Strategic realignment of a business unit
Focus areas:
Reorganization of a headquarter-focused product division into a global business unit / sales strategy / pricing / manufacturing fooprint
Company:
- Globally active family-run group of companies, headquarters in Germany
- Measurement and control technology, sensors and fittings, €1 billion turnover, 10,000 employees worldwide
Responsibility:
- BU management, responsible for € 200 million turnover worldwide, up to 600 employees in the main plant and >1000 employees in the group companies
- Product portfolio: Mechanical and mechatronic measuring devices and fittings
- Global responsibility for portfolio, product management and R&D as well as production at 10 locations worldwide (D, PL, US, IN, IT, BR, RUS…)
- Global matrix responsibility for sales strategy/pricing/global key accounts
Initial situation:
The dynamic growth of the business unit in recent years, which was strongly driven by the internationalization of business, has come to a standstill. The overall market is stagnating or shrinking. Formerly insignificant players from best-cost-countries are developing into strong competitors in their home markets and are attacking the traditional markets in Europe and North America as well as in global projects.
Margins are coming under severe pressure. Continuous price and margin erosion in all markets and thus continuously declining profitability of the business unit. The business unit’s headquarters in Germany is the largest production site and accounts for around 40% of the BU’s global sales.
Measures:
- Establishment of a production site in Poland with relocation of 250 jobs from Germany
- Introduction of value and customer-based pricing – later rolled out to the group of companies
- Managing the international activities of the business unit and performing the coordination and control function
- Reorganization of product management and support by integrating employees with international sales experience
- Development and implementation of portfolio optimization measures with regional sales organizations
- Definition and introduction of a global intercompany pricing standard and a consolidated income statement (together with Finance + Controlling)
Result:
- Turnaround and development of the BU into the Group’s cash cow
- Sales growth against the market trend
- Production relocated to new plant in Poland without any loss of performance – even slight increase in quality and OTD
- Development of the organization at the headquarters from a local product division to a globally operating business unit
