2. Cup Moscow 2011
Final Case
Russian Intellectual Tradition
Titova Elena
Korkmazov Alexey HIGHER SCHOOL OF ECONOMICS
Mnatsakan’yan Alexander N AT I O N A L R E S E A R C H U N I V E R S I T Y
Rodnyy Alexander
3. Team ENDSPIEL
Participants:
Elena Alexey Alexander Alexander
NRU HSE NRU HSE NRU HSE NRU HSE
Management Management Management Management
4 year 4 year 4 year 4 year
Team ENDSPIEL 3
4. The Long-term goal
Leader in Russian market of strategy consulting
2016
Business Value ~100,0
Revenue 100% 100,0
COGS 19% 19,0
Direct costs
Consulters
17%
23%
16,7
23,4
Improve position
Administrative 5% 4,6
Other 17% 12,0
Ebitda 19% 19,4
Revenue per Profit
Revenues Value consultant margin
Price Quantity
2011
Business Value ~20,0 *
Revenue 100% 19,0
COGS 19% 3,6
Direct costs 22% 4,2
Consulters 26% 4,9 Consultant Level of sales
Administrative 6% 1,1 Diversity of
Other 8% 1,5
Quality Brand staff
business
channels
increase development
EBITDA 19% 3,6
Source: Case data, Endspiel analysis
Team ENDSPIEL 4
5. The Problems
SPG strategy will be able to respond to internal and external challenges it faces
External Internal
> Growing demand and > Lack of integration with
stable supply of SBERBANK Group
consulting talent > Low revenue per
> Increasing importance consultant
of brand awareness > Low recurrent clients
> Increasing likelihood of rate
crisis
Team ENDSPIEL 5
6. The Scenarios
2-way approach allows to meet changing conditions
> Large companies > Medium & small companies
> Public sector > PE Fund
> IT consulting > International expantion
> No Staffing to Ukraine & Kazakhstan
problems
Increase reccurence rate
Large commercial customers
Brand awareness development
- the target
Team ENDSPIEL 6
7. The Optimistic Scenario
Business value increase by 2016
We will increase the SPG value to $100m by 2016
+$45m PE Fund
+$80m Value +$14m Oil&Gas + Energy
+$8m Manufacturing
New +$7m
+$35m FMCG
projects
+$4m Insurance
+$2m Agriculture
Team ENDSPIEL 7
8. The Optimistic Scenario
Implementation plan
2012 2013 2014 2015 2016
MARKETING
ACQUIRING NEW CLIENTS through SBERBANK GROUP
KAZAKHSTAN
UKRAINE
PE FUND
HIRE STAFF
REGIONAL DEVELOPMENT (SPb)
Team ENDSPIEL 8
9. The Optimistic Scenario
Marketing plan
Public projects Vestnik Srategy
Ads in magazines Conferences & Trainings
Team ENDSPIEL 9
10. The Optimistic Scenario
New clients acquiring plan
Clients Consulting
Clients Consulting
PRIVATE EQUITY
IPO
Consulting M&A
Team ENDSPIEL 10
11. The Optimistic Scenario
Industries
45%
Manufacturing
Metallurgy
Oil&Gas
21%
Transport
Government FMCG
TMT
Growth Rate
Finance
institutions
-4%
Size represents market share Competitors’ Power
28% 14% 0%
Selected industries
Source: Case data, ExpertRA
Team ENDSPIEL 11
12. The Optimistic Scenario
Practices in industries
100%
HR
Tax & Legal
80%
Organization
60% IT integration
36%
40% 50% IT management
30%
40%
Operations
15%
18% Strategy
14%
20% 14%
11%
12% Financial
20%
13% 15%
11% 10%
consulting
8%
0%
Manufacturing Transport Energy Government Finance Oil&Gas
institutions
Source: Case data, ExpertRA
Team ENDSPIEL 12
13. The Optimistic Scenario
CIS
Kazakhstan Ukraine
> Government (sustain) > Finance (Troika Dialog)
> Oil&Gas > Agriculture
> Energy GDP (Ukraine), % Agriculture
