Page 2: Business strategy
Like many flourishing businesses, Sodexho has a clear growth strategy. Currently, this is based on organic growth: growth from within the business, rather than through external acquisition of other companies. Strategies are most likely to be successful when they are tied to clear objectives. Sodexho has set itself precise financial objectives for a five year period. These are:
- growth in sales of 10% per year
- growth in operating profit of 15% per year.
The company recognises that these are tough targets to set for itself. The main platform for delivering this internal growth involves growing the other services currently offered by Sodexho. This means persuading customers to whom Sodexho currently provides catering contracts to also take out contracts with Sodexho for other aspects of their business eg the cleaning and maintenance of premises. Clearly, this type of growth depends heavily on Sodexho delivering a first class service on its existing contract with each customer. This in turn depends on, among other factors:
- instilling within employees not only broad based expertise but also loyalty, pride and commitment
- passing on to customers the advantages that come from the scale of Sodexho’s operations.
The driving vision behind Sodexho’s strategy is to improve the quality of the daily lives of the employees, clients and customers of the organisations that Sodexho supports and services. In practical terms this means, for example:
- continually improving the catering service provided
- providing discounts to any clients’ employees who wish to join fitness and health clubs
- helping clients’ employees to obtain bigger discounts on their shopping
- providing chauffeur services to companies.
It means finding out from clients and customers what more Sodexho can do for them.
Because of the scale on which Sodexho operates, it is able to gain bulk purchasing advantages that it can pass on to companies and their employees. Another key element of Sodexho’s commercial strategy is to retain a higher proportion of its existing contracts when they are due for renewal. In the face of tough competition, this is no easy task. It is best achieved by developing strong working relationships with clients based on a detailed understanding of the clients’ needs and requirements. Whilst some clients will opt for the cheapest price when the time comes to renew a service contract, others will place great importance on a continuing high quality of service.