Case: Portfolio Prioritization

Portfolio Prioritization at a Manufacturing Company

A publicly traded $2.5B equipment manufacturing company wanted more disciplined capital and resource allocation across its 8 operating units.

In a strongly quantitative and engineering-led culture, a qualitative two-by-two or nine-block was insufficient – the CEO and leadership team wanted a mathematical model to rank order their opportunities. Our solution indexed 14 quantitative factors across the value domains of scale, growth and profitability, as well as market size. The inputs used readily available internal data, allowing easy adoption of the model.

Application of the model resulted in acceleration plans on the company’s most profitable business, and a new way to evaluate the company’s M&A pipeline.  As a post-script to this case, the client recently executed the acquisition of a significant player in one of their most attractive market spaces.  The deal increase the company’s size by almost 30% and accelerated its growth profile.  The stock jumped 8% immediately and has continued to climb – +16% in the two months since the deal was announced!

“That was the best strategic conversation I had participated in with this leadership team in my time here. The analysis was excellent, the communication focused, and the preparation with the team really helped unlock a deeper conversation about our portfolio prioritization.”
Head of Strategy and M&A

“The outcome definitely exceeded my expectations.”