Challenges in creating and implementing a coherent commercial strategy is one of the key factors why cement companies do not always see satisfactory returns on invested capital. McKinsey highlights the five essential elements in developing a successful commercial strategy to help cement companies create value. By Patrick Schulze, Kedar Naik, Alexander Kaulfersch and Thomas Czigler, McKinsey, Germany.
Chronic underperformance in terms of returns on invested capital (ROIC) in the cement industry stems in part from structural factors such as large fixed costs and fluctuations in supply and demand. However, many companies also have trouble creating and executing a coherent commercial strategy. This is a substantial issue because, in many cases, it is one of the biggest nonstructural contributors to value creation.
