A global food ingredient producer had a leading market share and a portfolio of technically-differentiated products, but financial results had been lagging. Revenue remained flat, and earnings were below expectations. CRA was asked by the client’s board and CEO to:
- Examine the company’s market and internal economics
- Develop a strategy to turn around the business
- Create a more sustainable business position, and assist with implementation
CRA’s approach to solving the challenges consisted of three phases.
- Evaluation – Analyzing the market (including customer-product segmentation, pricing drivers, competitive dynamics, segment profitability, and value chains), the client’s internal economics (revenue by segment, plant costs, and SG&A costs), and the client’s manufacturing network (optimizing capacity, utilization, and demand by plant). CRA worked with key employees in operations, finance, sales, and marketing to create these views of the business.
- Strategy development – Together with senior client leadership, we developed and refined a strategy to reduce costs, maximize asset utilization, and for the longer-term, reignite growth.
- Implementation – We worked with senior- and mid-level client management to scope, guide, and coordinate a variety of change-implementation projects across the organization.
This project led the client to adopt a new segmentation approach for understanding and supplying customers, products, and markets. Overall organization focus is shifting from a market segment-led organization to a product-led organization. Using optimization software, CRA helped identify several asset rationalization opportunities; implementation against those opportunities has begun. We also helped build alignment around exiting loss-making segments, and implementation there has begun also. CRA is currently helping to re-scope previously launched business improvement projects and train client personnel in key project management skills.