Background and challenge
A leading processor of glass cullet in North America had capabilities that allowed it to tap into multiple end markets with its product. Nevertheless, management of the private equity firm that had recently acquired the company sought to identify the most attractive avenues to accelerate growth. They engaged L.E.K. Consulting to identify the most promising options and develop a strategy for entering these new markets.
Approach and recommendations
We began by casting a wide net and identifying 45+ market expansion opportunities (both end markets for cullet and recycling markets outside cullet). We winnowed this list to the top five opportunities using a rigorous prioritization process that involved close collaboration with the client, as well as 77 interviews with executives across the 45+ potential markets and extensive secondary research.
For each of these five opportunities, we built a fact base that included an assessment of:
- Demand and market fundamentals (e.g., size/growth)
- Customers (e.g., needs, segmentation)
- Competitive dynamics (e.g., players, positioning)
- Supply landscape (e.g., requirements, constraints)
- Strategic right to win (e.g., synergy rationale, alignment with strengths)
This assessment served as a foundation for the development of business cases for each opportunity. We then assessed the company’s ability to compete and identified any potential competitive advantages. We also quantified the economics of pursuing each opportunity, including capital expenditures, revenue potential and operating costs.
In the final phase of the initiative, we turned to strategy. We outlined action steps for pursuing each opportunity and developed a market entry strategy.
Results
The company incorporated the five opportunities identified by L.E.K. into its overall growth strategy and is pursuing them using the outlined key action steps and market entry strategy, enabled through significant commercial and production expansion capability investments.
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