Case Interview Question #00226: The client Ryder System, Inc. or Ryder (NYSE: R), is an American-based Fortune 500 provider of leading edge transportation, logistics and supply chain management solutions worldwide. Headquartered in suburban Miami, Florida, Ryder’s global operation has total revenue of more than $6.5 billion in 2007.
Ryder’s product offerings include: LM, which provides leasing and programmed maintenance of trucks, tractors and trailers to commercial customers; SC, which manages the movement of materials and related information from the acquisition of raw materials to the delivery of finished products to end-users; and DCC, which provides a turn-key transportation service that includes vehicles, drivers, routing and scheduling. The focus of this case is on the Leasing & Maintenance (LM) group.
The growth in the overall number of truck registrations has slowed, 2.2% CAGR (Compound Annual Growth Rate). The LM market is declining. However, the client’s revenues within the LM market have been flat. The client has asked your help to put together a growth strategy. More specifically, Ryder is looking at achieving significant growth over the next 2 years and is looking for some major improvements.
Note: This case is a classic growth strategy case which involves penetrating a new segment by offering new products. The candidate will be tested on his thoughts for achieving organic growth and on some light quantitative analysis.
Question #1: In general, what are the different ways to achieve organic growth?