Finding portfolio opportunities at consumer durables co.
A leading consumer durable goods manufacturer consistently pushed the boundaries of product quality and performance; however, this came at a cost—a ballooning product portfolio, increased strain on engineering resources, missed product development timelines, and stagnating operating profit. By working with WP&C to identify the true value and cost of portfolio complexity the client was able to transform their portfolio, improve EBITDA by 10% and improve NPD capacity by 20%.
A large home appliance manufacturer grew revenue over several years through line introductions and extensions but saw EBITDA stagnate. SKUs grew by over 25 percent per annum driven by additional product tiers and combinations of configurations. Further complicating matters were new government regulations which would require a revision of nearly every product to ensure compliance. Prior portfolio rationalization succeeded in 'cutting off the tail' but the benefits to engineering and profit never materialized. Management knew they needed a different approach –a more holistic view of the value and complexity each product introduced. A failure to act guaranteed that key product development would be placed on hold with EBITDA surely to fall.
With an understanding of the challenges the company was facing, WP&C worked with all levels within the organization to employ the 5 Facet Approach to portfolio optimization:
Based on the 5 Facet approach, the WP&C team identified actionable recommendations to meet the company's unique challenges:
WP&C’s work with the company enabled the discovery of critical portfolio optimization opportunities that resulted in:
A large home appliance manufacturer grew revenue over several years through line introductions and extensions but saw EBITDA stagnate. SKUs grew by over 25 percent per annum driven by additional product tiers and combinations of configurations. Further complicating matters were new government regulations which would require a revision of nearly every product to ensure compliance. Prior portfolio rationalization succeeded in 'cutting off the tail' but the benefits to engineering and profit never materialized. Management knew they needed a different approach –a more holistic view of the value and complexity each product introduced. A failure to act guaranteed that key product development would be placed on hold with EBITDA surely to fall.
With an understanding of the challenges the company was facing, WP&C worked with all levels within the organization to employ the 5 Facet Approach to portfolio optimization:
Based on the 5 Facet approach, the WP&C team identified actionable recommendations to meet the company's unique challenges:
WP&C’s work with the company enabled the discovery of critical portfolio optimization opportunities that resulted in: