An Introduction to RPS Downstream Lubricants Practice. January 2015

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1 An Introduction to RPS Downstream Lubricants Practice January 2015

2 Who are RPS? RPS Group FTSE 250 company with a turnover of $700m+ employing over 4,000 employees Energy Environment Health & Safety Infrastructure RPS Energy operates globally and is one of the world s leading suppliers of independent commercial advisory services for the energy sector Operations Support Technical Studies Commercial Advisory Emerging Areas RPS Downstream has assembled a team of 50+ sector specialists who have extensive practical business experience across all elements of the Downstream Value Chain Exploration & Production LNG Downstream Clients include Governments, National Oil Companies, Integrated Majors, Independents, Financial Institutions

3 The Downstream Offer SPECIALIST PRACTICES Refining, Trading & Supply Commercial Fuels & Specialties Lubricants Retail OPERATIONAL OPTIMISATION Offer & Pricing Development Brand & Marketing Organisation & Capability Supply Chain HSSE STRATEGY DELIVERY Market & Competitor Analysis Strategic Planning & Option Generation M&A and Business Integration Support Strategy Implementation Market Entry Support

4 Our Lubricants Practice spans the entire value chain Additives Base Oil Packaging Finished Lubricant Branding Marketing Distribution Customers & Channels Agriculture Retail Distributors OEM Workshops OEM Direct Ind. Workshops Forecourts B2B (Industrial) B2B (Transport) Manufacturing Marketing Sales Assessing working capital and inventory management processes to identify sustainable efficiencies Product line simplification to reduce complexity in operations Operational assessments (incl. HSE and Quality) to identify efficiency and compliance opportunities Using market insight to help deliver market winning products and service offers Brand, marketing and strategic reviews using targeted research to deliver actionable plans Critically assess revenue expenditure vs. performance and optimise expense Analysing customer segmentation and channels-to-market to deliver robust account management processes Pricing strategies and efficient cost to serve models Developing performance management solutions within an integrated process 4

5 Our Lubricants Team Stuart Speding Director, Downstream Consulting 20+ years senior operational and strategic experience working across the downstream Significant exposure to both developed and developing economies Key expertise: strategy development, business transformation, branding and marketing Frank Rouwens Head of Practice Senior business leader with deep operational experience working for Castrol and Valvoline Experienced in working across multiple countries around the globe Key expertise : operations management, strategic planning, business development John Sargeant Principal Consultant Senior manager with 30 years global strategic and marketing experience in lubricants Far East, US and London-based with exposure across the lubricants value chain Key expertise: new market development, building winning teams, M&A, strategy development John Allan Principal Consultant Technology background with 30 years experience in lubricants and fuels at Mobil, BP, Castrol Much of career in product R&D, with senior roles in business development and B2B marketing in EU and US Key Expertise: product technology, business strategy, B2B marketing, OEMs 5

6 Some Examples Lubricants Brand Positioning and Pricing Strategy Business Expansion Strategy To maximise value extraction from their chosen focus markets and sectors, RPS designed and executed market evaluation and strategic value mapping programme on behalf of a global lubricants player to assess their current perceived positions on brand, cost, quality, and pricing in end consumer market Output included value propositions, pricing strategies and an aligned brand positioning RPS then developed clear brand strategies based on its Brand Evaluation Framework to help the client grow their market and margin shares in line with their desired brand positioning and sector aspirations Following the completion of an in-depth market assessment RPS identified potential opportunities to access new high value segments and customers for our client Acting as trusted advisor, RPS has developed a strategic business plan which includes an option to leverage the complementary strengths of the two major global lubricants brands and form a winning JV Market Entry Strategy Delivered a detailed review of a potential material new market for a global lubricants player, covering market characterisation, pricing and margin analysis, and competitor analysis The study concluded with recommendations for the highest value segments to enter and the most appropriate goto-market approach Further work confirmed strategic segments of choice, value propositions, route to market models, price positioning and brand destination statements Business Organisation Strategy With the NOC client seeking to re-organise and transform its downstream operations to improve returns, RPS acted as subject matter expert (SME), providing leading specialist knowledge and expertise to formulate a new market strategy and organisation 6

7 Case Study : Bringing clarity to brand positioning SITUATION Global lubricants company seeking to re-visit and re-energise its brand in one of its mature regions in order to underpin value proposition development RPS interviewed key stakeholders within the organisation and tested perceptions in the market Options developed, sense checked and benchmarked against competitor set Final destination statement embedded in organisation OUTCOME Organisation engaged behind brand positioning delivering clarity and focus to sales planning, identification of non-core activities and strategies developed to migrate/manage. 7

8 Case Study : Maximising access to the margin pool through a strategic partnership SITUATION Major domestic lubricants brand in a developing economy looking to increase sales and access to the higher value margin pools A detailed market assessment identified a number of attractive segments that the brand was excluded from based upon customer perceptions Initial thoughts were to invest in capability and marketing activity International brands established in market and seeking to increase their share through distribution but retain premium positioning Initial plans involved extensive distributor recruitment Through a strategic relationship both brands able to achieve significant growth objectives whilst maintaining brand positioning OUTCOME Negotiations in final stage ahead of comprehensive market launch on what is projected to be a $100m JV within 3 years and a payback within 18 months 8

9 Case Study : Delivering insight in order to build credibility and change the relationship dynamic SITUATION Major supplier to lubricants industry seeking to see through its customers eyes in order to develop relevant and topical product and service propositions RPS analysed the market to identify the key trends and impacts on demand Areas of interest were identified and subsequently RPS supported a workshop through which the supplier engaged with end users and as a result identified needs and opportunities OUTCOME Supplier able to identify emerging segment needs and demonstrated credibility with their clients. Value proposition and product development based upon supplier insight underway within a global lubricant player with Suppler viewed as a commercial partner rather than technology provider 9

10 Three underpinning drivers of Lubesco. strategies today: Does your strategy cover them? MINIMISE COST MAXIMISE IMPACT Additives Branding Base Oil Finished Lubricant Sales & Distribution Customers & Channels Packaging Marketing OPTIMISE OPERATIONS

11 RPS Energy - Downstream 14 Cornhill London EC3V 3ND United Kingdom T: +44 (0) F: +44 (0) downstream@rpsgroup.com UK USA Canada Australia Malaysia Singapore Russia UAE