Background and Challenge

L.E.K.’s client acquired two leading hair transplant companies separately within the past decade to expand its presence in the U.S. hair loss solutions market. However, the client elected not to consolidate the companies despite the potential for significant synergies, as it appeared that each hair transplant brand served a different segment of the market. Healthy profits by each business also trumped concerns that the two companies may be targeting the same customers and cannibalizing sales from each other. 

The economic recession caused a downturn in the volume of hair transplant and reduced profitability at both companies.  These new market realities required the client to re-evaluate its portfolio, and it selected L.E.K. Consulting to develop a market and operational strategy to capture more value from its hair transplant businesses. L.E.K. led a working group of executives from both hair transplant companies and the client through an extensive analysis of the market and evaluated several strategic options to arrive at a clear path forward that would maximize the value of the client’s hair transplant assets.

Approach and Recommendations

The L.E.K. team conducted extensive customer research that included focus groups, 100 phone interviews, and a survey of 2,200 hair transplant patients to understand their decision criteria, the positioning of each hair transplant brand, and which customer clusters were attracted to each brand. In addition to enhance customer insight, the research and analysis also provided a robust fact base from which the team could test and validate multiple strategic options for going to market with a stronger brand and with a cost structure that significantly enhanced the profitability of the combined companies.

Strategy development and implementation planning was complicated by the different stakeholders in the process and their varying priorities. Backed by extensive financial modeling and strategic analysis, however, L.E.K. demonstrated clearly that merging the two brands and rationalizing the delivery network provided the highest value. L.E.K. then developed the implementation plan to reshape the two companies into one larger company, which allowed the project to maintain its momentum and the client to capture the benefits.


Combining the two companies eliminated overlapping costs and achieved new economies of scale. L.E.K. also worked closely with senior executives from both companies to develop a new and efficient organizational structure, and to identify top talent for retention.

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