OnlineGo

Solved 14.0k times
OnlineGo The client, OnlineGo, is a European Internet Service Provider (ISP) that is contemplating entering the North American market. Currently, they hold a dominant position in the European market with two streams of income; a subscription fee and taking a percentage of all e-commerce transactions done by subscribers. After studying the North American market, OnlineGo has concluded that the market is very divided and it is the perfect time to enter. You have been asked to calculate some figures to determine the potential profitability of entering the North American market.
4.4 5 457
| Rating: (4.4 / 5.0)

The client, OnlineGo, is a European Internet Service Provider (ISP) that is contemplating entering the North American market. Currently, they hold a dominant position in the European market with two streams of income; a subscription fee and taking a percentage of all e-commerce transactions done by ... Open whole case

Travel Destination

Solved 10.3k times
Travel Destination Your client is the government of a region in southern Spain. Situated in this region are the country’s main tourist locations, mostly beaches. The government is not satisfied with the revenues of the tourism sector. They have contacted our company to find a solution for this problem.
4.4 5 363
| Rating: (4.4 / 5.0) |

Your client is the government of a region in southern Spain. Situated in this region are the country’s main tourist locations, mostly beaches. The government is not satisfied with the revenues of the tourism sector. They have contacted our company to find a solution for this problem. Open whole case

Growth offensive at ChemCorp

Solved 6.1k times
Growth offensive at ChemCorp I am the business manager of the Performance Chemicals division ($500million) of a Speciality Chemicals Company ($14billion). Our CEO wants us to become the fastest growing  (moving from 4-5% growth to 10-15% growth) speciality chemicals company and has therefore asked all the divisions to present growth strategies to him. I would like you to advice us as we do not believe that there is significant untapped potential in the markets served by our division.
4.4 5 420
| Rating: (4.4 / 5.0)

I am the business manager of the Performance Chemicals division ($500million) of a Speciality Chemicals Company ($14billion). Our CEO wants us to become the fastest growing (moving from 4-5% growth to 10-15% growth) speciality chemicals company and has therefore asked all the divisions to present g ... Open whole case