We ran a strategic workshop for a medium-size auto-parts manufacturer that planned to diversify its business
Industry practice Automotive
Type of client Medium-size Company
Study topic Strategic options for business diversification
Client situation: Over the last 20 years the client had been serving one of the major Russian OEM manufacturers. Although the business produced healthy margins, it was clear that the new technologies would make the Client’s assortment outdated and obsolete within the next 3-5 years. The Client needed to forecast future demand for the auto-parts it produced (predominantly for the repairs market) and identify opportunities for new business directions.
How MCG helped: MCG team built a robust forecasting model to predict the demand for the Client’ products. Based on cash in-flows predictions, current capabilities and key economy sectors analysis, the consultants, together with the Client team, identified the most attractive business ideas. Each business idea within the short list was discussed during a workshop with the top management and the shareholders of the company. As a result, the shareholders came to mutual agreement on business diversification and developed a roll-out plan.