Strategy for a Medium-Sized Enterprise (turnover of €2 bn)
The enterprise wanted to become the market leader or rank second in its core business areas, with the aim of realising a sustainable, superior profitability. All business areas not able to meet this objective were to be divested.
A corresponding business strategy (including a plan of implementation) had to be developed.
In internal workshops and supplementary analyses, the strategic potential of each business area was evaluated according to a three-step process:
- 1. Determination of the current strategic positioning within the market.
- 2. Definition of the measures necessary to obtain market leadership.
- 3. Cost-benefit analysis (net present value analysis) to achieve market leadership.
Afterwards, the business area with the best cost-benefit relationship was chosen as the future core business and as the nucleus of an aggressive buy-and-build strategy. All other business areas were to be divested. The released liquidity was to be used for acquisitions in the context of the buy-and-build strategy.
Prior to implementation, this approach was tested in a scenario analysis.
A detailed plan of action was developed for the entire value chain: it comprised acquisitions, innovation-related approaches, an HR development plan, sales/marketing and operations, and sales excellence projects. The implementation was supervised, and measures were adjusted to evolving market developments.