Intelligent Leisure Solutions (ils)

What is happening in the case?

Intelligent Leisure Solutions (ILS) is a group of five companies, founded by Robert Phillips, whose core competency is Internet, Innovation and Technology applied to several sectors - Consulting, Tourism Development, Travel and Real Estate. The five companies that constitute the ILS group are: ILSC, ITS, IWS, ICS, and IRES. After the global recession in 2008, Brazil's economy is now the eighth largest in the world. For the first time in Brazil's history 50% of its citizens (94 million) belong to the middle class. 33.2% of Brazil's population is in its twenties and thirties, and this technology savvy segment is expected to grow by 15.9% over the next 10 years. Furthermore, the number of households in the US$45,000, and US$75,000 income bracket, will increase by 103.7%, and 106.6%, respectively, by 2020. Finally leisure and recreation spending is expected to grow by 65% by 2020. All of these factors, coupled with the looming 2014 World Cup and 2016 Olympics, which are expected to bring an increase in public-private partnership, have motivated Robert Phillips to search for the most appropriate, innovative growth strategies for expansion and sustainability of each company in the ILS group.

Why is it happening?

To understand why the concern, and the need for Robert Phillips to find new growth strategy, a closer look of each industry is needed.

* Marketing Consulting Industry: This market has experienced a steady growth, with the expectation that it will reach US$161.2 billion by 2014, with the United States representing 39.3% of the global market value. Reputation for cost-effectiveness and excellent track record are keys to success in this market.

* Internet Marketing Industry: The North American search engine marketing industry grew from $13.5 billion in 2008 to $14.6 billion in 2009. The number of global Internet users increased by 13% from 2008 to 1.8 billion in 2009. There were 76 million users in Brazil, a 17% increase, indicating a 39% penetration rate per 100 inhabitants, compared to the 76% in the United States.

* Global Real Estate Management and Development industry: The size of this industry is $461 billion, with a forecasted increase to $511 billion by 2014. The leading companies in this industry are in Europe and the U.S. accounting for 36.3% and 33.7% respectively. Furthermore, the industry is highly fragmented, name recognition, types of services or property offered, are all important key success factors.

* Global IT Consulting Industry: The industry is forecasted to grow to $561.5 billion by 2014, from $498.2 billion in 2009. A total of 49.5% of the market's value is the sales of integration and development services. Key success factor in this industry is brand recognition, and competition is intense given that the key companies, that account for 13.8% of the industry sales, continue to grow and have focused on diversification to lessen the degree of competition.

* Global Internet software and Service Industry: The size of this industry is $893.7 billion, with a forecasted increase by 75.4% to $1,567.7 billion by 2014. Entry in this industry is dependent upon high levels of technical expertise, and R&D investments. Nonetheless, intellectual property is a strong barrier, as are the cost to comply with regulations such as the Digital Millennium Copyright Act.

What should be done?

* Major website update for all 5 companies in the ILSC group and implementation of new technology: Many of the companies' websites, some more than 8 years old, have not been redone. With the new technology and the increasing amount of Internet users world wide (1.8 billion in 2009), it is important to stay up-to-date with the latest trends and Internet technology, especially with the 15.9% increase of Brazil's technology savvy population.

* Increasing brand awareness and diversification of product: A portfolio of success stories needs to be created, in order to achieve international recognition and awards (such as the Awards and Honors won by ILS from 2008 to 2010, rewarded for being a "World Leading Travel Management Company"). Furthermore, it is necessary to broaden the range of products (such as documentary and film dubbing or subtitling), in order to respond to the globalization of the world.

* Selection of competent and visionary managers: Robert Phillips needs to find qualified managers, for each of his 5 companies, sharing his clear vision and who will take charge and grow the businesses in a symbiotic way, in order to maintain the spillover effect between the companies, thus capitalizing on shared knowledge.

* Solidifying relationships with international companies: Given the 2014 Brazil World Cup, and the 2016 Summer Olympics, both events being of enormous international proportions, ILS needs to solidify its relationship with international companies, more specifically the Americas and Europe (representing the major player in most industries, accounting for, on average, 39% to 49.5%)

Why