For companies whose effectiveness is suffering from the complexity of their business, we help define the boundaries for better focusing among their:
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| Narrow Your Focus: Streamlining the Product Offering For this heavy equipment manufacturer, we targeted two of their twelve business lines for exit so as to simplify their manufacturing processes and to streamline their channel relationships. The Situation: In an industry driven by economic cycles, our client was having difficulty exploiting the recent positive environmental trends to consistently strengthen its market position. Our Approach: We profiled each of the client’s twelve businesses to understand three things: where they held a product performance advantage vs. the competition, what were the end-user priorities for each product, and what were the channel’s priorities. This enabled to us to highlight those businesses where our client was not well-positioned to provide the type of value the marketplace demanded. The Deliverable: We recommended steps to optimize performance within and across the various product lines. For two of the businesses, we recommended sale for three reasons: users cared more about price than they did about our client’s technological superiority, the channel was unequal to the level of technical selling required, and the manufacturing shared little overhead cost with the rest of the business. For several other businesses we highlighted small but important gaps in their offering which limited the channel’s ability to market our client’s full line. The Result: The client sold one of the businesses, and merged the second one into another unit. The cash from the sale funded several smaller acquisitions, filling in their product line. With a product line thus more in tune with marketplace requirements, our client both improved its cost position and took fuller revenue advantage of the improving economic conditions. |
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