Spring 2009 issue of Horizons

Raise Your Expectations CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS

which allowed for significant increases in the efficiency of production. As additional improvements in manufacturing techniques and automation came into play, the industry transformed again. Strategies evolved, shifting the focus to efficiency in product design and delivery; it was no longer getting the same car out fast but getting multiple, uniquely designed vehicles to fit a broad spectrum of buyers at various price points. The companies who led the market were those who could produce the highest quality, most appealing vehicles at the right price. The next shift occurred when the industry realized that it could leverage the automobile for other revenue streams. The emphasis increased on the services around the automobile, and the car companies were making more money on the financing and servicing of the automobiles than the sales of the cars themselves. Strategies started shifting again toward what other additional services could be created around the automobile. Some of the companies started building business models of selling a version of a car and allowing for fee-based features to be added on demand. If additional options were desired after the sale, simply tell the car and a monthly fee is charged. Services like OnStar ® , subscription radio, subscription GPS systems, etc., are some examples of these services that are available today. Future strategies are now evolving around high levels of efficiency (high MPG), safety (lane departure detection, variable speed control, self-driven cars) and environmental concerns (alternative fuels). The companies in this industry that have been able to survive are those companies that have developed the strategic ability to adapt, manage and in many cases create the catalyst for strategic transformation. With the current state of the auto industry, the ability to strategically adapt will be the key factor in determining the fate of many companies, even those that previously were viewed as leaders in the industry. As you will read in this issue of Horizons, Sam Toumayan speaks about his company, Meridian Enterprises, and how it has adapted over its 30-year history to achieve success. Having worked with Sam and his company for more than 20 years, I have witnessed firsthand how Meridian has been able to transform its company. Meridian has learned as an organization to strategically position itself to adapt to the ever-changing market conditions

and leverage the core strength of its company, which is primarily the knowledge it possesses on how to help customers market and sell their products or services. Meridian has accomplished this success through a series of strategic decisions that have occurred over the past 20+ years that have resulted in changes to the structure of the organization, innovations in various business processes, and the creation of state-of-the-art computer systems containing much of the intellectual capital that has been gained since the company started in 1978. As these systems were developed, they were designed to continually evolve themselves as additional knowledge is gained. This knowledge has allowed Meridian to effectively and efficiently add capabilities that were not envisioned or possible when the systems were first created. The powerful combination of the organizational, process and system agility that is part of the Meridian strategy has allowed Meridian to enter into areas of business that it never had considered possible prior to having the capabilities it now has. What makes Meridian successful is not individual structures, processes, systems or knowledge but the organization’s ability to recognize potential catalysts and leverage all parts of the organization to strategically adapt and transform to maximize these opportunities to their advantage. In the general business and economic climate, we will always experience multiple catalysts that will disrupt strategies and plans that have been produced. In the example of both Meridian Enterprises and the automotive industry as a whole, a common theme exists in the long-term success that each has been able to achieve, which is their ability to strategically adapt and transform. Companies that have the ability to deal with the unknown and include it as part of the strategic planning process will be positioned to address issues strategically, minimizing the need to be reactive as they occur.

Questions? Contact:

Dan Raskas Partner

Corporate Finance and Forensic Services Group 314.678.3530 dan.raskas@rubinbrown.com

u spring 2009 issue

12