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Enabling global cost-competitiveness

tl_files/case_studies/pic_5.jpgEngagement Rationale: We advised a leading U.S. wood products manufacturer in establishing a sourcing network and a greenfield operation in China. The Client is the world’s largest manufacturer in its line of wood products. However, it had seen its market leading position increasingly threatened by Chinese upstarts. We developed and executed a custom-tailored China entry strategy for the Client.

Phase 1

Our team conducted in-depth research of the China market for our Client’s products. We identified key competitors and analyzed their business models and cost structures vis-à-vis our Client’s. We performed a preliminary screen of potential sourcing and manufacturing partners that fit the Client’s specific requirements. Finally, we developed various strategic options for the Client to enter the China market.

Phase 2

We hosted a visit to China by the Client’s CEO to further “kick the tires” and to conduct due diligence of potential partners. We also assessed potential sites for the greenfield factory. With the Client, we developed a final recommendation to the Board of Directors for the Client to enter the China market through a two-prong strategy. The recommendation was unanimously approved.

Phase 3

Our team negotiated exclusive supply agreements with finished goods and in-process raw material suppliers. We selected the greenfield factory site and secured special incentives from the local government. We served as the Client’s team on the ground in China overseeing all aspects of sourcing execution and greenfield set-up.

Phase 4

We developed a network of in-process raw material suppliers to ensure steady, volume production for the greenfield factory as well as for export to the Client’s U.S. factory. Our team deployed manufacturing experts to the suppliers’ factories to oversee production, inspection, packaging, and logistics.

With our help setting up a sourcing network and manufacturing base in China, the Client is able to offer the broadest product offering and lowest cost for its products.