Profit strategy in the paper industry

After the new investors privatised the company and realised a succesful transformation path - thanks to important investments in operations and implementation of a new global sales organisation - the production facilities were reaching full capacity again. This triggered a new phase for the organisation, switching from a volume strategy to a value/profit strategy. This new strategic path required a new market approach, with a focus on high added value applications to yield on every ton of the available capacity.

How we helped

We supported the organisation in building a new pricing and market strategy - and spiced up the corporate strategy process - in a true collaborative relationship with the steering commitee (owners), the CEO, commercial director and the sales/product management team.

Step 1 : a margin optimisation project - realising an important mindshift in sales - to 'close the most obvious price and margin leakages' in both the product and customer portfolio

Step 2 : install a new discount and surcharge grid + embed in admin processes

Step 3 : install price guidance per application/region + install a tighter price escalation process - embedde in a new Configure-To-Quote software tool

Step 4 : a market segmentation excercise to define the most attractive segments/applications to invest in (product innovation prioritisation)

Step 5 : a corporate strategy project - assessing the market chain/competition/eco-system of the industry - defining the strategic drivers and areas of excellence to invest in per business unit in order to be able to outperform competition - define the capabilities to make it happen - setting ambitious goals - defining the go-to-market strategy per business unit

Step 6 : assessing the impact on the structure/organisation of product management, innovation, customer service and the international sales organisation.

Step 7 : align stakeholders around the new 'profit' strategy and define the future behavior

Impact

Boosting client' return on sales by > 500 basis points (real number = confidential)