Elaboration of a business plan based on the market potential of a water solution provider in France

Abstract

Hamon Water Solutions (HWS), a business unit part of the Hamon Group, produces honeycomb structures used in different water management products. These products include: GEOlight a rainwater retention basin, CrossPack 22 a support for a biofilm to develop in bacterial bed technology, GEOclean a lamella decantation system, and Geotop a rainwater retention system on rooftops. All products are manufactured at the Hamon Factory in Arrou, France. An In-Company Project was recruited by HWS in order to evaluate this business unit and a possible partnership renewal with SDS Limited. In recent years, renegotiations for the SDS partnership occurred affecting production in the Arrou factory as this partnership was driving 60% of the factory volumes, including a competitive order price on raw materials. For the scope of our ICP we focused on three products of HWS being the GEOlight, the CrossPack 22, and the GEOclean specifically on the French market. It was decided with HWS to not include their fourth product, the Geotop, as there is an exclusive partnership in France, so not possible to influence. Therefore, the following are the research questions we answered: Does HWS have potential on the French market for the GEOlight®, CrossPack22 and GEOclean? If yes, which investments are needed to succeed? As well as, what would be the NPV of the investment? First, to answer these research questions, an As-Is analysis and a SWOT were developed to assess Hamon Water Solutions current situation, as well as market trends. HWS had no clear strategy to sell their products on the market. It impacted their operating model with a lack of structure and workforce, resulting in less visibility and less won projects. The findings include for GEOlight, that Hamon is lagging behind its competitors on the French market, with only 1% of market share. The lack of commercial workforce and marketing support were the reasons of its position on the market. Therefore, major investments are required to catch up and gain significant market share in France, with or without the SDS partnership. While for CrossPack 22 and GEOclean, it is a hard position for Hamon because both products have a lack of engineers. Therefore, HWS needs to decide if they market themselves just as a manufacturer and look for partnerships with major companies to sell their products or if they start to organize their own design office and then are able to provide a full solution for WWTP. With this analysis, three scenarios for the five coming years along with investments needed and NPV have been developed in which HWS could experience for the GEOlight. As well as, two scenarios for the CrossPack and GEOclean. The GEOlight scenarios include: first, SDS enters the French market and HWS sells GEOlight to SDS, HWS remains as a component manufacturer but SDS sells a full solution. This option requires barely no investment for HWS, the estimated NPV is of 2.103.989€. Yet, the risk of being substituted is significant and there is no major perspective of growth. The second, HWS delivers alone a full solution on the French market. This option has for the bestcase scenario an NPV of 4.542.096€. However, HWS is taking a big risk by not having any experience of delivering a full solution and would still have a small product range to offer. The third, joint venture with HWS and SDS to sell together a full solution on the French market. This option has an NPV of 7.071.970€. It is ideal for Hamon to partner with SDS in order to become the market leader in France and differentiate themselves from competition by selling a full solution with a broad product range. The two scenarios for CrossPack 22 and GEOclean include first, HWS that remains a component manufacturer and try to find partnerships with companies that would enable HWS to sell more volumes in France. The second scenario is the same as the first one, except that engineers are hired so that HWS can constitute its own integrated design office. Therefore, HWS would be able to design any type of WWTP in France or abroad. To conclude, the executive committee of Hamon has to decide whether or not, to get involved in a joint venture with SDS, as it is the option with the most growth potential and the least investment. We believe that is the best option for HWS to have sustainable growth on the French market.OF