Growth Strategy | KPMG | BE

Growth Strategy

Growth Strategy

Helping a global oil and gas major disrupt its market.

Helping a global oil and gas major disrupt its market.

Developing a go-to-market proposition, value based pricing strategy and operating model for a game-changing lubrication technology

The automotive lubrication division of a large, global oil and gas major, had invented and patented a new and revolutionary lubrication technology which promised to disrupt the market. The client needed assistance in developing a go-to-market strategy, value based pricing and operating model to underpin the new business it wanted to incubate around the technology.

The 9 Levers of Value (9LoV) framework provided the structure for designing a customer centric business model, aligned operating model and robust implementation plan.

Our approach entailed:

 

  • Identifying and prioritizing target customer sets, using a ‘growth platforms’ methodology to cluster and prioritize opportunities 
  • Undertaking a detailed product value assessment to identify and quantify the key sources of value the client’s technology had relative to alternatives. This analysis formed the basis for defining the value propositions and the target price range
  • Quantifying the above into a business plan that could be used for internal communication 
  • Developing operating model design principles that aligned to the client’s strategic ambitions

 

We brought in KPMG subject matter experts in Corporate Finance, Valuations, Transfer Pricing, Joint Venture & Alliances and Supply Chain, as well as regional specialists from Germany, the US, China and Japan at various points of the project to help ensure the client received the most relevant advice and support as they navigated internal and external hurdles to make the new technology a success.

The technology was successfully launched and KPMG continues to support the client, providing bespoke insight, strategic challenge and market strategy input.

 

Charting double digit organic growth in China for a long underperforming multinational organization

Identifying and assessing organic growth opportunities for an industrial company in China.

A well-established multinational player in the industrial sector was facing growth challenges in its Chinese operations. Since entering the Chinese market in the 1980s, the company had grown through acquisitions and developed a wide-spread presence across the country.

Whereas their end sectors were growing at close to double digits, organic growth for the client’s business in China had been flat. The acquisitions had not only masked underlying growth challenges but had also led to a series of silos: business units split by sector and province that did not collaborate.

The company’s underperformance stemmed from a number of factors, including:

 

  • offerings that were not tailored for the Chinese market
  • a sales force that was inappropriately incentivized
  • an underlying cost base which made competing with rivals difficult.

 

A team of KPMG’s Global Strategy Group (GSG) professionals was engaged to develop an implementable plan to achieve organic growth in line with the market. First, the key issues and their underlying drivers had to be identified. GSG’s primary research driven approach of internal interviews across different levels within the organization, coupled with external benchmarking and surveys with key customer groups, uncovered misalignment between the organization’s business and operating models.

Using a structured approach to identify the key shortfalls, both in terms of Chinese competition and global, KPMG’s GSG professionals helped initiate a number of significant quick and longer-term wins.

Alignment of operating model levers played a key part in enabling the business model to flourish – for example, the supply chain and warehousing system that had evolved over time - with China-sourced parts going to a centralized warehouse in Europe only to return for a customer order in China - had effectively removed any price competitiveness and bargaining power from the salesforce. Likewise, the salesforce training and incentive model underwent a significant overhaul.

The client emerged with clear recommendations for an operating model redesign that would enable the business model to be more customer centric attaining double-digit organic growth. Within two years, the client had achieved its first better-than-market growth performance in almost two decades.

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