Strategy

Business Strategy and Tactics Formulation:

While no two companies are alike, all businesses in an industry share similar attributes. At Cort Consulting Group, our extensive industry experience allows us to quickly understand the nature of a client’s challenges and opportunities. Our focus is always on maximizing the long-term return on capital invested into the business. In developing strategy, we utilize a project team comprised of our staff and members of the client’s management team to evaluate the strategies and profitability of the client’s company. Although every engagement is unique, one of the first steps is usually a portfolio analysis, examining the profitability of each of the client’s business units, brands and/or product lines. The analysis includes not just where the profitability is today, but where it has been (the trend) and where it is expected to go (the projection). Especially important is consideration of current aspects of and anticipated changes in technology, competition, raw materials and consumer demand. Equally important is understanding full and incremental costs and consequent margins.

Along with the portfolio analysis, an understanding is developed of the business’ core competencies. This includes evaluating the relative strength of production, distribution, sales, marketing, management, trade secrets, technology advantages, location benefits, employee talents and other factors that may create a competitive advantage for a particular business unit, brand or product line. Once the business portfolio and core competencies are thoroughly reviewed, the prospects for each business unit, brand and product line can be evaluated and decisions made regarding what should be supported, what should be maintained/harvested, and what should be pruned, omitted or divested.

Supporting and growing a business unit, brand or product line requires an understanding of the competitive situation and current technology. We examine where the competition currently has sales, where they will likely expand and why. We look at the market’s current and planned manufacturing capacity to understand who has an advantage in terms of manufacturing cost, distribution cost, quality and consumer perception. If there is new technology available that can lower cost and/or improve product quality, we examine the cost and benefit of obtaining the technology and the risk of not obtaining it. New product opportunities also are analyzed thoroughly.

When examining a business unit that is less profitable than desired, we usually try to look at product and customer profitability and the breadth and cost of the product portfolio. If there are gaps in the product portfolio, we examine whether it is more prudent to make or to purchase the products required to fill out the line. If there are multiple production facilities, it may be prudent to close one and consolidate operations into fewer facilities. To understand the cost of manufacturing the product, we examine the current full and incremental plant costs for existing products, and the capacity and capabilities of the existing production facilities. When the focus and expertise of the organization is at odds with the efficient and profitable operation of a particular business unit, brand or product line, then divestiture should be considered.