The Right Basic Strategy – Cost Leader or Performance Leader?

Client Challenge

The parent company of a wholesaler demanded highly ambitious growth targets for its portfolio companies. In order to achieve the targeted return on investment, our client, the CEO of the wholesale company, brought its management together to make the company’s insufficiently focused activities more effective and align them with the market.

Mandat Intervention

We designed and moderated a series of strategy workshops, attended by the company’s management and, on a case-by-case basis, experts from the various departments. The progress of the acquired insights was documented for each workshop and made available to the participants for further study.

On the basis of substantiated market intelligence, we analysed the sales channels in the market, evaluated risks and opportunities, and compared the new findings with the current situation.

After the initial fundamental strategic positioning, the company’s two areas of business were separately developed.

The necessary implementation projects were derived directly from the fundamental strategy to ensure that the desired results were actually achieved.

Results

The management reached a consensus on the fact that both divisions of the company needed to have separate fundamental strategies due to differing market conditions. One of the divisions adopted a strategy of performance leadership, while the other is pursuing the cost leadership strategy.

The company’s supervisory board approved the new setup.

The employees were then informed of the new fundamental strategies and their consequences and were familiarized with the corresponding action plans.

The management is fully focused on the execution of the projects.

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