Reports by Sector | Report List A-Z or Date Order | Databases | Commissioned | Surveys

About  | News | Press Info | Home

1. INTRODUCTION

A client was involved in raising capital for a management buy out of a building product mmanufacturer/distributor. The company concerned are primarily adding value to an otherwise commodity-like building product.

AMA Research were asked to consider the marketing and strategic issues for the company, with a view to determining whether there were sufficient growth opportunities for the company to achieve their ambitious plans.

2. PROJECT OBJECTIVES

The overall objective of the project is to assess the company, strengths, weaknesses, opportunities and threats, the current and future market prospects for the sectors in which the company operates, competitive position, the viability of their business plan and identify critical issues affecting achievement of this plan.

More specifically, issues for examination are:

Macro Factors

• To review the house building and construction market in terms of the historic, current and prospective trends. In addition, to put those trends into perspective relative to the company and their trading activities.
• To assess public and private sector new housing, industrial new build and RMI (Repair, Maintenance, Improvement) trends in all sectors.
• To analyse the timber supply sector, in terms of average prices in relevant markets, factors affecting prices, market trends, Eastern European Supply, and other critical issues affecting the company. Analysis to address historic, current and future trends and their implications.

Micro Factors

• To assess a specific sector of the building products market within the construction industry, the inter-relationship with other sectors, prospective growth, environmental issues (such as waste), key competitors, key issues.
• To assess an added value market (where the company are strong), with a review of growth prospects, competitors, key issues and the implications.
• To investigate the merchanting and certain timber products sector, in particular the competition, development of the sector, key issues and the possible impact on the company.
• To assess a number of key issues in particular:

• Growth prospects for certain added value products.
• The company’s ability to achieve national deals with major housebuilders.
• The company’s prospects for entry and growth in the commercial sector.

• To understand customer views of the company, in particular, housebuilders, merchants and building contractors. To understand whether the company’s organisational structure and operation are appropriate to customers’ needs.
• To establish a strengths, weaknesses, opportunities and threats appraisal of the company, with assessment of their critical success factors.

3. RESEARCH/CONSULTING METHODS

We envisage the following research and consultancy requirements:

• Desk research on the macro inputs, market data, key influences etc.
• Interviews with:

• Management, key operational staff, at the company.
• Customers for the company – merchants, housebuilders, contractors, etc.
• Suppliers to the company.
• Industry representatives.
• Other parties, merchants, housebuilders, non-customers etc.

• A review of the business plan in the light of data arising from the above.
• Analysis and collation of the data. Preparation of report.

We approached the management to set up and agree the internal interview program. In addition, we developed lists of trade companies such as merchants and housebuilders where we undertook interviews independently from the company so that we could establish an impartial view of the company and their prospects.

We also analysed the market for certain key added value products and reviewed the prospects for these products and for the company over the next 3 years. Much of this was desk research, though we also undertook a number of trade interviews to ensure that we understood the sectors and had a reasonable grasp of the trends and future prospects for these sectors.

4. LOGISTICS

A project such as this would take some 6-8 weeks to undertake in normal circumstances, though this particular project was completed within 3 weeks as the client had an urgent deadline to meet. Obviously the elapsed time to complete such a project is dependent upon the nature of the brief, the complexity of the markets under analysis etc and every project is therefore different.

The cost of undertaking this project was between £8000 and £12000, to cover a number of personal interviews, a wide range of telephone interviews, a number of site visits and a significant amount of desk research on particular market sectors. Both figures exclude VAT but include all stationery and telephone costs.

Of course these cost will vary on a project to project basis, depending on the issues of complexity of market and products, number of interviews to be conducted, though we would provide a quote in each case to take account of these issues.

We always seek to provide a quote which is fixed, assuming the basic project objectives remain unchanged. However, in some cases, the situation is more complex and it can be impossible to provide a fixed quote, for example where we are required to buy other research information and at the commencement of the project we are uncertain as to the ultimate cost to us.

5. OUTCOMES

The output from the project was in the form of a detailed report, as discussed. We also attended a meeting to discuss any outstanding issues and to provide background to the report where required. At no stage was the proposed transaction mentioned during the research process.

The client were happy with the resultant findings and subsequently supported the management buy out (obviously taking into account financial due diligence etc). The company has gone on to nearly double turnover since the management buy out.