Group strategy and business restructuring in China transportation market 

One of China’s largest state-owned enterprises is a top-10 global shipping and logistics company. To attract investment, the enterprise needed to develop a clear strategy and business model.

Challenge
The enterprise comprised several hundred subsidiaries across different business areas. These subsidiaries varied significantly in performance and capabilities, and many overlapped or were competing businesses. In addition, the enterprise faced financial performance issues, such as lower operating margins and high debt levels.

Approach
A. T. Kearney worked with the enterprise to develop a four-step approach to drive strategy development and a group-wide effort to restructure its subsidiaries:

• Develop the strategy – conducted performance diagnostics of the group to assess its global competitive position; evaluated the different markets’ attractiveness through analysis of the size, competition, and growth potential; developed future vision, strategy, and key success factors
• Evaluate restructuring options
• Design organization
• Implement and measure results

Results
The project resulted in tangible improvement and significant growth for the shipping and logistics company:

• Cost savings achieved ranged from 2.5% of total cost base in Year 1 to 5% in year 5
• Revenue from the core business increased 75% during the following four years

Contact

For more information, please contact Mui-Fong Goh.