Identified 5 revenue opportunities in adjacent markets.
Conservatively generating €9m incremental revenue per annum by year 5.
Pathfinder provided a methodology to explore the team’s assets and capabilities and pushed them to think differently. To further develop each opportunity, Pathfinder developed a framework to maximise their input into evaluating and developing the opportunities.
The National Transport Authority (NTA) has started to put certain routes out to tender. Traditionally, our client did not have to compete to be awarded public transport contracts, but this model is changing and the company needed to adapt. On top of this, the tendering process, with its focus on costs, put our client at a disadvantage. Generally, the transport provider’s costs are higher than the market average due to the unionisation of the company driving up labour costs.
What we did
Working with the transport provider, we:
- Carried out a review of their current assets and capabilities with teams from across the business, to identify those that could be utilised to generate new revenue for the company.
- Provided the expertise and a methodology to explore how the business could better exploit its assets and capabilities to grow revenue in new markets.
- Brought a commercial viewpoint to the discussion, which challenged the team to think outside of their ‘PSO world’ and develop a more commercial mindset when considering opportunities.
- Developed and provided business case templates and the necessary guidance to complete them so that the teams had the framework required to maximise their input and evaluation of the opportunity.
We identified five potential opportunities to generate commercial revenue. These provided our client with options they can explore and develop in order to decide which aligns best with their aspirations. We also provided high-level five-year financial projections for each opportunity to demonstrate the financial viability of each along with a high-level implementation plan.
Several ‘quick-wins’ were identified, which could be rolled out with minimal investment within 3 months and would generate revenue which could be used to fund the larger, capital-intensive opportunities. The opportunities identified would generate a conservatively estimated €9m in annual incremental revenue with an annual profit of €4.2m.
These opportunities would significantly reduce the company’s reliance on its PSO business to generate revenue and maintain profitability. It would also enable it to better deploy its current assets and increase the overall return on assets of the company. This would also enable the company to increase investment in several areas as their ability to keep profit earned from their PSO contracts is hampered by limitations set by the NTA.