Strategy Execution Life Cycle – All six phases of Guberno’s strategy execution lifecycle
Background context – The core business opportunity identified is that less than 10% of alcoholic spirits in Australia are produced domestically. This compares to 70% of wine and 80% for beer. Existing Australian spirit companies tend to be smaller scale craft producers delivering higher priced products into the premium and super premium segments of the alcoholic spirits market. The core objective of the startup company was to create a portfolio of new Australian spirit brands (in multiple spirit categories) with Australian manufactured products that can compete at scale in a market environment that is dominated by a few large multinational spirit companies.
Strategic Challenge –The strategic challenge was to create new alcoholic spirit brands, create a scalable distillation and production packaging capability, establish access to markets despite highly consolidated retail channels, activate consumers around the brands, and scale the business both in-market and with internally capability. The business is part way along this business building journey having already attracting $40m to invest in scalable upstream distillation and packaging capability. Seeking further capital to scale its initial brand into new domestic and international channels and to bring to market two new alcoholic spirit brands in two different market segments was the key focus of a further capital raise through the ASX listing process.
Strategic Activities – Guberno provided strategic and project management support across a range of workstreams leading up to and through the successful IPO capital raise process. Key activity workstreams included;
- Strategy development – Guberno facilitated development of a Group strategy and in doing so clarify its vision, purpose and ambition, key target markets, preferred products and positioning, competitive environment, and the required internal capability platform to deliver against its ambition. The Group strategy provided the required context for the creation of category strategies for brands within the portfolio.
- Project management of key activity workstreams – Guberno facilitated a series of project teams to deliver key outcomes required to deliver successful IPO and listing. This included; delivering upscaling supply chain capability to deliver against a national distribution agreement which would rapidly accelerate the market penetration of a brand, and preparation work to launch a new brand into the market.
- Financial modelling – Guberno, with its strategic modelling partner, Forecast forecast.com.au, completed full integrated modelling of the business to enable quantification of key strategic choices and decisions. The modelling formed the foundation of prospectus financial forecasts and for longer range business planning.
- Commercial transaction – Guberno led negotiations of a major commercial transaction with a venture partners with global reach that could assist in accelerating the growth of the business. This involved interacting with a range of legal and tax advisors to structure and negotiate shareholding, operating and licensing agreements.
- IPO project management – Guberno worked with a range of broking, legal, and tax advisors to support the IPO and listing process. This included development of investor pitch decks, preparing management presentations and key parts of the Prospectus.
Outcomes – The business was successful in raising $47m ($35m primary) and securing listing on the ASX in December 2020. Guberno played a central role in bringing structured strategic thinking and disciplined execution management to deliver the key business objective of raising funds to support the next phase of business growth. Guberno maintains an ongoing strategic advisory role with the company to support it through the next phase of growth.
Key Learnings – Startups are rarely short of ideas but almost always short on resources – both human and financial. Creating clarity of purpose to drive prioritisation is a key success factor in balancing constraints and successfully growing a business. The opportunity lies in identifying the critical few things that have high leverage on business outcomes and executing them well. Guberno worked closely with the start-up team to identify the high leverage activities and provided the necessary project management disciplines to assist the management team to execute them efficiently.