A Steel Company Seeks to Regain Market Leadership

A neighboring country had long been a significant export market for SteelCo*, where it was the top player. But over the course of five years, the advent of new domestic manufacturers, increased competition from other importers, and macroeconomic instability within that country led to decreased sales and market share. SteelCo turned to us for help in mounting a response.

We began by conducting a careful analysis of the country’s economic issues, which were having a direct impact on demand for steel. We also carried out deep-dive research on new competitors in the market, including a detailed unit-cost position analysis and field visits to capture pricing and market insights on the ground. Consequently, we found that one competitor faced potential financial distress and determined the future competitive position of the other major competitor. We also explored local scrap availability to determine if it could support local production, and conducted a careful review of SteelCo’s past performance and positioning in the market, going back seven years.

That work led to a strategic roadmap that included no-regrets moves that could be implemented under any scenario, as well as other actions SteelCo could take that were conditional on certain triggers. A combination of no-regrets and product portfolio initiatives would ensure that SteelCo could defend between 7 and 13 percentage points of market share vs. baseline projections across three scenarios, and generate up to 1x in additional EBITDA.

We also identified triggers designed to monitor potential M&A actions based on the targets demonstrating specific performance and deal-feasibility signals, and the country’s macro situation evolving to a best-case scenario. This analysis and roadmap positions SteelCo to compete more effectively, improve performance, and move quickly on key actions when the timing is right.