7.8
Other Mining Reprocessing
25 6.2 22.4
> Mining
Healthcare
3.5
> Agriculture
Education
> Finance (Troika Dialog) 5.7
Retail
Energy & gas
3.6
Transport Development
15.7
10.5 4
Team ENDSPIEL 13
14. The Optimistic Scenario
Private Equity Fund will bring in an income of $45m* by 2016
2016
$145m
Consulting
$90m
5-10 growth
$2000
m
Firms
$100m $1000 m
$200 m
~10% share
$ 145m will be returned to Sberbank,
$ 10m – to the partners
Investment: 10-20% in small- and medium-sized companies (value $50-100 M) in FMCG, manufacturing, insurance
Team ENDSPIEL 14
16. The Optimistic Scenario
Staffing sources
Partners and Junior
partners Directors & Managers
20% Industry
42% 30% Industry
60% 20%
IG 28% IG
Own Own
Managers Analysts
29% Industry 27% Industry
53%
18% IG 67% 6% IG
Own Graduates
Hire 394 employees by 5 years
Total Hiring expenses $20,6 m for 5 years ($52400 per 1)
Team ENDSPIEL 15
17. The Optimistic Scenario
Saint-Petersburg office
> Staff ~100
> Rental price of office is up to 2
times lower
Total Consulting Revenue Breakdown in Russia, %
Moscow
Saint Petersburg
Siberia
Privolzskyi FD
18% Central
Other
Source: Case data, ExpertRA
Team ENDSPIEL 17
18. The Pessimistic Scenario
Business value increase by 2016
We will increase the SPG value to $70m by 2016
+$15m M&A
+$50m Value +$15m
Oil&Gas +
Energy
New +$10m
+$35m Government
projects
+$10m Finance
Team ENDSPIEL 18
19. The Pessimistic Scenario
Implementation plan
2012 2013 2014 2015 2016
MARKETING
ACQUIRING NEW CLIENTS through SBERBANK GROUP
KAZAKHSTAN
BUY an IT-CONSULTANT
CONCENTRATE on GOVERNMENT, FINANCE and OIL&GAS
Team ENDSPIEL 19
20. The Pessimistic Scenario
Industries
40%
Finance
institutions
FMCG
Government
Transport
TMT
3%
Manufacturing
Growth Rate
Oil&Gas
Metallurgy
-34%
27% 15% Competitors’ power 3%
Size represents market share
Selected industries
Source: Case data, ExpertRA
Team ENDSPIEL 20
21. The Pessimistic Scenario
Practices in industries
100%
HR
Tax & Legal
80%
7%
7%
9% Organization
11%
60% IT integration
36%
40% 18% 50% IT management
30%
40%
27%
Operations
15%
18% Strategy
14%
20% 14%
11%
12% Financial
20%
13% 15%
11% 10%
consulting
8%
0%
Manufacturing Transport Energy Government Finance Oil&Gas
institutions
Source: Case data, ExpertRA
Team ENDSPIEL 21
22. The Pessimistic Scenario
M&A
~$10m
Staff 180
IT - management IT - integration
60% revenue 40% staff 40% revenue 60% staff
Staff (72) New staff (18) Sell to
0%
Own
Stay Fire 28%
or
50% 50% Accenture
72%
Team ENDSPIEL 22
23. The Pessimistic Scenario
Check list
Achieve for quadruple growth
Optimistic Pessimistic
IT-managem.
Government
Manufacturing
Oil&Gas
practice
UA & KZ
Oil&Gas
PE Fund
Finance
M&A
FMCG
Diversified Growth Artificial Growth
Team ENDSPIEL 23
24. That’s it.
Questions, please.
Team ENDSPIEL 24
26. The Risks
Probability
3 4
high 7
8 1 6
5
medium 2b
2a
low 2c
low medium high Effects
1) Possible organizational culture barriers 4) Uncertainty with crisis 2012
2) Problems with finding: 5) Absence of forecasted money return
a) project 6) Troika’s reluctance of cooperation
b) qualified personal 7) Absence of adjusted PEF – system
c) money 8) Evaluation of benefits from selling IT - integrator
3) Political situation
Team ENDSPIEL 26