A mid-sized retail and residential community developer in Saudi Arabia aspired to become the local market leader. The company wanted to determine whether this goal was achievable in five or 10 years, which segments should be expanded, how to capture market share from competitors that are more flexible or have deeper pockets, how to finance the growth, and what structure and how much manpower would be needed. The client tapped Strategy& to conduct a detailed market assessment and develop the growth strategy, business plan, and high-level operating model.
The Strategy& team conducted a detailed gap assessment across four key segments, finding more than 20 single growth opportunities. Our baseline of current assets and operating properties identified growth and optimization levers. With this input we devised a practical growth strategy highlighting the segments and sub-segments of growth, fair market share targets, and associated financial and operational targets. We built 10-year financial projections and detailed the optimal use of equity and debt sources at the corporate and project levels. We provided a lower-level organization structure and manpower forecast that would support the future growth.
The growth strategy calculated a tripling of net income targets over the next 10 years with limited equity injections, and projected a return on investment of 17 to 20 percent by 2023. The client’s board approved the strategy, and since then multiple projects have been launched and the organization augmented as per the original recommendation.