Background and Challenge
A major Australian cement company was concerned with its diminishing market share of packaged cement in traditional channels, downward pressure on pricing from big box resellers, and the threat of imports to the packaged cement industry in Australia.
Approach and Recommendations
L.E.K. Consulting worked with the client to develop a differentiating strategy based on pricing levels, product range and service offering. This was built on:
- A detailed analysis of the Australian packaged cement market size, channels and structures by state
- A review of the threat of imports to the Australian packaged cement industry, based on retailer needs and the nature of this product relative to other categories
- Identification of opportunities for product innovation and differentiation
- Recommendations on sales approach
A strategy was developed around three principles:
- Pricing differentiation (based on channel, geography and value-add)
- Product differentiation (based on increasing range and creating an environmentally friendly range)
- Service differentiation (based on identified channel characteristics and needs)
Based on our findings, the company grew its income before interest and taxes and depreciation and amortization (EBITD) during a three-year period by approximately 50%, adding over $50 million in value.
Building & Construction
Laying the Foundation for Growth: Synthetic Solutions in Building and Construction