$1B+

UK-Based Semiconductor Manufacturer

(“Semi Co”) wants to Improve Gross Margins priorto likely Acquisitions talks with Strategic Buyers

50%

of Business Run through DistributionChannel and 50% is throughOEMs/EMS Manufacturers.

~65%

65% of Product Portfolio is Proprietary; 35% is Competitive.

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Critical Questions

How do we improve
Gross Margins?

  • What is the full potential gross marginof the Semi Co portfolio?
  • What pricing strategies, pricing processes,tools and KPIs need to be implemented bychannel to capture the value?
  • What changes should be implementedto pricing contracts?
  • How should the organization be structured with roles and responsibilities?

Answers and Outcomes

  • Data Driven Analytics pinpointedProducts and Customers where Prices were Too Low
  • New Process Definition and PricingStrategies (contract, spot quote, distribution)
  • New Global Quoting Tool to Deliver Dynamic Pricing to Customers based on New Strategies and Criteria
  • New Global Pricing Team to Implement BU Strategies
  • New KPIs to Track Discounts, Compliance, and ASP Changes
  • New Ship, Stock, & Debit Tools and Processes

Complications

  • Few Standard Practices and Policies in Pricing w/ Low Ability to Change Prices Quickly
  • No central repository for discounts or other margin waterfall subtractors
  • Customer pricing contracts negotiated by sales with minimal oversight

$30M+

Upside Gross Margin Value Identified and Realized in Only 12 Months

(8.3% of $360M Gross Margin Pool) using Regression Analysis (by device, by channel) and using Monte Carlo simulation