For many busy business professionals, it’s easy to get absorbed in the day to day: How to get from point A to point B and keep things afloat. That’s something that Marc Palker, CMA, CSCA, has seen a lot of during his many years as a consultant. Palker, a former IMA® (Institute of Management Accountants) Global Board Chair, has been the CFO of several companies over the course of his career and served as a managing director of CFO Consulting Partners. Currently, he owns MPP Associates, Inc., a Long Island, N.Y.-based accounting and finance consulting firm, where he primarily works with small and medium-sized companies worldwide, many of them in the manufacturing and distribution sectors.  

“Many of my clients don’t have the time to think about the bigger picture – and even if they do, it’s not been in a systematic or accountable way,” he explains. “So, they engage me to help take them through the process of identifying issues, developing a plan, and then executing that plan.”

Those are precisely the skills assessed by IMA’s CSCA® (Certified in Strategy and Competitive Analysis) specialty credential. The credential focuses on specific skills such as achieving and sustaining competitive advantage, managing risk, analyzing strategic alternatives, expanding into new markets, organizational performance, change management, and much more. 

A Clearer Picture

One challenge that crops up frequently for Palker’s clients is how to successfully use market segmentation to increase profitability.

Recalls Palker, “During my first meeting with a distribution company client, I realized the owner didn’t fully understand the different segments in which they were operating. So, our first few meetings were spent dividing the business into the following segments: ordinary distribution products, machinery, repairs, and education classes. That gave us a clearer picture of what segments required greater focus and which less so.”
Using his strategic analysis skills, Palker was able to determine that while machinery and repairs were the least profitable segments, they were also necessary to maintain certain customers. Further analysis revealed that the strength of the business was its exclusive distribution contracts on ordinary products. As it turned out, education classes also were very profitable. 

Based on this understanding, Palker was able to work with the client to develop a plan to expand the educational offerings and increase the frequency of the classes. “The client now holds classes six times a year; he makes a nice profit from running them and he also gets a lot of business from people who attend the class,” he explains.

New Market Strategy

Other clients Palker has worked with have had to decide how to drive market expansion.

Palker recalls meeting with such a client, where he analyzed sales methods and installed a reporting mechanism for all sales personnel, which was reviewed weekly. After two months of accumulating statistics, Palker was able to implement a new market strategy based on product type and customer classification. Search engine optimization (SEO) programs were employed, the website was enhanced, and the promotion strategy was tweaked by offering selected discounts for slower-moving products.

“The result has been a 25% increase in sales and corresponding increase in gross margin,” he says.

Many of these decisions are part of strategic planning, and that requires an organization to assess their appetite for risk. “Unfortunately,” Palker says, “if you’re too risk averse, you lose opportunities, so you’ve got to carefully weigh your options.” To assist in these situations, Palker often relies on SWOT analysis, a framework covered in the CSCA body of knowledge that helps an organization assess its strengths, weaknesses, risks, and opportunities, to evaluate internal and external factors.

Efficiency Through Technology

About a year and a half ago, for example, a client with a family-owned business came to Palker with a problem: He didn’t see growth in his company. He wanted to build his business profitably so that he could retire, but he didn’t know how to do it. 

In this situation, Palker took a very hands-on approach. Although the company had multiple operations, it wasn’t using technology to appropriately gather data and evaluate its businesses. Recalls Palker, “I analyzed all processes within the family office and recommended software to allow the staff to spend less time on data gathering. Based on my recommendation, the company installed two software packages, one housed on their server and the other in the cloud.” Following installation, Palker also helped lead the setup and training, so that the feedback provided could be used to develop the strategic plan. This resulted in efficiencies that increased profitability and allowed the owner to accomplish the planned expansion. 

And even better? The owner is now working fewer hours, has set up a succession plan for his children, and is successfully executing his growth strategy. 

For more information on the CSCA, please visit this link.