Developing a Growth Strategy for a Cutting Tools Business

distribution

Client Challenge

The client was into manufacturing and supply of high-speed steel cutting tools. The cutting tools business had two key sub-divisions: Drills, cutters, reamers, and taps (DCRT), and broaches and gear cutting tools (BGCT). The DCRT division was an established player in the domestic high-speed steel (HSS) tools market, with high brand awareness, an established distribution network and a market share of about 15 percent.

However, it was plagued with outdated manufacturing equipment, poor brand image, and high costs. The BGCT division was one of the leading players in the industry and was considering acquisitions. This division had a technical collaboration with an international player. It had entered a South East Asian market and followed an outsourcing strategy for the developed markets.

Our Approach

UC Strategy assisted the client in the following ways:

  • Identified the global and domestic market size, industry trends and growth potential
  • Assessed the impact of substitute materials carbide, CBN and ceramics, and hard coatings on future demand
  • Identified profitability trends, competitive intensity and threat of new entrants
  • Conducted competitive position assessment by assessing market shares, brand image, distribution capabilities and competitive pricing
  • Identified and evaluated growth/exit options for both divisions
  • Defined growth options for domestic and international markets
  • Identified and evaluated acquisition options for the domestic market
  • Developed and assessed potential future market scenarios
  • Identified strategic initiatives and defined an implementation plan

Our Impact

A deep insight into the market dynamics viz. market size, market growth, competitive intensity, market trends, adoption of substitute material, emerging opportunities, and growth options – both organic and inorganic etc. An identification of strategic initiatives and a development of the implementation plan.

 

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