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Medium Growth Strategy M&A

Plaque to the Future

#Healthcare #Dental Services
ProHub Comment

This case requires candidates to analyze market dynamics, calculate profitability impacts, and evaluate M&A opportunities. The progression from organic growth assessment to M&A evaluation tests both quantitative analysis and strategic thinking. Success depends on recognizing that Bright Smile's orthodontic business is underperforming industry averages and identifying acquisition targets that can close the profitability gap.

Estimated Time 15 minutes
Difficulty Medium
Source Duke
50 / 100
Your client is the CEO of Bright Smile, Inc., a family-owned regional dental services organization (DSO), with annual revenue of $20M. Bright Smile has 40 dentist offices and provides a variety of services – annual cleanings, crowns, bridges, and limited orthodontic treatment. Over the last three years, growth has stalled and competition has stolen market share. Our client has asked us to determine a growth strategy to make them the leading “full-service” dental organization

Clarifying Information

  1. “Full service” → offering checkups, filling, implants, bridges, crowns, cosmetic dentistry, including orthodontic treatment (such as Invisalign) and teeth whitening
  2. Bright Smile offices are located in southeastern United States
  3. Historically, Bright Smile has focused only on organic growth, building new offices
  4. Revenue Mix: 25% hygiene (cleanings), 55% restorative work (crowns/bridges), 20% orthodontia
  5. Market: Orthodontic treatment growing at 30% Y/Y in U.S., general dentistry flat Y/Y
  6. Bright Smile’s board of directors does not want to build any new offices
  7. No current information on current profitability
  8. Goals: Primary: Grow profit 2X in 3 years