BCG - The Boston Consulting Group

Situation

The client is an international trading firm—a subsidiary of a major steel company in China. Its goal was to achieve leadership positions in each of its market segments in order to increase its contribution to overall profitability and return on assets to the parent company, and, ultimately, build itself into an important entity within the organization. It planned to do this through a business reorganization and the streamlining of its trading portfolio.

Approach

The BCG team undertook a four-step program. We began, first, with a complete assessment of the client’s value chain, detailing the scope of the trading business, the layout of its asset integration, and the decision logic for its corporate structure. Second, we helped create a detailed business model that included options for each of its core trading businesses—key strategic thrust, ideal organizational structure, and optimal development pathways. Our third step was to help establish connections between our client (the subsidiary) and the other entities in the steel company’s organization—establishing linkages with the trading and procurement value chain, identifying e-commerce strategy options and contact points, and finding opportunities for logistics tie-ins. Finally, we outlined a strategic agenda and implementation plan.

Impact and value created

The new strategy and the organizational structure proposed by BCG were adopted and immediately implemented by the client.

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