You get into a Blackjack game hoping to win every hand. Some people would argue that winning is not up to you, it is in the cards. I like to think that in today’s business environment, you create your own luck. Although luck can play a role in business success, ultimately, it is about how well prepared you are and whether you have the right tools in place. Let’s face it, Bill Gates, is not lucky.
Behind every successful business is a sound strategy. Behind every sound strategy, is an informed and educated leader or team of leaders working towards a common set of goals. Oftentimes, however, business leaders are so involved in day-to-day operations that they find it extremely difficult to discern all the nuances of a business and to do so in an objective manner. Consequently, consultants are sought to conduct independent research and suggest a customized strategy. Recommendations usually take the form of a 'bet', 'fold', or 'bluff' strategy.
If the company is to 'bet', the consultant team has likely discerned that their client is in the appropriate capital position, has articulated a sound strategy and has the right infrastructure (i.e. management team, technology, etc.) in place to grow, expand and perhaps acquire. If the company is to 'fold', the consultant team through careful analysis has aptly concluded that the organization is not operating at a profitable level and would benefit from divesting their non-core business, for example. Finally, if the company 'bluffs' so to speak, it has been advised that they continue operating in the most efficient manner possible where they can maximize return on their existing asset/s but sit and wait for a market opportunity while staying afloat.
In a recent case, HVS International conducted an analysis for a luxury hotel company on whether to 'bet', 'fold', or 'bluff'. Although the client was performing well at the bottom-line, it struggled with growth. Through rigorous financial analysis and lengthy management interviews, it was evidenced that the company lacked a cohesive strategic plan and solid managerial and capital structures to compete. HVS assisted the company in re-designing these areas to meet the needs of today's transaction market. Furthermore, the firm provided the company with on-going operational reviews to maximize current bottom-line results, while simultaneously building a performance model for future growth.
It is no surprise that the 2004 upswing forecast in the hospitality industry has led to greater interest in companies thinking about how they may grow. We encourage you to start thinking about your strategy... or are you going to wait around and hope to get lucky?
Evaluating and selecting growth strategies
About the Author
Anshuma Lal is Vice President of Strategic Advisory Services, an extension of HVS's Asset Management led by President, Mark Lynn. Strategic Advisory is designed to provide business strategy development, mergers, and acquisitions advisory as an additional product offering. This will be done by utilizing existing hospitality industry expertise, coupled with HVS's unmatched market knowledge and financial performance data.
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