The Situation
The client's newly acquired portfolio company is a leading manufacturer in a concentrated industry that formerly earned high margins selling to a fragmented customer base. But industry growth is beginning to slow and customers are experiencing financial pressures that threaten to further curb future growth.
Our Approach
Shortly following acquisition by private equity investors, Bain initiated a 100-day blueprinting process to diagnose the company's competitive position, prioritize opportunities to improve performance, and develop a detailed road map to guide implementation.
Our Recommendations
Introduce a phased sequence of parallel initiatives to:
- Implement new account planning strategies and improve penetration of the more profitable small accounts and contract customers.
- Redesign the core product to simultaneously reinvigorate growth, streamline production and reduce costs.
- Selectively raise prices and clarify procedures to standardize pricing and make it more effective.
- Reduce material yield loss during the manufacturing process.
The Results
- EBITDA increased 50% within three years, principally as a result of the growth initiatives.
- The company was sold, earning a fivefold return on invested capital.
* We take our clients' confidentiality seriously. While we've changed their names, the results are real.