Case Study on Strategy

Situation:

Our client's world is in a state of upheaval... As a production site with a broad variety of products, the location has a long and successful history. So far, managers have been focused on production and, in particular, on planning and optimizing their own areas of responsibility.
 
Contact with the rest of the group, as well as to customers, is quite rare, since sales were conducted at other locations.
 
Many products are at the end of their life cycle, resulting in declining demand.
At the same time, pricing pressure is growing as competition is increasingly outsourcing their manufacturing to low cost countries (LCC). The sales department must offer discounts in order to stay in business.
 
The production sites within the group are regularly compared to each other. Results of this competition are the essential decision criterion for the award of new projects and product lines.

Challenge:

• Site management needs a common understanding of the current situation and the near future.
• The management team must work together to develop and agree upon a plan of action to save the site.
• Clear and consistent communication is essential to ensure the resulting changes are clear and to create broad acceptance for the project.

1. The decline in production and falling prices must be counteracted in the short term by measures affecting EBIT, so that the contribution to earnings is not jeopardized.
2. The site is being reorganized, which includes a gradual reduction of the number of operating units in line with the respective market situation.
3. Innovation will be a major topic in order to develop "future products" at the site, and in the medium term, someone must actively work on ensuring that the site is considered future-proof for the group and that new production orders are received.