Restructuring of the European Operations of a Large Enterprise
For many years, the client’s Western European earnings were below profitability targets. In addition, continuous market decline foiled management’s restructuring efforts. The goal was to return the company to its profitability objectives.
The operational objective derived from the business strategy was cost leadership with a defined profit margin.
In cooperation with country CEOs, the prospective midterm profitability gap of the business was projected, considering market decline and cost inflation. Subsequently, measures to close the profitability gap were generated in a workshop series along the value chain.
The defined measures included the following:
- Plant closures
- New logistics concepts
- Product-line optimisations
- Merger and optimisation of all administrative and internal sales units
- Acquisitions to consolidate product/service portfolio and the market presence
- Differentiated pricing measures
- Targeted marketing based on customer/product segments
- New external sales organisation
The early inclusion of the regional CEOs ensured a high willingness to change and a high likelihood of a smooth implementation.
Implementation and actual market development were followed up by creating an integrated financial planning and control model. Thus, prompt reactions to unexpected market developments and implementation issues were facilitated. The defined profitability goal was met.
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