The company was a market leader in floor tiles and was highly profitable with a plant located in the west, one of the largest markets. A general recession and excess capacity in the floor tile industry had a negative impact on the profitability and market share. The top management felt that it was imperative to define a business strategy not only to address the erosion of profitability and market share, but also to effectively compete in the floor tile market post the general agreement on Tariffs and Trade (GATT) era, against Italian and Chinese imports.
To assess the business strategy, UC adopted the following approach:
- Analysed the global trends to assess the industry lifecycle and attractiveness and its implications for the company
- Defined the market segments and assessed its attractiveness based on the following criteria -
- Floor tiles market vs. wall tiles market
- Projects market vs retail market
- Assessed the company’s competitive positioning against the competitors in terms of pricing strategy, market positioning, promotion strategy, target customer group etc.
- Realigned its strategic focus based on the above analysis and identified strategic initiatives for the company in the short and medium term
- Prepared a financial plan and assessed the viability of business
- Prepared an implementation plan, highlighting key milestones in execution of strategy defined
The profitability of the client improved considerably by them primarily implementing changes in their product mix and in exploring new markets. The client regained its lost market share in a horizon of three years and also diversified into other allied business and similar products.