Drivers of Growth and Opportunities for Expansion into New Markets

Report
ELEMENTS FOR DESIGN OF ADVANCED DEVELOPMENT PROGRAMMES
BEING
LARGE REGIONAL FIRMS IN THE CARIBBEAN:
Drivers of Growth and Opportunities for Expansion into
new markets
THINKING
EIL
KNOWING
:
LARGE REGIONAL FIRMS IN THE CARIBBEAN
DRIVERS OF GROWTH AND OPPORTUNITIES FOR EXPANSION INTO NEW
Prof. Miguel Carrillo, Ph D.
MARKETS
DOING
1
:
LARGE REGIONAL FIRMS IN THE CARIBBEAN
ELEMENTS
FOR of
DESIGN
ADVANCED
DEVELOPMENT
PROGRAMMES
Drivers
GrowthOF
and
Opportunities
for Expansion into
new markets
• Objective of the Study: Understand and
Document Growth BEING
Strategies, Trajectories and
Patterns in Large Regional Caribbean Firms.
• Large: Typically >> 500 employees
• Countries:
–
–
–
–
–
–
EIL
DR THINKING
Guyana
Jamaica
Suriname
Barbados
DOING
Trinidad and Tobago
KNOWING
2
:
LARGE REGIONAL FIRMS IN THE CARIBBEAN
ELEMENTS
FOR of
DESIGN
ADVANCED
DEVELOPMENT
PROGRAMMES
Drivers
GrowthOF
and
Opportunities
for Expansion into
new markets
• Project Funded by Compete Caribbean.
BEING
• Progress:
– 37 in depth interviews with CEOs, Chairman and
Top Executives of Largest Corporations in the
Caribbean
THINKING
KNOWING
– 6 Surveys of Base of the Pyramid Market Profile
– Identification of about 9 Growth Trajectories
– Mapping of LRF
– Cases and Mini Cases
DOING
EIL
3
Business Mapping of
Large Regional Firms in the
Caribbean
Content Analysis of Selected Variables for 2012
900
800
700
600
500
400
300
200
100
0
Goddard
Grace
Guardian
Ansa Mcal
Enterprises Kennedy
Holdings
New
Growth
Innovation
Short Term
Same
Local
Competition/Compete
Profitability
Profits
Control
Risk/Risks
Efficiency
Costs/Cost
36
5
0
10
13
9
5
6
9
31
100
0
116
45
58
6
6
9
8
6
7
14
26
326
5
119
19
14
1
11
1
7
0
1
1
7
26
2
62
26
36
1
35
13
7
2
3
16
33
218
2
150
Kersten
34
0
1
7
9
0
9
0
0
24
36
0
40
First
Republic
Caribbean
Bank
Bank
29
61
0
5
6
20
6
29
7
5
0
0
2
2
5
3
26
6
45
170
21
420
0
25
20
45
Sagicor
23
2
7
17
10
3
7
0
10
27
293
0
54
Massy
Holdings
Ltd
86
97
0
23
7
10
5
18
110
41
81
3
64
Content Analysis of Selected Variables 2012
300
250
200
150
100
50
0
Opport
Internat unities/
Compet Allianc Joint Collabo Insight/ Long Sustain
Global
Explore
Projects Start
ional Opport
itive
e
Venture ration Insights term ability
unity
Massy Holdings Ltd
34
1
0
5
34
1
1
12
0
12
4
17
4
Sagicor
46
56
7
0
5
5
0
1
34
1
7
2
2
First Caribbean Bank
30
80
5
0
9
46
0
1
47
5
4
1
1
Republic Bank
21
10
22
2
0
4
7
0
0
5
1
9
1
Kersten
34
1
18
3
0
4
0
5
5
1
3
1
25
Guardian Holdings
4
26
7
1
6
12
8
2
0
53
1
5
2
Ansa Mcal
1
0
1
0
0
1
5
0
0
2
0
3
1
Grace Kennedy
41
45
14
0
5
1
6
0
0
16
3
1
5
Goddard Enterprises
2
23
5
0
3
0
5
2
1
17
0
2
1
Top large Non Financial Firms Employment
Size
Company
Head quarters
Neal and Massey
Trinidad and Tobago
Ansa McAl
Trinidad and Tobago
Digicel
Jamaica
Goddard Limited
Barbados
Grace Kennedy
Jamaica
Cerveceria Nacional Dominicana, S.A
Dominican Republic
Jamaica Producers
Jamaica
Agostini
Trinidad and Tobago
TCL Group of Companies
Trinidad and Tobago
Kersten
Suriname
The Generating Company Haina
Dominican Republic
Bank Holdings (Beverages company) Ltd Barbados
Light and power holdings
Barbados
Jamaica Broilers Group
Jamaica
Angostura Holdings Limited
Trinidad and Tobago
Employment
Size
Year 2013
8988
6000
5500
5023
2633
2500
1534
1025
1000
999
600
589
451
273
250
Top large Financial Firms
Employment Size
Company
Head quarters
Employment
Size
Year 2013
Grupo Popular
Dominican Republic
6500
CIBC First Caribbean International Bank
Barbados
3424
Republic Bank
Trinidad and Tobago
4091
Memoria Banco BHD
Dominican Republic
4000
Guardian Holdings Ltd
Trinidad and Tobago
2529
Sagicor
Trinidad and Tobago
1500
First Citizen Bank
Trinidad and Tobago
900
Revenue Positioning of
Top Non Financial and
Financial Firms
Revenue Positioning of Top Non-Financial
Firms in the Caribbean 2010 to 2013
Revenue Positioning of Top Financial
Firms in the Caribbean 2010 to 2013
Assets Positioning of
Top Non Financial and
Financial Firms
Assets Positioning of Top Non Financial
