The $5 billion polyester business of a $30 billion global chemical and life sciences company was preparing for a strategy review with the corporate board of directors. This situation was complicated by several factors.
- The client’s corporate parent had publicly stated its intention to divest of all chemical/polymer businesses.
- The client had not previously developed a coordinated corporate strategy (i.e., the client had previously been managed as several autonomous business units).
- A new strategy process was being implemented (developed by our client’s corporate parent).
- Our client’s industry was facing the trough of its industry cycle (and thus our client had mostly bad news to communicate).
CRA was asked to work with representatives throughout the client’s organization (business development, finance, SBU general managers, et al.) to develop and articulate a corporate strategy meeting the guidelines laid out by the client’s parent company. We were also asked to develop a separate post-divestment strategy for our client with the objective of commitment to polyester industry leadership.
Challenge:
The project entailed integrating business unit results and strategies and developing scenarios and financial forecasts for fibers, bottle resins, intermediates, etc. CRA worked closely with client personnel through interviews and working sessions to clarify and update existing business strategies, examine the current market situation and competitive environment of the polyester industry, and develop a coordinated corporate level strategy. Following the completion of the board presentation, CRA resumed work with the client in developing a post-divestment strategy. This work focused on developing and valuing strategic options including modeling financial results, developing risk scenarios for the options, and creating pro-forma financial statements for the global polyester business.
Solution:
The client successfully presented an articulate, coordinated corporate strategy to its parent company board of directors. Further, our client now has a clear post-divestment strategy for commitment to polyester leadership.