Securitas AB Annual Report 2005

The Group – Strategy and organization
Strategies and business model
for profi table growth
Securitas’ success is based on being a driving force in the development of the
security industry. The strategic foundation is therefore to focus entirely on
security using a learning organization that continuously develops specialized,
value-enhancing services for a growing number of segmented markets.
Main strategy:
Focus on security for profi table growth
Providing the customer with the right service creates
growth. Effi ciency in the organization drives profi tability.
Focus among employees builds knowledge. Growth,
profi tability and knowledge create resources for further
development of solutions for customers, while providing
stimulation for employees and increasing value for
shareholders.
The main strategy, and thus the foundation of Securitas’
business model, is therefore to focus on security.
This is achieved by constantly building our understanding
and knowledge of various customer groups’ needs
and specialized requirements and by designing new
services and solutions.
Our success is measured by customers based on their
interactions with our employees. In fi nancial terms,
we want that success to lead to:
■ Growth exceeding the market average
■ Positive trend in the operating margin
■ 20 percent return on capital employed in existing
operations with an aim of reaching this objective
within three years for acquired businesses.
The market is growing as society becomes more complex
and demands new, reliable and tailor-made security solutions.
By satisfying new and more complex needs, we
open new markets, gain market shares and thereby grow
faster than the underlying market. The ability of our organization
to develop effi cient, valuable services and solutions
for customers determines how far we stay ahead.
Sub-strategies:
Specialization and customer segmentation
The main sub-strategy to utilize and boost the potential
in underlying organic growth is to constantly refi ne our
customer offering through increasingly specialized services.
By raising value added, Securitas creates customized,
competitive offerings that help buyers to realize it
can be profi table to add specialized security services and
to outsource their security work. In the process, demand
is segmented and grows in volume. These refi nements
provide customers with greater value for the money they
spend on security, while giving Securitas the opportunity
to improve its pricing structure and increase margins.
Decentralized organization
As an important sub-strategy, Securitas is developing a
decentralized organization with an emphasis on its more
than 3,000 branches, where concrete value is created in
day-to-day interactions with customers. The strong position
of the branches is motivated by Securitas’ decentralization
philosophy. Customer benefi t is best created by
placing decision-making authority close to the customer
and employees. Demanding customers have the right to
deal with competent, independent and strong local managers.
Branches are driven by qualifi ed managers with
the responsibility to develop and drive operations on the
basis of their own profi t and loss statements. This fosters
entrepreneurship as part of the Securitas culture.
Shared culture, governance,
controls and incentives
Securitas has a strong corporate culture that creates the
shared values of responsibility, ownership and entrepreneurship.
This culture is built in large part with the
so-called Securitas Model, which serves as the basis for
how all Group employees work and are organized in
order to develop and create profi table growth. Every part
of the model is applied by managers at every level, who
thereby become the Group’s central culture bearers. This
has proven successful in all of the Group’s operations
and wherever Securitas works. Among the key elements
in our culture are continuous performance measurement
and follow-up and clearly designed incentive structures
that make employees personally committed to Securitas’
fi nancial development.
Market leadership
One sub-strategy is to seek market leadership in attractive
markets with good prospects for long-term profi tability.
In this case, Securitas plays the role of transformer
in the market in terms of both the structure and quality
of service development, professionalism and confi dence.
Market leadership requires size in order to infl uence
the local society’s laws, rules, norms and wages for
employees in the security industry and, not least of all,
18 SECURITAS 2005