Experience

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Audit of the Strategy used by Business Units

Situation

  • The client is a widely diversified machine-building corporation conducting operations in the growing Russian market and leading in the commercial, freight transport, bus and special equipment segments
  • In a number of segments the company commands a strong market position. However, management and the shareholders both understand that their position is not firm and in a market in which competition it increasing from both European and Chinese manufacturers, the holding could start to lose its position
  • The holding’s main shareholder set an ambitious goal of creating a global automotive corporation achieving firm business growth for its shareholders via preservation of its leading position on the Russian market and in CIS countries, as well as expanding into emerging markets
  • The holding’s management developed a corporate growth strategy through to 2020, as well as an overall business strategy  for its units and functional departments
  • The holding planned an IPO to gain financial resources for its development

Goal

  • To audit the business strategy, its business units and the holding’s functions and how they compare to the demands of international investors
  • To identify a corporate growth strategy for the holding, guaranteeing sustainable value in its growth
  • To produce professional documentation for the board of directors to protect the shareholders
  • To prepare documentation to negotiations with investors

Our approach

  • Conducted an audit of the business-units' strategies and the holding’s functional divisions. Documented the structure and compiled everything into one format, incorporating advice from international experts in the sphere of car manufacturing. Gaverecommendationsondevelopingthestrategy
  • On the basis of detailed analysis of international auto-construction experience, define the key factors in value creation and formulation of a successful business model for car construction holdings
  • Building a financial model for the holding to correctly and independently assess its financial indicators along with its company value on the basis of international benchmarking
  • Based on the analysis of the key success factors and interviews with the leading banking investors, as well as independent market forecasts, strategic alternatives were forecast leading to an entire business model for the holding being chosen
  • Taking the holding company’s development strategy and the holding company’s independent financial forecasts, prepared a document for negotiations with potential investors

Results

  • Conducted an audit strategy of the business, including its business units and functional departments, producing recommendations to improve them
  • A corporate strategy for the holding’s growth through to 2020 was developed
  • An action plan to prepare the company for its IPO in order to achieve maximum value was formulated
  • Documents for negotiations with potential investors were prepared

 

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