Working together with Capful, Patria realised a group strategy project utilising external and internal analyses and the strategic alternatives approach to determine the targets and methods for its growth strategy.
Esa Rautalinko took over as Patria Group’s managing director in summer 2019. During the course of the autumn, it became apparent to him that a group strategy project was required. While the strategy processes and strategies for business functions worked efficiently, discussions with key personnel repeatedly highlighted the need for the closer definition of group-level targets and strategy.
In meetings with Capful, Patria’s management discussed how the company’s strategy should be developed and what approach should be adopted in this development. Where is the company headed? What markets should the company operate in and what kind of business portfolio would guarantee growth in those markets? What new resources and competencies were required for growth? It was time to gain a helicopter view of the situation and to find a shared strategic direction for various business functions.
The joint project between Patria and Capful was realised over a period of six months. The work was kicked off with data collection and strategic analyses related to the group strategy. Background information was compiled via questionnaires sent to 88 key members of staff, and 17 virtual and face-to-face meetings with different participants were arranged.
Patria operates in a challenging international environment. To start with, a shared view of the development of the operating environment was formed. In the future, the operating environment analysis will also help the company monitor changes in the markets and review other background information related to the strategy. The most significant internal analyses were various portfolio and competency analyses, which were performed with a view to seeking synergies between business functions and assessing competencies that created a competitive advantage across the group.
It was decided early on in the process that the mission and strategic targets were the central elements of Patria’s strategy. The special role Patria holds in Finnish society is inevitably reflected in the company’s purpose and operating principles. It was not enough to consider what had to be done and how; when defining its mission, the company had to pay special attention to providing an answer to the question why. Growth is essential to Patria in order to ensure its role as a strong operator in the international defence industry. Therefore, growth was the centre of focus during the process. What would the level of ambition be with regard to growth?
Once the analytical data had been gathered, work to determine Patria’s alternatives related to growth could begin. The dimensions of growth related to markets and internal drivers of growth were identified, and alternatives related to these areas were determined. Creating feasible growth alternatives was important because they offered a basis for strategy discussions on the growth targets. How much growth would each alternative generate? What are the targets? What does the company believe in? Fruitful and organised discussion took place on various forums, with the alternatives assessed systematically from different perspectives. On the basis of these assessments, the main outlines for the group’s growth strategy were defined.
The results achieved
As a result of the project, Patria gained a group-level strategy, which contains the company’s shared strategic goals and selected strategic themes that serve as a tool for achieving the set goals. The strategy emphasised growth built on the comprehensive utilisation of the group’s competencies and new collaboration between business functions.
“Our strategy work with Capful focused on the big picture. Patria is a technology supplier that strives to grow internationally, and the strategy project demonstrated that we can utilise business functions that support one another and the group’s shared competencies even more efficiently to boost our growth. Capful’s approach was analytical and participatory and it made good use of strategic alternatives. It was easy to build a shared understanding on the basis of the concrete alternatives and far-ranging discussions on the strategy” says the Managing Director Esa Rautalinko, Patria Group
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