bc

Client X Business
Case for Change
Contacts: Jeremy Lagomarsino
Lauren Franks

March 2000
Copyright© 1998 Bain & Company, Inc.
Client X Business Case for Change
Agenda

• Summary

• Revenue and Profit Growth

• Revenue Growth

• Stock Performance

Core Process Redesign Toolkit

BOS BUSINESSCASEC 2
HANGE
Client X Business Case for Change
Summary

• Competitors A and B have outperformed Client

X’s growth rates since 1990

• Competitors A and B have experienced

increases in operating margins, whereas Client
X’s operating margins have dropped severely
during 1997 - 1999

• Client X’s stock has underperformed its

competitors since Jun 1997

Core Process Redesign Toolkit

BOS BUSINESSCASEC 3
HANGE
Client X Business Case for Change
Revenue and Profit Growth
(1990-99)
Annual Revenue Growth Operating Margins 1990-93
1994-96
1997-99
6% 5.6%
30%

27.0%
Compounded Annual Growth Rate

25.0%
23.0%

23.0%
25%

Average Operating Margins

4.5%

19.0%
3.9%

4% 20%
3.5%

16.0%
15%

12.0%
9.7%
1.8%

2% 10%

6.0%
1.2%

1.0%

1.0%

5%
0.5%

0% 0%
Client X Competitor Competitor Client X Competitor Competitor
A B A B

Core Process Redesign Toolkit

BOS BUSINESSCASEC 4
HANGE
Client X Business Case for Change
Revenue Growth
% Change Q198 - Q199

% Change Q298 - Q299

45.0%
% Change Q398 - Q399
50%
% Change Q498 - Q499

34.0%
40%

32.0%
29.0%
Percent Change

26.0%
30%

20%

13.0%
12.0%
10.0%
8.0%
7.5%
7.2%

10%
1.0%

0%
Client X Competitor A Competitor B

Core Process Redesign Toolkit

BOS BUSINESSCASEC 5
HANGE
 Indexed Stock Price (June 1997=1)

0
1
2
3
4
5
6
7
Jun-97
Jul-97
Aug-97
Sep-97
Oct-97
Nov-97
Dec-97
Jan-98
Feb-98
Mar-98
Apr-98
May-98
Jun-98
Jul-98
Aug-98
Client X Business Case for Change

Sep-98
Oct-98
Nov-98
Dec-98
Jan-99

Monthly Closing Price

Feb-99
Mar-99
Apr-99
May-99
Jun-99
Jul-99
Aug-99
Sep-99
Oct-99
Nov-99
BOS

Dec-99
HANGE
Client X

S&P 500

BUSINESSCASEC
Competitor B
Competitor A

6
Core Process Redesign Toolkit
Stock Performance (Historic)