Page 137 - Performance Leadership

126 • Part II Operational and Analytical Dimensions

F igur e 8.3
Margin Improvement Strategies for a Midsize Funeral Business

High 1. 25% cost savings services
2. 50% higher revenue new services
3
3. Acquire other undertakers
1 4. Collaborate with other undertakers
5. Being acquired
2 6. Increase spending on staff attraction
4
7. Cost saving on sponsor program
Risk
5

6
7
Low
Low Impact High

for performing personalized services is there, as the company is family-
owned and highly flexible. However, there is a strategic and market
risk. In a rural area there may not be that much demand for these serv-
ices and the return on investment may not be very high.
Another option would be to acquire other small- to medium-sized
undertakers. However, the strategic risk is very high as B&S are not
experts in acquisition and integration. The impact of this betting-the-
farm option is very significant: the company could go out of business.
An option with a significantly lower risk, and less negative impact,
would be to collaborate with various undertakers to create economies
of scale while still operating as independent companies. The risk is still
considerable because family-owned businesses tend to have developed
their own specific ways of working and may not agree on common
processes.
Another option for B&S could be seeking to be acquired. The com-
pany could, perhaps, retain its name and management, but the com-
pany would belong to one of the nationwide funeral businesses. The
risk, in this case, is not high for B&S; it is the risk of the acquirer. It
would also lead to growth and higher margins, which was the goal of
the exercise. There is, however, a large market risk since personal serv-
ice will most likely disappear under a new business model.