The four keys to maximising valuation - Strategy

Strategy: Control an Industry Constraint

In Verne Harnish's book , The Greatest Business Decisions of All Time, he details how the late Robert Taylor “blackmailed” Colgate-Palmolive into purchasing his firm for $75 million, a lot of money in the Eighties. He recognised that the key component of his Softsoap liquid soap offering was the spring pump. Given there was only one manufacturer of those pumps at the time, he purchased the entire annual production of the manufacturing firm (100 million units at a price of $.12 per unit), guaranteeing Colgate, P&G, and others couldn’t compete with him — and forcing Colgate’s hand in eventually purchasing the company.

One of our clients within the Railway engineering consultancy sector recognised that there was a choke point around the amount of talent and skilled engineers within the industry. With a strategy to identify, attract and recruit the top railway engineers into their organisation they were able to gain a significant strategic advantage.  When it came to exiting their company they were able to attract a large number of strategic buyers who were happy to pay a premium in order that they could bring the talent into their organisation. Critically it prevented their competition from having access to this critical source of talent

Is there a key constraint in your industry? Gain control and your valuation will soar