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Our client, a leading player in the chemical sector, was facing declining sales in Europe. This triggered several critical questions from the management team. They needed to determine whether the overall market was in decline or if the drop in sales was specific to their customers and end-markets. Furthermore, the company was grappling with increasing regulatory pressures and sustainability initiatives that were eroding the profitability of their traditional customer segments.
Key Management Questions:
• Is the overall market shrinking, or are we aligned with the wrong customers and end-markets?
• Are there growing segments or opportunities in other end-markets driven by sustainability and regulatory shifts?
• What is our right-to-win in these emerging markets, and how should we reposition ourselves to capitalize on them?
• How effective is our current network and product portfolio in supporting growth?
• Which opportunities should we prioritize, and how should we structure our network and portfolio investments to support this strategy?
The complexity of the challenge was rooted in the confluence of multiple disruptive forces, each impacting the client’s business in different ways:
• Market Fragmentation and Uncertainty: The chemical industry spans a vast range of verticals, from agriculture to consumer goods to manufacturing. Each of these segments was experiencing uneven growth, driven by different macroeconomic factors. Some sectors were growing, while others were stagnating or shrinking, creating a fragmented outlook across geographies and verticals.
• Fragmented Competitive Landscape: In this environment, the competitive landscape was highly fragmented, with geographical presence often dictating the right-to-win. Competitors with stronger local networks or regulatory advantages in specific regions were better positioned to capture market share, making it crucial for the client to evaluate its own geographical footprint. Understanding where competitors had a stronghold and where gaps existed was essential to assess the client’s competitive positioning.
• Regulatory and Sustainability Shifts: Increasing pressure from regulators and consumers around sustainability had disrupted traditional markets, especially in sectors like automotive, construction, and packaging. This meant that some of the client’s largest end-markets were becoming less viable, while new, regulation-driven opportunities were emerging. The challenge was to understand where sustainability trends were creating growth vs. creating obstacles.
• Internal Alignment and Right-to-Win: Internally, the client needed to understand whether their current sales and manufacturing capabilities were aligned with future growth opportunities. Were they investing in the right segments and regions? Did their network and product portfolio reflect the areas where they had the best competitive edge? They needed a clear path forward to identify where they could best compete and where to allocate resources for long-term success.
The crux of the complexity was not only identifying new opportunities but also assessing whether the client had the internal capabilities and market position to succeed, especially in regions where geographical presence and regulatory dynamics played a key role in shaping the right-to-win.
1. Built a Granular Market
We developed a detailed 80/20 market model, identifying the most relevant companies and plants by vertical and region. This model combined external data with internal sales insights to highlight key segments where the client could focus their efforts. Importantly, we integrated sustainability and regulatory trends into this model to map potential growth areas and align the client’s portfolio accordingly
2. Assessed Growth Hypotheses by Vertical and Region
Leveraging extensive secondary research, we evaluated historical growth drivers and future outlooks for each vertical and region. Our analysis also incorporated emerging sustainability related shifts, such as green chemistry, and identified where these trends were opening up new opportunities.
3. Created a Market Heatmap for Prioritization
We synthesized all this intelligence into a comprehensive market heatmap, categorizing opportunities as high, medium, and low-growth across both verticals and geographies. This gave the client a clear, visual understanding of where to focus their resources
4. Conducted a Right-to-Win Analysis
We then conducted a thorough right-to-win analysis, comparing the client’s capabilities against their competitors in each prioritized segment. This analysis helped identify which areas they could realistically dominate and where additional investment was needed to build a stronger market presence.
5. Aligned Network and Portfolio with Strategic Growth Opportunities
Finally, we evaluated the client’s existing network and product portfolio against these growth opportunities. This allowed us to offer recommendations on optimizing their network footprint and ensuring that their product offerings aligned with the most attractive market segments.
Our approach delivered immediate clarity for the client:
• Identified High-Value Growth Segments: Through the granular market model and heatmap, the client gained visibility into the end-markets that showed the highest potential for growth, allowing them to focus their efforts on the most promising areas.
• Optimized Right-to-Win Strategy: The right-to-win analysis enabled the client to see where they had a true competitive edge, giving them confidence in pursuing new opportunities while guiding where investments were needed to strengthen their position.
• Aligned Network and Portfolio with Future Growth: By assessing their network and portfolio through the lens of sustainability and regulatory trends, the client was able to make informed decisions about future investments and prioritize resources towards high-potential markets.
In sum, our analysis not only helped the client address their declining sales in Europe but also equipped them with a strategic roadmap to align their internal capabilities with the highest growth opportunities, setting the stage for sustainable, long-term success.
