A Manufacturing Company evolves into a Distribution Company.

Winning business strategy is about delivering what the market wants.

Lose site of the ball and the game is gone. An example of how a market can evolve into an animal with different spots – right under your nose.

1. Client Brief

The Need – ‘We have lost significant sales revenue, profit & market share across our business over a number of years. Where has it gone? Why have we lost it? How can we get it back?’

The Context – A highly profitable multi million-dollar Australian industrial market channel, traditionally dominated by big local players manufacturing locally & supplying hundreds of consumer & industrial goods manufacturers [B2B] via subsidiaries or through commercially aligned channel partners.

The marketplace which this channel supplies has evolved over the last 8 years, characterized by consistent innovation & increasing levels of competition in retail and wholesale from growing numbers of local and international competitors. Customers’ today demand new, different & better products, value added services, shorter lead times & lower prices.

2. Approach

  • Interviews & workshops to define competitive imperatives – value based prioritization
  • Granular segmentation analysis across products, markets, customers & competitors
  • Key customer identification & engagement to understand issues, needs, trends & commercial drivers, build relationships & capture insights
  • Competitive positioning & relative advantage of each player & product offer
  • Understanding of the size, composition, profitability & opportunity in each sub-segment
  • Strategic fit & attractiveness of customers & end use segments
  • Critical success factors in supplying each segment
  • Competitive model analysis & review – what business are we in?

3. Findings & Recommendations

  • Evolution of channel into a competitive billion-dollar market proliferated by competitors in multiple sub channels servicing thousands of customers with local & imported products
  • Channel growth of 80%. Client market share at 13% – down from 40%
  • Channel consisting of traditional & new product offerings with differing levels of attractiveness, value add, types of customers & buyer critical success factors
  • Mapping of significant increase in the quantity of customers & competitors, plus existing competitors growing & moving up the value chain
  • Mapping of significant value & margin flow changes across channels. Profits dependent on the position in the value chain
  • New competitive model & philosophy of doing business defined – service versus manufacturing
  • Competitive positioning & relative competitive advantage of client identified
  • Proposed competitive positioning & necessary capabilities for tomorrow defined
  • Strategic segment opportunities identified – products, customers, markets & channels

4. Results

  • Agreement & acceptance of strategic recommendations to re-capture market share
  • Proposed competitive model agreed & signed off
  • Proposed product, customer, market & channel positioning agreed & signed off
  • Incremental plus M&A growth strategy signed off & commenced
  • M&A targets identified, validated & captured
  • 5 year growth strategy agreed & commenced – target of 100% increase in market share