Component Maker Boosts Liquidity, Sets Stage for Growth with Strategic Portfolio Cleanup
A component manufacturer has enhanced its liquidity and set the stage for growth by streamlining capacities and focusing on sustainable areas. This move follows a strategic portfolio cleanup process, crucial for many SMEs seeking to protect their capital base and maintain independence and agility.
Many SMEs face growth challenges despite profitable operations due to underutilized resources and underperforming products or locations. Establishing a regular portfolio review allows businesses to adapt location structures, use capacities more efficiently, and open up new growth opportunities. A clear roadmap and external experts can help overcome barriers like differing shareholder interests and emotions.
The choice of route in portfolio cleanup depends on the company's needs. This could involve investors, partnerships, or relocating capacities. A practical test, such as adjusting prices or product variants selectively, can validate the need for strategic realignment before making significant changes. Preparation is key to successful implementation, including complete documents, risk elimination, and early involvement of key personnel. The first step is collecting reliable key figures, like contribution margins and utilization rates, to identify underperforming areas. In uncertain markets, targeted portfolio cleanup can provide quick and effective responses before challenges escalate into restructuring pressure.
The component manufacturer's portfolio cleanup has improved liquidity and positioned the company for further growth. By making this a recurring management process, SMEs can protect their capital base, maintain independence, and stay agile in uncertain markets.
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