- Thème:Exit strategy
- Secteur:Technology
Issue
Our client commissioned us to carry out vendor commercial due diligence, to present its business in a true and fair light to potential investors. The management had a successful track record of competing against much larger rivals; in an industry where size increasingly matters, there was a need to provide compelling evidence to show that this would continue. This task was not made easy by the fact that publicly available data on the market was extremely scarce.
Approach
AMR set about clearly defining the addressable market and then used a combination of desk research and targeted expert interviews to size it. We also sought to test the hypothesis that the market had its own specific needs which differentiated it. Next, through further research and interviews with customers, competitors, and experts, we demonstrated that our client did indeed have a strong market position, and that attempts by Microsoft and Sage to take market share from it had and would fail, owing to our client’s far deeper understanding of customer requirements.
Recommendations
AMR presented the evidence clearly, explaining in layman’s terms the market our client was addressing, its competitive position, and future growth potential. We developed detailed revenue forecasts to demonstrate that a large proportion of the company’s revenue was dependent on software maintenance payments, and we could show that there was a very low risk of customers cancelling this support.
Result
Our client incorporated our report into the information it provided to potential acquirers. The clear explanation of our client’s position helped ensure that these investors truly understood the company’s strong position and valued it accordingly.
Insight from AMR’s research
There is no substitute for correctly defining the market, and pursuing a rigorous analysis of it, to help truly understand customer needs, and recognise the fact that the industry goliaths will not sweep all before them!