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 Johannes Messer

Johannes Messer

Owner, Johannes Messer-Consulting GmbH

Corona Crisis Foundries - Corporate Strategy as Key to Success

Author / Editor: Johannes Messer / Nicole Kareta

Due to the transformation in the automotive industry, the current industrial environment and the economic effects of the corona crisis, key elements of the corporate strategy have changed. The starting position, the market, internal and external drivers and success factors must be reassessed.

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The necessity of a corporate strategy is still questioned in many companies.
The necessity of a corporate strategy is still questioned in many companies.
(Source: gemeinfrei / Unsplash)

The existing challenges and the emerging transformation lead to changes with high relevance for the corporate strategy of foundries. Only if all stakeholders (shareholders, employees, banks, customers, employee representatives, suppliers, etc.) can be brought on board with the right corporate strategy can the opportunities be used and the risks minimized. This makes the corporate strategy an important lever for success.

Assessments Based on Scenarios

The assessment of the market (turnover, economic situation) as the dimension with the highest relevance to the corporate strategy currently poses great challenges for all experts. The sum of the unknown variables is too large at present to provide generally valid, reliable estimates. As a consequence, foundries have to develop the urgently needed strategy based on partly own hypotheses, which are derived from a best-, realistic- and worst-case scenario.

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Best Case Scenario:

  • The corona crisis has reached an end in the markets that are currently the most important for us in economic terms (China, USA, Europe).
  • The government economic stimulus programs are being extended to the automotive industry with additional incentives.

Realistic Scenario:

  • China continues at the positive level of April and May and has a positive impact on the other markets.
  • The government economic stimulus programs are having an effect.

Worst Case Scenario

  • There is a second major corona wave.
  • Trade conflicts continue to increase.
  • Brexit without a contract.
  • Stronger government pressure on the transformation in the automotive industry.

Identified changes and hypotheses must be evaluated in terms of their impact on key strategic areas (e.g. financing, technology, environment, etc.). Based on this, the individual key issues (e.g. securing liquidity, rheocasting, CO2 neutral foundry, etc.) are to be worked out and prioritized for the respective company.

Watch also our Webcast with the focus on international foundries:

Initiate Immediate Measures

The opportunities and risks identified in the strategy process often do not allow any delay in action. Parallel to the preparation of the corporate strategy, work should therefore already be done on the implementation of necessary measures identified at an early stage.

Interaction with All Stakeholders Necessary

The necessity of a corporate strategy is still questioned in many companies. Often there is a "corporate strategy" that exists exclusively in the head of the management. Considering the scope of the challenges currently facing foundries, this deficit must be urgently corrected.

In the future, only those companies will be successful which have implemented an organizational and operational structure to identify opportunities and risks at an early stage, convert them into necessary measures and implement them consistently (culture). A maximum successful implementation of the measures will only be possible in cooperation with all stakeholders. A corporate strategy is required to ensure this in the short and long term.

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