Management Consulting Case Study-Manufacturer of Ball Bearings

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Case Scenario
The client has seen stagnant revenues and diminishing earnings for the past three years. The CEO thinks the solution to his issue is high-margin service companies founded on already-existing core competencies.

Key Questions
How would you analyse whether or not there are prospects to establish sustainable new service firms from a Value Chain perspective? Based on your assessment, create some viable business concepts
Possible Recommendations / Approaches
Examining the value chain and recognising procurement as a critical capability are two skills the candidate must possess.

The company's procurement department, with its top-notch employees and procedures, is one of its key competencies. 2000 purchasers who work for its parent firm can also be accessed by it.

Large manufacturers like Caterpillar, John Deere, and others have a good working relationship with the corporation.

Large manufacturing businesses often purchase several hundred components (from around 500 vendors), but they also develop strategic alliances with the top 20 suppliers, including electronic links.

These strategic alliances have resulted in substantial cost reductions, but expanding them past the top 20 suppliers is not financially viable.

Based on the client's procurement capability, Deloitte Consulting suggested a new business model in this case, where it will handle suppliers that aren't in the top 20 for its main strategic clients. In order to cut costs and expedite the procurement process for components obtained from vendors outside the top 20, the client makes use of its web-enabled electronic connections. Planning is now taking place for the company.

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By  Vandana Gaur


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