Assessment of a European Business Unit's market and performance
The Problem: Limited understanding of a European Business Unit’s market and performance
Our client, The Group Management of a leading pan-European diagnostics provider, had a limited understanding of the market conditions of one if its key Business Units in Spain, and how these conditions interacted with the Business Unit performance and future strategy. Credo was asked to perform an in-depth review of the Spanish diagnostic services market, as well as analysis of internal performance, and make recommendations of future strategy.
Our Approach: Internal profitability analysis matched to key market developments
Credo performed a ‘classic’ strategic market review. This involved rigorous secondary research, combined with a wide-reaching primary interview programme, conducted in Spanish, with key market participants (commissioners, clinicians, investors etc.). We focused on key dynamics within the market: key national and regional healthcare policies; overall funding, and how this played out at a regional, as well as national level; the impact of austerity, on both pricing and independent sector volumes contracting dynamics, and how these were evolving in light of policy and funding changes; the competitive environment, and how changes to the supply base would increase/ decrease competitive intensity on a region by region basis.
Alongside this market review, Credo also analysed key internal data to build up a strong understanding of the financial performance, broken down by contract, region and service line.
Using this data-led approach, we were able to make strategic recommendations to the country and Group management, identifying key service lines to focus on going forwards. Alongside management, Credo also developed a new proposition within the market, which was tailored to the key pressures facing healthcare commissioners/ budget holders, and was identified as potentially giving a key competitive advantage to our client.
The Result: Successful reorganisation which reversed the performance decline
Using the Credo strategic roadmap, the country management was able to carry out focused strategic actions. This helped preserve profitability despute significant pressures as a result of the Spanish austerity programme. The client has also been able to retain
In addition, the client created a new Business Development resource to target the development of the new proposition that has been drafted between management and Credo. Whilst this remains an ongoing process, the client has received highly positive feedback by commissioners as to the future potential of the proposition.