Automotive: Operational Excellence & Strategy
Dilemma whether to surrender or continue existing business?
Potentially of closing down the operations if unable to match OEM pricing expectations.
We studied the current business model to understand why existing business was making losses and whether the proposed price revision would make economic sense.
- Evaluate ideal business model Vs. current
- Used Proprietary Business Modelling Tool to arrive at minimum volumes for break even and profitability at proposed discounted price by OEM
Cost-Optimisation and strategic recommendation to stop child-part outsourcing which enabled high value contributions there by making existing business viable
Proposed discounting was accepted with MOQ.
External perspective of re-evaluating business model and viability helped client to make money in existing business while accepting new opportunity confidently.