Few industries have been hit by globally disrupted supply chains, higher producer prices, higher interest rates and the Russian war of aggression against Ukraine than the construction industry. Especially suppliers are confronted with challenges that pressure operating profits. Our recent project involved partnering with a construction industry supplier confronted with a uniquely challenging situation. Our mission was to identify and implement strategic options that would not only stabilize but also enhance their operating profit.
Disrupted Supply Chains: Global supply chain disruptions had led to delays and increased costs, affecting the timely delivery of materials and overall project schedules.
Rising Producer Prices: Inflation and increased costs of raw materials were squeezing profit margins, making it difficult to maintain competitive pricing.
Market Volatility: Lower construction activity caused by higher interest rates lead to fluctuations in demand that further complicated the financial situation of the supplier.
To achieve the objective in challenging circumstances, we embarked on a comprehensive consultation process that began with in-depth discussions with key stakeholders following our TTE fair process imperative. Through a series of one-on-one interviews and a collaborative management workshop, we developed strategic options tailored to the company's unique situation:
Our strategic options were meticulously crafted to explore various pathways for improving operating profit. Each option was defined and quantified with specific improvement measures for the coming years, and business cases were calculated and compared to a base case scenario.
A critical component of our TTE-approach was the thorough analysis of the impact of each strategic option at the product level. We examined changes in sales, costs, and profits, ensuring that each strategy was viable and sustainable. Collaborating closely with the client’s experts and managers, we jointly defined measures that were realistic and actionable.
While not only looking at the construction industry, key success factors for any SME can be derived:
Through TTE’s detailed and methodical approach, the client now has a well-defined strategic plan that addresses current challenges and positions the company for future success. In an industry marked by uncertainty, having a clear strategic direction is essential. It empowers companies to navigate complexities, capitalize on opportunities, and achieve sustainable growth. This project underscores the value of strategic thinking and collaborative execution in driving organizational transformation and enhancing operating profit.
TTE Strategy