Page 2: Setting strategy
Strategies are the long-term plans that a business puts in place to achieve its aims and objectives. IMI’s goal is to achieve market leadership in the global niche markets it serves. A niche market is a relatively small and often highly specialised segment of a market, which has few competing companies supplying it.
There are many different strategies an organisation can choose to achieve its goals. For example, these might include developing new products, growing by acquiring other companies or reducing costs. IMI’s strategy focuses on:
- increasing business in its chosen niche markets
- accelerating growth by investing in new products and emerging markets
- maintaining high operating margins and reducing costs of manufacturing and costs within its supply chain.
Few competitors can provide the specialist knowledge and tailored fluid engineering solutions IMI offers, so it is able to command higher margins for its high quality products and services in its chosen niche markets.
The IMI 'sweetspot'
IMI’s strategy brings together three key aspects:
- its engineering skills in fluid technology and innovation
- its market leading positions in its chosen niche markets
- its exposure to markets which are benefitting from long term structural growth trends such as climate change and urbanisation.
IMI calls the point of overlap between these three factors, the ‘sweetspot’. Where these three areas come together is known as strategic convergence. It is an area where IMI expects to achieve clear market leadership, higher profit margins, greater product differentiation, opportunities to meet global trends and to grow. Over half of IMI’s operations are positioned within the strategic ‘sweetspot’ today, with plans to increase this to over 70% over the next five years.