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Caso di Studio

When market leadership is not enough

Market leadership was not translating into profits for a powerhouse packaging company. We used benchmarks to identify key performance gaps, and found ways to improve processes and reduce expenses to compensate for the industry’s inherent weakness. As a result of our work together, the client's share price doubled, and cash flow and performance continue to improve.

  • Tempo di lettura min.

In evidenza

  • 15% Decrease in cost

Intera notizia/storia

The Situation

BoxMax* leads the market, but industry-wide high fixed costs and low prices left it lagging in the red.
  • Two packaging companies merged to form BoxMax, an $8 billion powerhouse.
  • BoxMax became the clear industry leader in its packaging segment. Unfortunately, the market is a capital-intensive, high fixed-cost business suffering from excess capacity and low prices.
  • As a result, BoxMax was posting poor financial returns: it was projected to be $7 billion in debt on negative cash flow of $400 million. BoxMax was Bain to advise on how BoxMax could turn industry leadership into profits.

Our Approach

Bain used external and internal benchmarks to identify key performance gaps.

 

Our Recommendations

To compensate for the industry's inherent weaknesses, Bain recommended aggressively reducing costs and improving processes.

 

The Results

With Bain's support, FoodCo implemented the recommended initiatives, generating 15% cost savings and increased flexibility. The company also worked with Bain to put knowledge transfer programs in place so that the improvements would spread to additional plants in the system.

 

* We take our clients' confidentiality seriously. While we've changed their names, the results are real. 

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