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Success Formulas for theNext Decade
5 July 2011
Dr. Andrej VizjakPartner – PwC RomaniaConsulting Leader – PwC SEE
Vasile IugaCountry Managing Partner – PwC RomaniaManaging Partner – PwC SEE
www.pwc.com/ro
PwC RomaniaJuly 2011Success Formulas for the Next Decade
Slide 2
PwC Romania
The first strategy book on Romanian companies
Slide 3July 2011Success Formulas for the Next Decade
• The first book that includes a detailed analysis of thesuccessful strategies of international and Romaniancompanies that emerge as winners of the crisis, fromdifferent industries
• Released with the support of Publica Publishing House
• Analyzes concentration tendencies of companies in variouseconomic areas, both globally and nationally
• Identifies a series of strategies through which companies cangrow in times of fierce competition and in a difficulteconomic context
• Comprises a balanced mix of theory and specific case studies(success stories of selected companies)
PwC Romania
Each industry concentration process takes 25years on average to be completed
Slide 4July 2011Success Formulas for the Next Decade
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
45%
-10 -5 0 5 10 15 20 25
CR3
Years
Paper
Drugs
Natural gas liquids
Semiconductors
Telecom
BrewersRailways
Insurance
Divers. ChemicalsUtilities
Automotive SupplierRestaurants & Fast Food
Steel Producer integratedAutomotive Mfrs.
Confectionary
Truck & Trailer Mfrs.
Shipbuilding
Distillers
Cigarette
Defence Electr.
Soft drinks
Aluminium Producers
Food Retail
Airlines
Integrated oil & gas
Ore Mining
Banks
Consumer Electronics
Divers. FoodRubber & Tire Mfrs.
30
Thetotal
marketshare of
threelargestcompa-nies on
theglobalmarket
Opening Scale Focus Balance
PwC Romania
The book identifies four winner types of the pastdecade and defines their strategies as successformulas for the next decade
Slide 5July 2011Success Formulas for the Next Decade
ProductDiversification
Internationalisation
RegionalHero
IndustryShark
LocalSpecialist
InternationalChampion
PwC Romania
These four winner types are growing andacquiring companies even during the currentglobal economic crisisAnnual transaction value of all M&As worldwide according tothe four winner profiles (in bn. US $)
Slide 6July 2011Success Formulas for the Next Decade
1867
836
392 264607
809
14241767
913 798 776
412
288
214167
244
332
388
558
457
195 286
408
284
236287
360
436
600
814
519
289456
289
176
153159
208
242
260
292
197
120
186
0
500
1000
1500
2000
2500
3000
3500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Local Specialist
Regional Hero
InternationalChampion
Industry Shark
Data source: Dealogic (Jan 2011)
2976
1584
995 877
1419
1819
2672
3431
2086
1402
1704
PwC Romania
Organic growth is no longer enough to guaranteethe long-term successTotal transaction value of all M&As worldwide (2000-2010)by the winner profiles
Slide 7July 2011Success Formulas for the Next Decade
Data source: Dealogic (Jan 2011)
Industry Shark50%
InternationalChampion
17%
Regional Hero22%
Local Specialist11%
100% = 20,965 bn. US$
PwC Romania
All four winner types survive the industryconcentration, however the InternationalChampions are the most frequent winners in thefinal “Balance” phaseDistribution of winner types by phases of industry concentration
Slide 8July 2011Success Formulas for the Next Decade
6 814
20
49
61
71
17
20
15
7
63
2516
7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Opening Scale Focus Balance
Local Specialist
Regional Hero
InternationalChampion
Industry Shark
Source: sample of 600 winners of the crisis
113 (100%) 302 (100%) 148 (100%) 37 (100%)
PwC Romania
Success factors in concentrating industries
Slide 9July 2011Success Formulas for the Next Decade
Determinescale profile
