Contract Manufacturing
The corporate management of a leading semiconductor manufacturer had been at odds for years over what to with its contract manufacturing services business. The business had consistently failed to deliver on financial commitments and would require additional investment to keep up with competitors. However, the CEO strongly believed that the business’ manufacturing capabilities were valuable to the corporation.
SDG was engaged to work with a very senior corporate team to resolve this deadlock. We analyzed the dynamics of the industry and quantified the risk/return profiles of the company‘s alternatives: grow, maintain, or sell the business.
This effort resulted in a clear understanding of the drivers of upside and downside uncertainty for each alternative, and this enabled top management to commit to a decision to divest the business. As a result of strong organizational commitment, the execution was fast; a sale to a large competitor was completed within six months.
