Operating strategy & cost

    Helping companies win by enabling margin improvement and ensuring effective deployment of resources

    KPMG’s Global Strategy Group (GSG) supports clients in identifying, quantifying, prioritising and delivering the changes required to align their operating model to their financial targets and strategic objectives. This approach, underpinned by the 9 Levers of Value, helps deliver timely improvement in performance and visibility and control for long term operating impact.

    With ever-increasing customer expectations, rapid market and technological change, disruptions from new entrants, increasing levels of regulation and reputational risk and growing shareholder scrutiny on performance, business leaders are being forced to continually re-evaluate their operational strategy, balancing short term cost improvements with long term change. The key question is whether organisations are optimised to deliver their business strategy and maximise shareholder value.

    There are a number of triggers which can often cause businesses to re-assess their operating model including:

    • Significant changes in market, competitive dynamics, and / or business strategy
    • Performance and funding gaps
    • Complex and inefficient operating model structures
    • Technologically or regulatory driven change

    The GSG helps clients to generate value by successfully aligning their operating model to their business strategy and financial targets by:

    • Identifying the changes required to align the operating model to the business strategy and financial targets, including challenging strategic decisions that are potentially value diluting
    • Developing and testing a range of alternative operating model options to identify the optimal solution for their business, balancing opportunity and risk identifying, quantifying and prioritising efficiency opportunities, to drive cost reduction and or free up funds for investment
    • Streamlining and aligning processes, organisational structures, management information, decision rights and incentives
    • Designing and sequencing a change program to successfully deliver the required changes

    The following case examples demonstrate how GSG’s operating strategy & cost approach has been successfully applied to real client issues.

    US $200 million in margin improvement over three years


    Set against the backdrop of a European slowdown, low growth in market volumes and a legacy of acquired country brand organisations, the European region of a global beverage company was struggling to meet the group’s margin growth targets.

    A team of GSG professionals was engaged to run a rapid value diagnostic, identifying significant margin improvement opportunities and operating model changes, providing the client with a three-year transformation program delivering US$200 million per annum in improved margins.

    Optimising an operating model, leading to US$500 million value improvement


    A global precious metal mining company faced challenging macro-economic conditions, an oversupplied market, cost inflation and a deteriorating competitive position.

    A team of GSG professionals was engaged to design an operating model to drive efficiency and alignment to market demand and strategic goals. The result was identification of US$500 million per annum in value improvement opportunities.

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    Contact the team

    Mark Collins

    Partner, Head of Deal Advisory

    KPMG in Ireland

    Michele Connolly

    Partner, Head of Corporate Finance, Head of Infrastructure

    KPMG in Ireland

    Alan Boyne

    Partner

    KPMG in Ireland

    Christopher Brown

    Partner, Head of Strategy

    KPMG in Ireland

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