Proposal 3 - Market Entry Strategy into Water Industry
Duration/Members/W&L Balance:
I think it's partly because of the timing and the season, but this is the third proposal I've worked on in a row. It's quite common for there to be staffing scheduling conflicts during the end of the year, around Christmas and New Years. The latest that most projects kick-off would be around early December, as it's just inefficient to have all the holidays just stuck in between, and it can be quite a nuisance to just work out all the billing timetables, and seeing how you can work done at a client's site when all of your counterparts wouldn't even be at the office.
That, however, also means that you may either be working on drafting many more proposals until you are staffed on your next gig, or be lucky and just be on the beach (not literally) and enjoy some time off. Perhaps you can even enjoy some good time with family and friends like ordinary folk (jealous, as that didn't happen with me; worked even on Christmas day!)
Regardless, this particular proposal was completed over the course of 2~3 weeks. It was quite long, due to the conditions mentioned above. The client would allow for a quite long time, as they wouldn't set the deadline to be during the holidays, most likely, they would review it first thing as they get back to work on the New Year. Had the pleasure to work with one of the nicest PMs for this proposal, and was happy to see him get promoted to partner next year during the course of this proposal.
Work/life balance was actually real good, as the elongated schedule allowed us some leeway into working a bit more freely. We actually just made it an unspoken rule to hard-stop all work before 12 at night, and we would start working at 10 AM, so it was quite sustainable lifestyle to end the year.
Project Background and Industry Insight:
As the title suggests, the client was looking into entering the water industry, with no particular preferred method of entry. Admittedly, it's quite vague to just call it the 'water industry', seeing that there are so many different areas of the market to explore in its value chain. We had to also provide the most plausible area of the market to enter given the client's size, and its potential of synergy across the required capabilities of the larger global players.
Generally, the water industry industry can be broken down into multiple segments, whether it be by its usage (municipal/industrial), which by itself is a large distinction, as you would have to identify the public nature of the utilities industry, as well as the special needs of industrial water treatment, ranging from pure water distillation for semiconductor usage to the agricultural sector. The client in question already did some business in the area of manufacturing water filters to provide to water plants, but out of concern of a declining profitability of simply providing off-the-shelf type filters to large water players, there needed to be a separate engine for growth in the growing industry.
Water needs is obviously expected to increase greatly, as urbanization/industrialization across the globe increases the demand for water treatment and sewage treatment as well. Obviously the focus would be centered more towards the markets where the rate of development is greater, but it would be simply difficult to just start building water treatment plants, given the huge amount of capital required and engineering/procurement/construction capabilities it would take to successfully win over a project like that.
We steered towards focusing on the operation & maintenance (O&M) market of the water industry, given its growing demands and higher profitability levels than the remaining steps of the value chain. Given that the end-to-end water players (think Veolia, Suez, etc.) along with the multinational engineering companies (Jacobs, Hochtief) have the capability to fund their own construction projects of water plants, they have also been trying to provide a more integrated service by offering the O&M aspect as well, whilst procuring the required water treatment equipment and chemicals from separate chemical companies. Nonetheless, there was room to enter this particular O&M realm given the ample room to specialize in separate areas of water plan operations. Digital capabilities have definitely been a rising theme in water plan maintenance, with digital systems being able to monitor the optimal water treatment processes required, and the efficient operations being a key area of cost-saving and preventing breakdown of expensive equipment.
Method of Work/What I Learned:
I was tasked with breaking down the value chain and structuring the type of players that constitute the Water O&M market, along with their defining features that the client could relate to. Obviously, most of the work was conducted based on more of a constructed structure with little detail, as it was difficult to work off only publicly available information via web-search. This involved a thorough research into not only the reports published by private water companies, but also technical papers delineating the technology trends of water/sewage treatment. By trying to benchmark companies that have had a similar journey as the client as a manufacturer of water filters and/or equipment providers of water treatment plants to an O&M provider as well, we were able to construct a particular story line for 1) which geographic area of the market to enter, 2) the segment of the industry that is most apt to enter at first, and 3) the preferred method of entry to acquire greater capabilities of O&M.
Given that we did have some time on our hands to work this out, we generally spent a lot of time talking over the possible story line, and splitting work over each particular slide that would fit into the whole deck. Then, each consultant would be tasked with doing his/her own research, then also creating a slide with sufficient content, to be reviewed by the PM 2~3 times a day. Generally, we would have around 3~4 hrs to create each slide, which I guess is fair amount time for easier slides, but when the research proves not to be as fruitful, I'd find myself going over in loops to see how can re-arrange particular ideas to make it work. This time, there definitely was more direct communication with the PM to inform that we would have the delete one particular slide of the story, or whether we could change it to a different direction mostly out of a lack of available information.
It is definitely hard to draft this proposal from scratch. This was a very specific area of the market that we were tasked with handling, so there weren't a lot of material that we could refer to. Obviously, each firm has its own database of its own intellectual capital and previous engagements with global clientele, but I doubt any firm would have done similar tracks for this particular proposal. Due to this, it felt like this RFP would be won by any firm who put in the additional effort to really try to hand-crafted message to the client, with an accurate understanding of the particular segment that the client wanted to enter, rather than the general overview that most firms would provide on their extensive experience in relevant industries and capabilities.
Consulting lingo: and work modules:
Market Entry Strategy
Organic Growth Opportunities
Entry via M&A, JV and potential suitors
Market Segmentation
By water treatment industry/geography/usage
Type of players involved and client positioning
Value chain Analysis
Key success factors and required capabilities/competencies for each step