Creating The Post-Acquisition Operating Model For An Online Telecoms Business

What was the challenge?

An independent mobile phone business had acquired an online competitor and wanted to reduce the operating costs and extend the proposition offer through effective integration. We were asked to provide strategic options for the new operating model, develop an implementation approach and manage the integration through to completion.

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The acquired business targeted a sector of the market that was not otherwise addressed by the parent brand. It was therefore important to retain the channel to market and the independent brand identity.  The online platform also provided a valuable point of differentiation however it was highly bespoke and locally maintained.

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The business was geographically separated and most of the business functions were replicated in both locations.

What was the approach?

Our first task was to identify those aspects of the acquired business that were unique and specifically differentiated it from existing sales channels.  As well as the technical and procedural differences the team culture and business ethos played a critical part in the brand identity and needed to be retained. We assessed the technology platform, specifically looking at its long-term suitability and how it was maintained. We reviewed the external relationships with suppliers and other partners and we identified critical internal knowledge and capabilities that needed to be held on to.  These assessments, along with other practical considerations such as office accommodation and local labour costs, enabled us to present a set of strategic recommendations along with the associated risks and benefits.
In collaboration with the joint teams we then developed the process and technology implementation plans and the associated people and communications plans.  We worked with the HR partners and other workstream leads to provide full programme coordination to ensure a smooth transition to the new operating model.

How did we help?

The integration recommendation that we presented enabled the new business to take advantage of operational capabilities within the parent business in order to simplify processes and significantly reduce its day to day costs.  At the same time the brand remained as a distinct operating business with clear hand-off points for shared services such that a future separation and sale could be possible.  The customer proposition was extended to include selected products from the parent company and new B2B revenue streams were introduced.  We ensured that the integration was smooth and timely and the changes that we introduced led to a 17% increase in net profits.  The business continues to operate today as a successful and distinct consumer brand.