Services
Deals
Industry
Transportation and logistics
Our role
Business and corporate strategy review
Driving business optimisation with data driven decision-making
PwC assisted a pan-African transport and logistics business to help diagnose the root cause of underperformance using data and analytics to drive better decision making.
Issue Issue our client needed to solve for
The Client is a pan-African player in the transport and logistics sector, with an underperforming business in Southern Africa, who wanted to understand the in-country challenges and how to address them.
- The Client offers logistics services to principals and aims to reach the maximum number of customers with the widest range of products. However, the country’s economic climate does not lend itself to this business model
- Challenging economic conditions put severe pressure on businesses which are not able to pass on the cost of doing business in the country
- The Client’s in-country operations are highly dependent on, and impacted by, service agreements with principal suppliers and, in recent years, principals placed increasing pressures on the Client’s margins
The Client’s challenge was to assess whether the root cause of their underperformance stems from a misaligned business model, versus uncontrollable local market dynamics, or a combination thereof. Additionally, their challenges made it increasingly difficult to assess whether their strategic initiatives would have the desired impact on their business turnaround plans.
Our role has been to build trust and deliver sustained outcomes with deep insights into the Client’s business and strategic objectives. We assisted in providing data driven insights into the business and the Southern African macro-economic environment. We have helped our client to understand the strengths and shortcomings of their business model, as well as their planned strategic objectives, to enable business optimisation and ultimately generate enhanced returns for shareholders.
Solution Our solution for our client
PwC performed an independent review of the corporate strategy, and a data driven review of one of the client’s Southern African businesses.
PwC started our engagement by working with management to gain a full understanding of their business and strategy, including the key initiatives included in the turnaround plan, and understanding the root causes for the business’ underperformance.
After we understood the Client’s challenges, we formulated several hypotheses with management and sought to solve these problem statements using data-driven insights. This process included:
- Preparing a summarised overview of the local logistics industry in the context of the broader market and competitive dynamics;
- Reviewing select historical financial information at a transactional level, which provided insights in respect of:
- The key drivers and challenges in the logistics industry;
- The margins and profitability per principle, product and branch/region;
- Management decisions made based on agreements with principals, and the financial impacts thereof; and
- Key KPI’s relating to working capital and foreign currency management. Leveraging the insights gained through the above market and principle analysis, PwC reviewed management’s strategic initiatives and assessed the execution risk and strategic fit of these initiatives; and
We provided our observations and recommendations in relation to strengths, weaknesses, opportunities and threats, including identifying any quick wins to improve the current performance.
Impact The impact our solution had
PwC was able to show the Client how deeper insights and ultimately better business decisions can be made by analysing and managing their business per principle. PwC demonstrated this by using the Client’s historical source data, at a transactional level, and identifying data trends, using our market leading data analytics tools.
Subsequent to our engagement, the Client leveraged the insights and data analytics tools to supplement and inform their current business intelligence upskilling, with the aim to improve decision making.
As the market leading practice in Africa, and as part of the largest Capital Advisory and Restructuring practice in the world, our highly experienced and diverse team provides support to clients across Africa, in delivering data driven insights into their business, supported by robust strategy reviews, to enable optimisation and value creation.
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