Strategy Execution Life Cycle – Complete life cycle from definition through approval to execution
Background context – A heavy asset transport company within a diversified construction materials portfolio was failing to secure sufficient and regular capital investment leading to declining asset integrity, operating performance and market competitiveness.
Strategic Challenge – To develop a strategy for the transport business within the constraints of limited access to investment capital.
Strategic Activities – Undertake critical assessment of business performance by market segment. Undertake market assessment to understand high performers in the industry segment and key success factors for that high performance. Divest or close down activity where performance is low and where prospect of improvement in an environment of capital constraint remains low. Reduce fixed costs by consolidating asset footprint and shift to outsourcing of capability where critical mass can not be achieved or market structure. Invest heavily in digital and information systems to help manage logistics movement knowledge to enable enhanced asset utilisation. Adopt alternative funding structures for required fixed assets. Invest heavily in procurement capability to enable sourcing of incremental capacity to manage high variability in demand. Refine pricing structures to reduce demand variability by incentivising demand management.
Outcomes – Divestment or closure of non profitable or non core activities, reduction in physical assets by circa 60%, significant improvement in market cost competitiveness for services and improved quality delivery that improved customer retention and grew revenue.