Strategy Development Case Study

Targeting growth in the right verticals?

Situation
  • Industrial and consumer goods business unit of an American conglomerate with over US$150 billion in annual revenues
  • China sales growth lower than expected despite strong industry growth
  • Strong competition from increasingly sophisticated domestic Chinese companies and global competitors
  • Need to determine future potential of seven different vertical markets (Oil & Gas, Utilities, Process Manufacturing, Pulp & Paper, Transportation, Commercial Buildings, and Mining)
Approach
  • Formed project team with cross-functional client representation
  • Created 5-year aggregate demand forecasts for each vertical
  • Narrowed down demand to market opportunities served by the client
  • Demand further segmented by product line, geography and customer type
  • Verticals ranked based on growth and profit potential
  • Exclusive information about potential client investment projects for the coming 2-3 years collected in database
Result
  • Resources allocated to the verticals with the highest growth and profit making potential
  • Sales and marketing efforts aligned to drive sales growth in the most attractive segments of each vertical
  • Margins improved by a focus on projects where the client could best leverage its competitive advantages and avoid price competition
  • Client recommended to explore acquisitions of one or more advanced Chinese competitors in one product segment