GlassCo's* net income had tumbled from $41 million to a loss of $3.5M over a three-year period. Its budget called for a loss of $3.5M the following year.
Most of the decline could be attributed to overcapacity in the stagnant industry and the resulting fall in prices.
GlassCo focused on driving volume growth to recoup the lost revenue, but the result of chasing more costly business was that GlassCo found itself with lower prices and a higher cost structure.
GlassCo brought in Bain to help the company turn around its recent poor performance and to develop a long-term strategy that would allow GlassCo to remain both profitable and competitive in the marketplace.
A detailed study of industry trends and company processes revealed four key areas for improvement.
Bain's analysis identified four key actions for GlassCo to take to address its declining profitability
GlassCo has increased sales to its more profitable customers and on its most profitable products and reduced its cost base. The result was a profit of $9.2 million through three quarters of its fiscal year compared to the previous full year's $3.5 million loss.
* We take our clients' confidentiality seriously. While we've changed their names, the results are real.