Examinegrowth
direction
Developuniquegrowth
capabilities
Use rightgrowth paths
Adjustorganization
Benchmarkgrowth profile
PwC Romania Slide 10
We differentiate on each of the 6 dimensions 4strategic options, resulting in 4,096 potentialgrowth cube combinations
July 2011Success Formulas for the Next Decade
SmallerIndustryLeaders
SalesGrowers
Determinescale profile
Benchmarkgrowth profile
Examine growthdirection
Adjustorganization
LargeIndustryLeaders
SmallerIndustry
Followers
LargeIndustry
Followers
TopPerformers
Under-performers
ProfitGrowers
RegionalMulti-
BusinessNiches
Total GlobalMarket
RegionalProductNiches
InternationalProductNiches
DecentralizedProduct
Units
DecentralizedProduct and
RegionalUnits
CentralizedFunctional
Units
DecentralizedRegional
Units
Develop uniquegrowth capabilities
Market -Related
Capabilities
Scale-Related
Capabilities
Productand/or
RegionalFocus
Product-Related
Capabilities
Use right growthpaths
Acquisitions MegaMergers
OrganicGrowth
Cooperations
PwC Romania
The book specifies the success formulas (growthcube combinations) of the four winner types
1. PositionYour ScaleProfile
2. Bench-mark YourGrowthProfile
3. ReviewYour GrowthDirection
4. LeverageUniqueGrowthCapabili-ties
5. Applythe RightGrowthPaths
6. AdaptYourOrganiza-tion
1. Positionyour scale
profile
2. Bench-mark your
growthprofile
3. Reviewyour
growthdirection
4. Leverageuniquegrowth
capabilities
5. Applythe rightgrowthpaths
6. Adaptyour
organization
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
45%
-10 -5 0 5 10 15 20 25Years
Paper
Drugs
Natural gas liquids
Semiconductors
Telecom
BrewersRailways
Insurance
Divers. Chemicals
Utilities
Automotive Supplier
Restaurants & Fast Food
Steel Producer integratedAutomotive Mfrs.
Confectionary
Truck & Trailer Mfrs.
Shipbuilding
Distillers
Cigarette
Defence Electr.
Soft drinks
Aluminium Producers
Food Retail
Airlines
Integrated oil & gas
Ore Mining
Banks
Consumer Electronics
Divers. FoodRubber & Tire Mfrs.
30
Smaller and LargeIndustry Followers
Smaller and LargeIndustry Followers
Industry Leaders andLarge
Industry Followers
Smaller IndustryFollowers
Top Performerswith priority on
profit growth
Top Performerswith priority on
profit growth
Top Performerswith priority on
sales growth
Top Performerswith priority on
sales growth
RegionalProduct Niches
Regional Multi-Business Niches
InternationalProduct Niches
TotalGlobal Market
Product and/orRegional Focus
Market-RelatedCapabilities
Product-RelatedCapabilities
Scale-RelatedCapabilities
OrganicGrowth
Acquisitions andCooperations
Acquisitions andCooperations
MegaMergers
CentralizedFunctional Units
DecentralizedProduct Units and
Centralized MarketingFunction
DecentralizedRegional Units andCentralized Product
Functions
DecentralizedProduct and
Regional Units
Industry SharkLocal Specialist Regional Hero International Champion
Slide 11
PwC RomaniaJuly 2011Success Formulas for the Next Decade
Slide 12
Local Specialist
PwC Romania
Local Specialist – the success formula
Slide 13July 2011
1. Positionyour scale
profile
2. Bench-mark your
growthprofile
3. Reviewyour
growthdirection
4. Leverageuniquegrowth
capabilities
5. Applythe rightgrowthpaths
6. Adaptyour
organization
Smaller Industry Followers
Top Performerswith priority on profit growth
Regional Product Niches
Product and/or Regional Focus
Organic Growth
Centralized Functional Units
LocalSpecialist
Success Formulas for the Next Decade
PwC RomaniaJuly 2011Success Formulas for the Next Decade
Slide 14
Regional Hero
PwC Romania
Regional Hero – the success formula
Slide 15July 2011
1. Positionyour scale
profile
2. Bench-mark your
growthprofile
3. Reviewyour
growthdirection
4. Leverageuniquegrowth
capabilities
5. Applythe rightgrowthpaths
6. Adaptyour
organization
RegionalHero
Smaller and LargeIndustry Followers
