Portfolio Growth Strategy - Individual stategies per portfolio unit as growth motor

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Stern Stewart & CO. GmbH
Salvatorplatz 4
80333 Munich

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Background

An ambitious growth target for the entire portfolio and a number of heterogeneous portfolio units, something which is not an easy task in the changing healthcare market. On global healthcare markets demographic developments such as the increasing aging population in Europe and North America hold out the prospect of great opportunities for manufacturers of medical products. Then again, the increasing pressure on public healthcare systems is leading to even greater cost cuts and more intense competition.
The client’s starting position was characterized by the lack of a recurring strategic theme. The decentralized structure of the company coupled with the widely varying competitive situation (caused in particular by a country-specific regulation) presented a fragmented picture with numerous isolated solutions.
In light of this, the target was to develop individual strategies together with our client for the heterogeneous portfolio units and to merge these into the overall context of the growth target for the entire portfolio.

 

Project Approach

A general strategic framework at the portfolio level defines the guidelines for the strategy development at the portfolio unit level.

Based on the general strategic framework developed with group management, tailored individual strategies were established for each portfolio unit. To this end, organic and inorganic growth options were collected in a multidimensional radar chart that reflects potential. The identified options were discussed, prioritized and improved while taking into consideration all angles of the portfolio unit, meaning the division, product and country angles. The result is an ambitious yet realistic growth roadmap for every portfolio unit.

Finding – The effort involved in preparing individual strategies for each portfolio unit is considerable but well worthwhile. The one-size-fits-all approach does not work for a portfolio comprised of heterogeneous units and inevitably leads to inefficiencies. A reflected comparison of the management team via the three perspectives division, product and country has proven especially helpful when it comes to identifying the strategic theme. It is important to move those involved in the discussion away from their, in part, very operatively driven thinking towards a strategic and more all-encompassing view with sufficient foresight. Regularly repeating or updating the strategy process promises to establish strategic thinking over the long term.

 

 

PROJECT RESULT


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