Firms in the Caribbean 2010 to 2013
Assets Positioning of Top Financial Firms
in the Caribbean 2010 to 2013
Goddard
Ansa Mcal
Neal &
Massy
Grace
Kenedy
Market Valuation
185 Million
1.829 Billion
1.02 Billion
182 Million
P/E
17.5
13.9
10.9
5.7
# Companies
53
39
73
36
Sales USD
487 Million
1.6 Billion
1.466 Billion
850 Million
Territories
22
8
11
12
Employees
5,023
6,000
10,000
1,800
Net Profits USD
21 Million
174 Million
131 Million
20 Million
Asset BasenUSD
335 Million
2 Billion
1.4 Billion
350 Million
Share Price
3.08
11.75
10.8
0.50
Basic Benchmarking some LRF
:
LARGE REGIONAL FIRMS IN THE CARIBBEAN
ELEMENTS
FOR of
DESIGN
ADVANCED
DEVELOPMENT
PROGRAMMES
Drivers
GrowthOF
and
Opportunities
for Expansion into
new markets
• Geographic Growth Trajectories:
BEING
– Trajectory 1: Country
Centric
– Trajectory 2: Caribbean Centric
– Trajectory 3: Caribbean as platform for Global
THINKING
KNOWING
Growth
EIL
DOING
16
:
LARGE
REGIONAL
FIRMS
IN THE CARIBBEAN
ELEMENTS FOR
DESIGN
OF ADVANCED
DEVELOPMENT
PROGRAMMES
Drivers of Growth and Opportunities for Expansion into new markets
Location of HQ.
BEING
• Caribbean HQ serving the Caribbean Region: Ansa Mcal
Sagicor, Guardian
EILthe Caribbean Region: PALIG,
• Non Caribbean HQ serving
THINKING
KNOWING
UNICOMER, Goddard Catering Group
• Caribben HQ serving non-Caribbean Regions: SM Jaleel,
Grace Keenedy. Goddard.
DOING
17
:
LARGE REGIONAL FIRMS IN THE CARIBBEAN
ELEMENTS
FOR of
DESIGN
ADVANCED
DEVELOPMENT
PROGRAMMES
Drivers
GrowthOF
and
Opportunities
for Expansion into
new markets
• Growth Patterns relative to Markets:
BEING
– Pattern 1: Market Dominance.
Have a bigger slide.
– Pattern 2: Market Development. Have a bigger pie
– Pattern 3: Market Dominance as the platform for
THINKING
Market
Development. Have aKNOWING
bigger slide of a
bigger pie.
EIL
DOING
18
:
LARGE REGIONAL FIRMS IN THE CARIBBEAN
ELEMENTS
FOR of
DESIGN
ADVANCED
DEVELOPMENT
PROGRAMMES
Drivers
GrowthOF
and
Opportunities
for Expansion into
new markets
• Growth Generic Strategies:
BEING
– Strategy 1: Integration
of new value chain steps
– Strategy 2: Value deployment through new
channels
THINKING
KNOWING
– Strategy
3: Old Growth
EIL
DOING
19
Core
Business
Adjacent
Space
Entirely New
Space
Horizon 1
Horizon 2
Horizon 3
Growth Playbook of LRF in the
Caribbean
Old Growth
New Growth
Growth Matrix
• Operations in New
Locations
• Conquering new
customer segments
• New Products/Services
• New business model
• M&A/ JV’s in new value
chain step
• M&A/ JV’s of unrelated
new businesses
• M&A/JV’s within new
channels
• Market Penetration
• Replication
• Operational Effectiveness
• M&A in same
sector/value chain step
• M&A in related Markets
• JV with traditional
players
Organic Growth
Inorganic Growth
NEW
OLD
15%
5%
65%
15%
ORGANIC
INORGANIC
How will your company grow in the next 3 years?
N=11 LDF
NEW
OLD
30%
10%
40%
20%
ORGANIC
INORGANIC
How will your company grow in the next 5 years?
N=11 LDF
Goddard Enterprises
(IJV)
Angostura
(Alliance)
Kersten’s Housing (IJV)
Ansa’s Water Treatment
Solutions (Alliance)
Beverage Company
Access Colmados in DR (Alliance)
Micro Insurance for BOP
(GF)
Almonde Popular
Engineering (GF)
Massy Auto Insurance
Massy Ecosystem (GF)
What growth vehicles are preferred?
• Acquisitions
• Distribution Alliances
• Greenfield
• Least Used: International JV
27
Key Findings of the Study
• First Mover Advantage Vs. Unique Mover
Advantage
• Lack of Volume/Critical Mass not enough to
attract enough competition
• Most growth is based on the attaining
operational excellent in already mature
markets/businesses
• LRF are too regional centric. Global
benchmarks are rarely used.
28
Key Findings of the Study
• Fear of Cannibalization (Innovations might not
create new markets but cannibalize existing
ones)
• Success breeds conservatism (fear of failure)
• Localization of assets, resources, and
capabilities constrain expanding behavior
• Technology is not a mainstream ingredient in
growth trajectories
29

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