Klöckner & Co SE - Evaluating digital transformation (Teaching Case)

Gisbert Rühl, the Chief Executive Officer of Klöckner & Co, one of the world’s largest producer-independent steel and metal distributors, led the company through a decade- long transformation process from antiquated steel distributer to digital pioneer. The transformation of KCO included the creation of the venture XOM Materials, a business- to-business materials trading platform, with the vision of becoming ‘the Amazon of the steel trade’. However, despite the company’s grand efforts at digitalization, no significant performance impact is visible as of May 2021. Revenues and profits went down, and the share price dropped by 20%, from 13.49 EUR on 2nd November 2009 to 10.91 EUR on 12th May 2021. The case opens in May 2021 after the annual meeting. Following his stepdown as CEO, Rühl asks: Was the digital transformation of KCO under his leadership a success? For whom (e.g., stakeholders), if at all, did the decade-long transformation create value?