Better a Nightmare of an Ending than a Never-Ending Nightmare
A subsidiary of a leading European wholesaler had been a drag on the parent company’s financialperformance for years without producing any recognizable added value for the group as a whole. Considerable losses in the operating business inevitably called into question the future of the subsidiary.
Our client, the divisional managing director of the parent company, commissioned Mandat to assist the management in making a strategic decision regarding the future of the subsidiary.
In several moderated workshops with the management of the parent company and the subsidiary, we precisely assessed the market opportunities and operating risks. Market and competitive information was collected and incorporated accurately into the discussion.
In a multi-stage decision-making process designed by Mandat, the facts were evaluated, development possibilities and future alternatives were worked out, and finally a recommendation was formulated.
The decision was unanimous.
The subsidiary was liquidated. The most capable employees were assigned positions of responsibility within the corporate group.
Profitable key activities of the subsidiary were reintegrated into the group and continued there.
Annual losses avoided by the parent company: approximately €2.5 million.