Simple Management Strategy – £50m Valuation

The recent purchase of the online tyre supplier Blackcircles by Michelin shows how a well-chosen management strategy and carefully selected business tactics can be the making of your ‘natural selection’ in business.

 

Are you a small fish in a big pond?  Are you trying to get noticed so you can attract similar thinking organisations or are you avoiding competitors through agility? What happens when you grow?

 

A simple management strategy ensured that Black Circles maximised shareholder value

Are you a big fish in a small pond? Are you big enough to ward off competitors or predators?  Are you able to sustain yourself against smaller organisations taking small bites out of your customer base?

 

Often the answers to these age old business problems don’t require complicated management strategies or tactics or the latest thing in organisational design.  They just need clarity of thought and definite decisions to be made – without being distracted by tempting bait that is not in your usual diet.

 

Blackcircles to adopted a clear strategic theme based around operational excellence and their decision to just provide a choice of tyre to consumers and have the ‘fitting’ taken care of by independent tyre fitters around the country removed a very costly part of getting a new tyre on a car out of their value chain.  This meant that they just needed to be good at purchasing, advertising and attracting tyre fitters who wanted more work. A very simple and efficient management strategy.

 

This simplicity of strategy made factors such as employing the right people with the right skills and attitude easier. There was greater focus on employing the various business measures needed to stay on track and that clarity of thought and understanding of strategic direction added huge value.  Michelin paid £50m. That’s attracting the right kind of fish!

 

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