Background and Challenge
The client is a diversified manufacturer of building and electric products with ~$2B in revenue. The company had historically grown through M&A, and as a result was a complicated mix of loosely affiliated businesses.
- Products had no overarching strategic coordination or growth plan
- Typically a small (<5% share) player in multiple, large end markets
- Go-to-market strategy was a complex mix of end markets and channels
L.E.K. Consulting was engaged to develop a robust strategic growth plan for the client by developing business unit plans and associated financial projections, and creating an overall portfolio and growth strategy encompassing all business units. Additionally, we were asked to assess the company’s manufacturing facility in China and how it fits into the overall strategic growth plan.
Approach and Recommendations
We helped the client understand all of the fragmented and challenging markets that its business units participate in. For each business we developed and prioritized specific strategies to drive rapid growth, manage competitive threats, improve strategic positions, leverage channel strengths, and overcome obstacles in market positioning. We helped the client understand the potential impact of each strategy on its organizational structure and transition plans (including talent).
Throughout the project, we worked closely with the client. We got buy-in for the strategic direction from many layers of management. We helped the client understand how to position its businesses to capitalize on market recovery and other market trends.
Results
The client significantly increased internal confidence in decision making due to the objective and comprehensive fact bases developed by us. We provided the client with a clear focus and strategic priorities that resulted in greater growth and value creation for the portfolio.
We identified and evaluated strategic growth opportunities for each business unit which could lead to millions of dollars in incremental revenue and EBITDA of up to $200M for the portfolio.
Client executed on the strategy and experienced ~300% stock price appreciation in 18 months.
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