Diversification "out of the box" - Roland Berger

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ClientCo has to decide on one coherent model for its corporateholdingOperatorStrategic controllerStrategic architectPortfolio investor> Central managementof all criticaldecisions> CEO as "generalmanager"> Direct involvement inbusiness> Add value by runningthe business well> Central managementof key functions,especially technical> Centralization tocapture full value ofsale benefits> Beyond thesefunctions, businessunits maintain fullaccountability> Central control in afew key functionssuch as Finance,HR, etc.> Add value by– Driving betterstrategies– Setting moreambitious targets– Developing stron-ger management> Central capitalallocation> Add value by– Structuring cheapfinance– Buying businessescheap, sellingexpensive– Appointing the bestpeople to run thebusinesses inbetween> Singapore Airlines> Coca-Cola> Newell> Ford> Hutchison Whampoa> General Electric> KKR> Berkshire HathawayClientCo?Source: Roland Berger44
ILLUSTRATIVEThe role of the corporate parent has to be detailed alongseveral dimensions1Goal/target basedIssue based2Bottoms-up, decentralized d Top down, centralized3BU/function drivenCross-BU/function driven4Periodic, structured Ongoing, event driven5Standardized, templatedTailored, distributed6Tight plan/budget Loose plan/budget78910Data intensiveForecasting/trendsPassive, loose monitoringFormal communicationOption 1 Option 2 Option 3Judgment intensiveScenariosActive, tight monitoringInformal communication45
Page 1 and 2: Diversification "out of the box"Mun
Page 3 and 4: A. OUR APPROACH -A structured conce
Page 5 and 6: Our modular approach consists of fo
Page 9 and 10: 1.1A proper bottom-up portfolio seg
Page 11 and 12: 1.1BACKUPWrong business definition
Page 13 and 14: 1.3 EXAMPLEThe definition of core b
Page 15 and 16: 1.4ILLUSTRATIVEPortfolio options sh
Page 17 and 18: 1.4ILLUSTRATIVETop-down targets for
Page 21 and 22: 2.1BACKUPThe portfolio logic need t
Page 23 and 24: 2.2ILLUSTRATIVEThe arithmetic for v
Page 25 and 26: 2.2EXAMPLE"Underperformer" business
Page 27 and 28: 2.3RELATED DIVERSIFICATIONIdentifyi
Page 29 and 30: 2.3RELATED DIVERSIFICATIONOdds of s
Page 31 and 32: 2.3RELATED DIVERSIFICATIONIdentifie
Page 33 and 34: 2.3RELATED DIVERSIFICATIONIndicator
Page 35 and 36: 2.3UNRELATED DIVERSIFICATIONConglom
Page 37 and 38: The ability of the holding to contr
Page 39 and 40: Successful organizations design a c
Page 41 and 42: … that vary by the adopted modelO
Page 43: BACKUPResources needed at the cente
Page 47 and 48: EXAMPLEAustralian conglomerate Wesf
Page 49 and 50: E. ROLAND BERGER - Our experienceRo
Page 51 and 52: Excellence in strategy consultancy
Page 53 and 54: Our expertsHauke MojePartnerFlorian

Diversification "out of the box" - Roland Berger

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