Manufacturing, Strategy & Organization

Regional expansion strategy in China

Definition of attractive regional markets and expansion strategy for a world leading cement producer

Challenge

The client and its Chinese partner target to further develop its leading position in China. They need to identify and expand into attractive markets surrounding regions in the next 3-5 years, in particular when there is nationwide restructuring and rapid development of Chinese cement industry. However, there exists a big difference in management culture and decision-making process between both parties. An agreed approach and model needs to be developed. Moreover, the broad regional scope (an area almost equals to 20 per cent of Europe) also creates great difficulty and complexity to this initiative.

Approach

We designed an assessment model jointly with the client taking Chinese industry characteristics and regional differences into consideration. Important aspects were organised and assessed from the market perspective and industry perspective to reduce the complexity. Scenario analysis approach was also linked and used in a further assessment of how the picture would be changed by investment activities of the client for one interesting provincial market.

Value

Our model assessment and approach provided a common language that both parties can communicate. The regional expansion landscape and master-plan were developed to be the guidance of the client’s future investment activities in the regions and basis for investment appraisal from global headquarter. Furthermore, Chinese staff of the client (intentionally rotate on/off the project) received on-the-job training on field research, analysis, planning, communication and reporting.

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