SERVICESHelping organizations build and assess value
Growth Strategy & Business Planning
Growth is a critical success factor and the primary driver of enterprise value. Growing faster than competitors justifies premium enterprise values. Every company seeks consistently high growth, whether it’s a start-up or a major corporation.
FSI focuses on assisting clients to achieve higher rates of growth. We may be asked to focus on a product, a business unit, or the overall company. In each case, the challenge is identifying, assessing and planning to pursue options to increase revenues and revenue potential.
FSI employs its Growth Diagnostic process as a catalyst for creating alternatives for seeking additional revenue, both within and beyond, the existing business.
FSI’s focus on growth includes developing options which are:
- Organic: created with new products, services, price points, customers, channels and/or country markets
- Inorganic: acquisition (large or small) and partnerships
FSI delivers value by ensuring every growth strategy assignment culminates with actionable output in the form of a Growth Action Plan.
FSI provides commercial due diligence for corporate, private equity and venture capital investors, as well as to companies striving to obtain investment.
Most frequently, clients ask FSI to assist with diligence regarding:
- Market assessment: size of addressable market, growth and trends impacting the target investment asset or company
- Market research with customers and non-customers to understand the value proposition, adoption factors, future growth and potential risks
- Competitive analysis: identifying and analyzing competitive advantages/disadvantages and their sustainability
- Financial forecasting: model projected revenue, margins, and potential strategic and economic synergies post combination
- Valuation and deal structure: analysis of industry benchmarks, recent transactions, deal structure, and DCF are used to advise clients about their existing and potential value
In addition to testing investment hypotheses, our diligence often extends to new value creation options, strategic insights and actionable recommendations.
For companies seeking an exit or raising funds, our diligence approach increases the number of prospective investors, improves valuation and accelerates time to closing.
FSI is prepared to support diligence efforts within the typically compressed timeframes.
M&A Opportunity Landscape
Clients ask FSI to do the research required to move beyond a normative list of readily visible acquisition prospects. A more expansive, valuable list includes:
- Capabilities which leverage existing core competencies
- Capabilities customers need that competitors are not providing
- Emerging technologies that augment or disrupt the existing business
- Suppliers, partners, etc. that broaden core capabilities
- Alternatives to products and services being developed by competitors
- Indirect competitors which expand market potential
FSI’s 30+ years of developing industry specialists enables an efficient, strategic analysis of relevant markets and creation of a comprehensive list of acquisition prospects. We further assist clients with development of information needed to prioritize attractive acquisition targets.
FSI is the premier provider of market assessments for clients in healthcare, technology and technology-based businesses. Clients request our assistance with analysis/research to:
- Analyze the potential of new products
- Design/test new products
- Determine optimal product/service pricing
- Identify customer needs and basis of competitive advantage
- Test customer satisfaction
- Target end markets for broadly-applicable technology
- Identify how best to increase business within existing accounts
- Develop approaches to increase the win rate for new accounts
- Determine the revenue outlook for acquisitions/investments in context of market diligence
FSI’s Voice of Customer/Non-Customer research is distinctive and delivers great utility given our approach:
- Upfront delineation of alternative management decisions and information needs
- Client/FSI collaboration on details of the research approach
- Carefully developed sampling protocols given knowledge of the types of decision makers, influencers and segments our client will sell to
- Proprietary databases of healthcare and technical opinion leaders, as well as high volume customers
- Ability to conduct research in native languages of the major international markets
- FSI employs a “Deep Dialogue” approach versus “check-the-box” research. Our professionals engage interviewees, at a scientific or technical level, in detailed discussions of their needs, our client’s solution, perspective on competitive alternatives, purchase criteria and participants in the purchasing process
- Supplemental quantitative online research where beneficial to our client’s needs
- Dedicated client team (with relevant subject matter expertise) conducts every interview, analyzes the responses by segment and participates in development of a Growth Action Plan for our client
FSI assumes every company monitors its competitors via publicly available information. Our competitive analysis develops information which is not public, e.g., through interviews with the competitor’s customers, former employees and business relationships (e.g., distributors), of competitors and associated analyses based on primary and secondary research (e.g., technical reports, clinical reports, patents, financials, regulatory filings) information.
FSI’s value-added is to assist our client to understand and react to:
- Customers who considered our client and chose a competitor
- Customers our client did not get the opportunity to compete for
- How competitors sell against our client
- What customers most value from competitors relative to our client
- Product, marketing, sales, pricing, initiatives of competitors
- Relative capabilities, costs and investments of competitors
- How competitors will most likely react to client initiatives: “War Gaming”
FSI conducts strategic valuations to assist clients with major decisions regarding preparation for sale, partnering, financing, acquisition, portfolio optimization, etc. Clients requesting valuation assistance may be working on either a “buy side” or “sell side” decision.
Strategic valuations are based on market sizing, revenue forecasts, business modeling and financial analysis. The focus of our valuation work may be on our client’s company, other companies or elements of a company, i.e., business units, products and intellectual property.
FSI’s valuation work includes:
- Building financial and operating forecasts, incorporating the promise inherent in the business proposition, taking into account resources invested to date, IP contributions, management capabilities, etc.
- Pressure-testing assumptions, e.g., pricing, through primary research
- Research and dimensionalizing analogues and/or best practices
- Analyzing alternative values based on:
- Comparable companies
- Industry transactions
- Royalty agreements
- Risk-weighted discounted cash flows
- Developing opportunities to increase value driven by insights from our analysis
FSI’s strategic valuations are developed to both assist client decision making and inform potential investors, acquirers and partners.
Strategic Positioning & Value Proposition
Customers always have real needs and multiple choices. Marketplace success depends on achieving a competitively differentiated positioning, linked to the customer’s needs and overall “requirements to serve”. High impact strategic positioning conveys:
- Product capabilities in context of solving customer needs
- Pricing in context of cost-effective
- Services, training, purchase experience, etc. aligned with customer preferences
FSI assists clients with the development of competitively differentiated positioning based upon primary market research with our client’s customers, prospective customers and the customers of competitors. From that research we extract the multiple factors on which purchase decisions are based to determine their relative importance. Our output is both an Economic Value Proposition (why cost-effective) and a Performance Value Proposition (how meet customer needs). FSI then integrates the Economic and Performance Value propositions to provide the overall strategic positioning which becomes fundamental to both marketing and sales.
Business Innovation & Technology Commercialization
The healthcare and technology sectors provide an ongoing flow of research developments. Technical/scientific discoveries are not equivalent to business innovation. Significant work is required to determine how best to commercialize innovations. Among the critical issues to consider:
- Feasible end-market applications
- Technical, non-technical and economic requirements for success
- Advantages to pursue independently versus with a partner
- Prioritization of market opportunities
- How best to accomplish the major stages of commercialization
FSI has assisted thousands of innovators (corporate labs, universities, government labs, medical schools, and entrepreneurs) with commercialization plans and assistance. Over FSI’s 30+ years, we have formed companies, created licensing deals, established joint ventures and helped to rationalize R&D portfolios.
Partnering & Funding Strategy
Healthcare and technology businesses have an insatiable need for innovation. That enormous need drives companies of every size to seek partnerships (including licensing deals) to combine capabilities and/or resources for innovation success. Effective partnering requires thoughtful prospective partner selection and vetting, delineating the relative value of alternative partners, and determining the appropriate business aspects of the relationship.
FSI facilitates strategic partnering employing our experience, extensive industry contacts and situation-specific research.
FSI assists companies with major fund raising efforts:
- Creating documentation to best communicate the business opportunity, capital needs/use, valuation and return potential
FSI also assists companies in executing private placement capital raises:
- Developing curated investor lists leveraging FSI’s decades of experience in venture capital and strategy consulting
- Soliciting investor interest, facilitating meetings, coordinating due diligence efforts, advising on term sheet negotiations and closing documents