Top Performerswith priority on profit growth
Regional Multi-Business Niches
Market-Related Capabilities
Acquisitions and Cooperations
Decentralized Product Units andCentralized Marketing Function
Success Formulas for the Next Decade
PwC RomaniaJuly 2011Success Formulas for the Next Decade
Slide 16
International Champion
PwC Romania
International Champion – the success formula
Slide 17July 2011
1. Positionyour scale
profile
2. Bench-mark your
growthprofile
3. Reviewyour
growthdirection
4. Leverageuniquegrowth
capabilities
5. Applythe rightgrowthpaths
6. Adaptyour
organization
InternationalChampion
Smaller and LargeIndustry Followers
Top Performerswith priority on sales growth
International Product Niches
Product-Related Capabilities
Acquisitions and Cooperations
Decentralized Regional Unitsand
Centralized Product Functions
Success Formulas for the Next Decade
PwC RomaniaJuly 2011Success Formulas for the Next Decade
Slide 18
Industry Shark
PwC Romania
Industry Shark – the success formula
Slide 19July 2011
1. Positionyour scale
profile
2. Bench-mark your
growthprofile
3. Reviewyour
growthdirection
4. Leverageuniquegrowth
capabilities
5. Applythe rightgrowthpaths
6. Adaptyour
organization
IndustryShark
Industry Leaders and LargeIndustry Followers
Top Performerswith priority on sales growth
Total Global Market
Scale-Related Capabilities
Mega Mergers
DecentralizedProduct and Regional Units
Success Formulas for the Next Decade
PwC Romania
Top 500 Romanian companies by profileHigh potential for M&A in the next decade
Slide 20July 2011Success Formulas for the Next Decade
9
23
18
8
18
42
55
27
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
No. of companies Reveue in 2009
Local Specialist
Regional Hero
InternationalChampion
Industry Shark
100% 100%
Romanian economy – opening phase
PwC Romania
Top 500 Romanian companies by profile and sector
Slide 21July 2011Success Formulas for the Next Decade
43
10
21
1
17
76
2
10
36
24
42
35
36
7
10
26
9
7
18
11
21
73
57
17
12
51
9
56
1
6
11
33
72
26
16
7
60
30
55
13
99
34
0% 20% 40% 60% 80% 100%
Automotive
Industrial and consumer products
Pharma
Oil & Gas
Banking
Telecom
Construction
Retail
Utilities
Insurance
Transport
Food
Industry Shark International Champion Regional Hero Local Specialist
PwC Romania
Selected winner companies in RomaniaCase studies of the book
Telecom
VodafoneRomtelecom
Utilities
GDF SuezCEZ
Slide 22July 2011Success Formulas for the Next Decade
RegionalHero
IndustryShark
LocalSpecialist
InternationalChampion
Food
Caroli Foods
Pharma
Labormed
Online media
Internet Corp
Banking
BRD Societe Generale
Retail
Metro Group
Insurance
Omniasig Vienna Insurance Group
Automotive
Dacia Renault
Consumer Goods
Gorenje
PwC RomaniaJuly 2011Success Formulas for the Next Decade
Slide 23
Thank you!
This publication has been prepared for general guidance on matters of interest only, and doesnot constitute professional advice. You should not act upon the information contained in thispublication without obtaining specific professional advice. No representation or warranty(express or implied) is given as to the accuracy or completeness of the information containedin this publication, and, to the extent permitted by law, PricewaterhouseCoopers Audit SRL, itsmembers, employees and agents do not accept or assume any liability, responsibility or duty ofcare for any consequences of you or anyone else acting, or refraining to act, in reliance on theinformation contained in this publication or for any decision based on it.
© 2011 PricewaterhouseCoopers Audit SRL. All rights reserved. In this document, “PwC”refers to PricewaterhouseCoopers Audit SRL, which is a member firm ofPricewaterhouseCoopers International Limited, each member firm of which is a separate legalentity.