Double-digit growth in a stable FMCG market
In a generally stagnant market, emerging consumer trends were opening up opportunities. The CEO, together with the management team, wanted to clarify how to take advantage of these trends. A category growth plan enabled reaching double-digit growth in key market segments.
Changes to consumer preferences called for a plan to capture value from them
The consumer goods world is constantly being shaped by trends such as an increased focus on health and wellness, sustainability and ethical considerations. These trends provided an opportunity for the company, a large consumer goods manufacturer, to grow in new directions or even reposition itself in the minds of consumers. However, the CEO, together with the management team, lacked a clear view of how to make it happen.
Being a forerunner may mean having to cannibalize your own products
In deep collaboration with our client, we analyzed what kind of effects the trends would have on the market, and noticed that the company was best positioned to take a forerunner role in its field – even at the expense of cannibalizing part of the company’s existing business. To capitalize on the opportunity, the team outlined the source of competitive advantage for the company, defined which consumer segments to target, set guidelines for product development marketing and communications, and determined what is needed from the raw material sourcing and the production network to keep up with the expected growth.
Double-digit growth and improved overall company image
The project helped the company align its efforts to support growth. The market has grown at double-digit rates, but the company, supported by solid growth platform, has grown twice as fast.
Lift-off for a new strategy
After several years of steady growth in the aviation industry, the company wanted to secure its long-term position as a leading player. However, the competition was tightening and the relative calm of the past years could be followed by a precipitous decline. Steps would need to be taken to protect the company’s future.
The home market was stagnating but markets abroad were showing huge potential
The company had enjoyed several years of growth driven by increased airline traffic in the home market. Even though the business had been thriving in recent years, the future outlook of the home market did not seem promising and opportunities abroad were being squeezed by ever tightening competition. In addition, the company had ventures that lacked clear strategic intent. The Board of Directors and the new CEO needed to secure revenue at home and solidify their position abroad.
A clearly defined growth strategy could secure the company’s future
The joint Client-August team began the strategy work by looking at the attractiveness of a long list of potential growth directions while conducting a baseline analysis of the company’s current operations. As a result, the team identified drivers that would not only secure the future of the company’s current operations, but also enable the development of completely new revenue streams.
A shared ambition elicited difficult, but necessary choices
The company moved from an incoherent list of growth opportunities to a clearly defined set of strategic initiatives. Most importantly, the board and the management team were forced to make clear-cut strategic choices. This opened a path for a fresh competitive positioning for the company. The clarity and decisiveness of the strategic choices was able to align the rest of the organization around key long-term objectives.
Business portfolio sustainability revealed
New CEO wanted to better understand value creation potential of company’s businesses. In-depth analyses that addressed market attractiveness and competitive situation were conducted for each business to brighten the picture and provide a solid basis for decisions. Outcome was a clarified role for each business, enabling management to set targets and allocate resources in a way that maximizes company value.
New CEO wanted to better understand the value creation potential of company’s businesses
A shared understanding of future focus areas across the company was missing, even though various business specific studies had been conducted. While the company had gathered massive amounts of internal and market data, there was no coherent overall picture of the sustainability of value creation covering all business units. The CEO decided to launch a project to assess the value creation sustainability and to define the future roles for businesses.
Portfolio analyses that addressed market attractiveness and competitive situation were conducted to brighten the picture
As a first step, together with management, August built a solid fact-base. Businesses were evaluated based on the market attractiveness of their market and competitiveness against their peers. Utilizing the fact base for in-depth discussions among group and business management, a common view of the roles for the businesses was created. A key success factor was the close collaboration between business units and the project team. People with extensive business understanding helped the project team to make insightful conclusions based on the analyses.
Clarified role and targets for each business that maximizes company value
High level value creation agenda was crystallized as financial targets for the businesses and capital allocation guidelines for the group were defined. Following the work, management of each business knew very well what truly was expected from them, which helped them to create their own strategies in way which maximizes company value.
Back to black in six months
A machinery manufacturer had lost its way, as rising complexity had begun to take a toll on its customer relationships and its performance. The new CEO could see he had to make some hard choices fast. Six months after he began working with August, he had the company back on track, and exceeding its short-term targets in revenues and profits. Even more importantly, the company was better positioned to build a sustainable and profitable business founded on its core strengths and focus markets.
The new CEO needed to turn the company back to profitable growth
The company, a subcontractor to major machinery OEMs, was suffering from a long stretch of poor performance. When the new CEO assessed the situation, he realized that stagnating sales and deteriorating profits were largely due to an unclear business focus. The company had spread its efforts to a large number of markets and customers, but had simultaneously created unmanageable complexity in its operations. A fast turnaround was clearly needed, and the CEO, together with the Board, decided to launch a strategy revision project, with the objective of clarifying the company’s focus and putting it back on a profitable growth track.
A new strategy with clear choices put the customer at its center
The joint Client-August team started the strategy work by looking at the attractiveness of different markets and in parallel doing an honest self-evaluation regarding what the company is truly good at. The team made clear strategic choices on focus markets and segments, which allowed truly putting the customer at the center of the strategy. This had direct implications to the way the company worked. For example, we revised the management model and organization set-up to be better aligned with the new strategy. The roles of the production units were also realigned to match the key product and service needs of the focus customers. The clarified structure helped revive the company’s can-do spirit after years of lackluster performance.
Back to black in six months
It did not take long for the new direction to start generating impact. Already after 6 months the company was back to black with a result that clearly exceeded the short-term targets both in revenues and profits. Even more importantly, the company was much better positioned to build sustainable and profitable business in its core markets, together with its chosen focus customers.
CLIENT CEO TESTIMONIAL:
“What really left a positive memory trace in our organization was August’s consulting approach. Myself and my colleagues find August consultants as a hardworking team that sets the bar high in what they do, but at the same time they are very easy to work with. Their team showcased true interest in our company and willingness to help us to get better.”