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    GrowthDirections 2009

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    dchandwani
    Current economic crisis has forced executives to take drastic actions to stem decline in their companies' performance. Chemical companies are driving cost reduction through workforce reductions, shut downs and production cutbacks. Accurate benchmarks of competitors' costs and profitability are needed to identify gaps and cost reduction opportunities.

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    GrowthDirections 2009

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    dchandwani
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    Current economic crisis has forced executives to take drastic actions to stem decline in their companies' performance. Chemical companies are driving cost reduction through workforce reductions, shut downs and production cutbacks. Accurate benchmarks of competitors' costs and profitability are needed to identify gaps and cost reduction opportunities.

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    Current economic crisis has forced executives to take drastic actions to stem decline in their companies' performance. Chemical companies are driving cost reduction through workforce reductions, shut downs and production cutbacks. Accurate benchmarks of competitors' costs and profitability are needed to identify gaps and cost reduction opportunities.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    17 views1 page

    GrowthDirections 2009

    Uploaded by

    dchandwani
    Current economic crisis has forced executives to take drastic actions to stem decline in their companies' performance. Chemical companies are driving cost reduction through workforce reductions, shut downs and production cutbacks. Accurate benchmarks of competitors' costs and profitability are needed to identify gaps and cost reduction opportunities.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    Growth Directions

    Consulting Research Chemicals and Materials June 2009

    Viewpoints

    Sitting on the sidelines during economic downturn? Prepare for Competitive Advantage
    Dilip Chandwani, Vice President, Manufacturing and Supply Chain
    The current economic crisis has posed unprecedented near-term challenges that have forced executives to take drastic actions to stem the decline in their companies performance. As a result of a sharply declining demand, chemical companies are driving cost reduction through workforce reductions, shut downs and production cutbacks. These immediate actions are being taken to survive and strengthen financial position in the near term without completely undermining the long-term objectives. Concurrently, management needs to assess scenarios for economic recovery and be prepared to pursue initiatives to react aggressively and improve their competitive positioning. These initiatives are broadly segmented in two categories: Evaluation of strategic options (for recovery and growth) to improve top line performance Performance improvement programs based on competitive cost benchmarking A key area of focus in performance improvement programs is lowering the cost of goods sold through operational improvements and supply chain optimization by identifying opportunities to reduce cost of inputs, improve plant utilization, decrease staffing, optimize products portfolio and reduce manufacturing costs. However, accurate benchmarks of competitors costs & profitability are needed to identify the gaps and cost reduction opportunities. Many companies believe that it is impossible to develop accurate, granular assessments of competitors cost structures and profitability in an ethical way. This is untrue. Using competitive intelligence techniques and considerable industry experience, it is possible to ethically assess competitors capabilities, practices and cost structure. The alternatives such as internally-driven estimates, generic external benchmarking or blind industry surveys do not provide the insights required to understand the competitive potential of performance improvements and their sustainability in the face of competitor reactions. For example, one of our clients could not understand why a major competitor continued to fight aggressively for market share even though it was known to be close to bankruptcy. Once we had unraveled the competitors business unit cost structure and P&L, it became clear that although the company was performing badly overall, the specific business competing with our client was making very healthy returns. The full benefits of performance improvement programs can only be realized with in-depth industry knowledge and more reliable input on the manufacturing and supply chain position of major competitors, and strengths / vulnerabilities and positioning on various KPIs, and not by any sophisticated analysis of internal data.

    Cost leadership often translates into better margins for the business, but can also provide for additional resources in sales & marketing, and new product development, to drive growth. Klines Competitor Cost and Profitability Analysis service is unique in its ability to develop insights into competitors revenues and pricing, manufacturing capabilities, COGS, sales & marketing, new product development, and business strategies. We have the expertise to meet clients needs in this area in both developed and emerging markets. Dilip Chandwani Vice President
    +1-973-435-3424 [email protected]

    Americas Asia Pacific Europe Middle East


    www.KlineGroup.com
    2009 Kline & Company, Inc. All rights reserved

    Conference Papers & Research


    Chemical Industry Workshop - Competitor Cost and Profitability Analysis, Kuala Lumpur 2006 Competitive Cost & Profitability Analysis, SCIP Euro Summit, Rome, October 2008 Global Business Opportunities in Synthetic Latex Polymers, Ten-Year Outlook

    Examples of Recent Engagements


    Specialty Chemicals: Understanding the Threats from a Newly-Commercialized Process Medical Devices: Achieving Sustainable Cost and Market Leadership Consumer Products: Assessing Potential Opportunities from Competitor Costs and P&L

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