麦肯锡中远ProposalBuilding the worlds leading ship文档格式.docx
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COSCOShipRepairGroup
Proposal,version1
July,2001
Thedisclaimerappearsinthefooter.Thistextwillnotprint.
Memorandumto
Mr.ShiChong
Mr.LiDongmei
COSCOshiprepairgroup
ThankyouforthediscussionwehadonthechallengesandopportunitiesfacingCOSCOShipRepairGroup.Mckinsey&
CompanywouldbedelightedtohelpyoudefinethegrowthstrategythatwouldbuildCOSCOshiprepairgroupintothegloballeader.
Mckinsey&
Companyistheleadingmanagementconsultingfirmintheworld.Wehavedeepexpertiseinhelpingcompaniesdevelopsuccessfulgrowthstrategiesthroughouttheworld.WealsoaretheundisputedleaderinmanagementconsultinginChina,withunrivalleddepthofseniorresourcesandmultiyearprovenimpactofhelpingChinesecompaniestransform.
WeworkwithChineseleaders,suchasCIMC,oralsoLegend,ChinaMerchants.Finallywehaveadeepunderstandingoftheshippingandshipbuildingindustry,includingservinggloballeaderssuchasP&
OandDaewoo.Thusweunderstandyourcustomers,competitorsandkeyfactorsforsuccess.
Thisproposalisdividedintosixsections:
1)Contextandobjectives
2)Deliverablesofourcollaboration
3)Proposedprojectapproach
4)Workingarrangements
5)Financialarrangement
6)Mckinseyqualifications
Thismemorandum,theattachedhorizontalexhibits,thefinancialcontractandtheconfidentialityagreementformtogethertheformalpaperworkthatwillgovernourcollaboration.
Obviously,thisproposalisbasedonlyonashortinteractionwithyou.Wewouldbedelightedtoreviseoramenditafterwehavereviewedittogether.
1.CONTEXTANDOBJECTIVES
COSCOShipRepairstrongstartingbase
Inthecourseofitsoverallrestructuring,COSCOGrouphasintegrateditsdifferentshipyardsintoanintegrated“COSCOshipyardgroup”focusedonshiprepair.TheCOSCOShipyardGroup(CSG)hasastrongpositioninChina,whereitisaleaderinshiprepairwith15%marketshare.Italsohasstrongengineeringcapabilitiesthatcanbeleveragedforfurthergrowth.
ItcoversstrategicgeographicpositionsinChina(Dalian,Nantong,Guangzhou),closetothelargestshippingtrafficcentersofChina.Thesecorebusinessesarefacingdifferentstartingsituationsandchallenges:
¶
Nantong,ajointventurewithHongKong,isverysuccessful,with45MioRMBprofiton450mioRMBturnover,andhasstrongcapabilitiesinshiprepairandmajoroverhaulsforbulk,oilandcargoships.Atthesametime,ithasverylimitedpotentialforgrowthduetocapacityandgeographiclimitation.
Dalian,againaJVwithHongKong,isalsodoingwell,withaleadingposition(300mioRMBturnoverandcurrentlynoprofit)inNorthChinafordrybulkandcargoshipregion.Itspotentialforincreasedcapacityislarge.However,skillsarenotasdevelopedasinNantong.YouareexploringaJVwithSingaporetoincreasegrowth.
Guangzhou,,isthesmallestyard.Itcurrentlygeneratesabout150mioRMBrevenues.ItclearlyissmallversusthepotentialinSouthChina.
Inadditiontothisstrongstartingposition,CSGbelievesthatbeingtheleaderinChina,ithassubstantialstructuraladvantagesitcouldleverage:
ChinahasalowlaborcostbaseandshippinginandoutofChinashouldfurthergrow,thusincreasingtherevenueofshiprepair(Exhibit1).
Challengesahead
However,atthesametime,CSGisfacingmanychallenges:
Currently,thebusinessismostlyfocusedonlowvalueaddedlaborintensiveactivities,whichcouldbethreatenedinthefuturebylowercostcountriessuchasVietnam,orPakistan.Inaddition,CSGisneitherorganized,norhastheskillsyettomovetomorevalueaddedactivitiessuchassystemoverhauls,ormachinerebuilds.
OvercapacityintheChineseshipbuildingandshiprepairindustryishuge,withover1000yardscompetingforthesamelowvaluejobs.Evenbeingtheleader,CSGisstillrelativelysmallandneedstodefinewhetheritshouldshapetheindustryrestructuring.
Theindustryishighlycapitalintensiveandearnsonlylowreturnoncapital.CSGneedstofigureouthowtomaximizereturnoncapitaltoreachworldleaders’levels
CSGisalreadydoingthelargemajorityofitsrevenuewithforeignships.However,itisstillasmallplayer,onaworldwidebasis.Whileattractiveatfirstglance,itisnotclearwhereandhowcanvaluebecreatedfrombeingaworldplayer.
CSGhasonlybeenrecentlyformed.Atthismoment,thedifferentshipyardsarestilloperatingasindependententities,withtheirseparateP&
L.CSGneedstodefinewhattheintegratedstrategyshouldbeandtheorganizationtodeliverthisstrategy.
YouhavehighaspirationtogrowCSGtoaworldplayer.Atthesametime,youneedtoaddressthesechallen