Conducting a thorough RBU review in order to define action plans
Key initiatives focus on market and operations
Results exceeded expectations
Achieving full potential in South America
Problem:
The financial performance of the South American division of a chemical conglomerate was highly unsatisfactory, since most of the Regional Business Units (RBUs) were struggling with: - decreased contribution margins - high fixed costs - negative EBIT
External factors also negatively affected the division's performance - devaluation of Brazilian Real - economic slowdown - increased competition from national low-price products - overcapacity in the industry
Since the external factors were unlikely to change, the company needed to adjust to the new environment and find ways to achieve profitability.
The company launched a company-wide effort in which all RBUs were expected to revise current strategies and develop strategic plans to restore short-term profitability. Bain was asked to support this endeavor.
