Identifying directions for long-term business value growth and developing corporate strategy for an integrated metal and mining company
Client management initiated this project and invited RCG in order to review the current corporate strategy. The goal was to identify the most profitable areas for further development securing business sustainability and minimizing external risks.
To answer client questions RCG offered structural approach which covers steps of market and technology analysis, opportunity identification, evaluation of options, prioritization and planning of strategic initiatives. Our industry expertise and modelling competences allowed us to develop clear vision for client future development and recommend integrated roadmap to achieve it.
The full story
Client company operating several mining assets and steel plants holds prominent positions in both raw materials and steel products markets. The management wanted to review the current development course and find new points of growth in own and linked industries. For this purpose, client was looking for the marketing examination of current product portfolio, viability check of the current strategic direction, and benchmarking with regional and global competitors.
List of concreate measures aimed at overall business value growth integrated in a strategic roadmap was expected as a result of the initiated project.
For project implementation RCG created 3 teams of consultants who worked in parallel in 3 following areas: industries and markets, operations and technology, finance and strategy. In order to handle the project tasks in a consistent and holistic way the 6-step approach was developed:
1. Align understanding of current situation and project goals
2. Analyze market and technological trends and impact on client business
- Analyze industry dynamics and identify potential market demand
- Assessment of future trade scenarios and market entry barriers
- Forecast of sales volumes and prices for main products
- Justification of current assets/technology strategic fit to future scenarios
- Identification of potential innovations/trends in technology to offer savings
3. Development of the long list of strategic options for future growth
- Identify potential growth opportunities based on expansion and extension of current businesses
- Current and future product mix & volumes, identification of niches
- Up-/ downstream expansion, opportunities for integration with key customers
- Analysis of M&A opportunities, creation of JV and alliances
4. Development of the short list of strategic options
- Assessment of potential opportunities for the purpose of generating a shortlist for deeper analysis
- Evaluation of strategic and financial impacts of short-listed actions for different scenarios
5. Prioritize the list of strategic options
- Prioritization of a list of opportunities based on financial effects and risks
- Development of strategy based on integration of specific opportunities
6. Formulate strategic roadmap for next 12 years
- Development of a roadmap for achievement of strategic goals
- Establishment of a measurement system for strategic progress monitoring
To provide the client with solid recommendations RCG used reliable forecasting and modeling tools which were customized or fully developed for the client´s case.
Working in close cooperation with the client RCG team went through all six offered steps for strategy development. This effort resulted in a long-term strategic plan which includes initiatives with the maximal financial effect and minimal risks based on the future market change, technological trends, client competitive advantages and available resources.