Business Strategy Solutions – Case Studies
Mapping your road to success – foundation, vision, planning
| Problem: |
Stagnant sales |
| Objective: |
Grow the business with profitable sales |
| Background: |
The business had been generating the current level of sales for some time. Whilst profitability was not low, it could have been higher and the CEO/Owner wanted a solution which would see the business able to be sold for a good price in 5 years time. |
| Assessment: |
Many businesses go through what is a trading rut – nothing seems to change and no matter what is done to effect change, the business always seems to revert to the status quo. |
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| Problem: |
Where will we be in 5 years time? |
| Objective: |
Implement a growth strategy which is reflected throughout the organisation |
| Background: |
The business had been in operation for over 10 years and the Owner/CEO was in his mid 50’s. The business had been successful but it was not set up to operate without the Owner having a hand in the day to day issues of the business. Upon reflection, the owner knew that he needed options for both the business and himself so that he could look at other options if he wanted to. |
| Assessment: |
This story is very typical of businesses in today’s post baby boom economy. There are many business owners who need to pro-actively develop options for themselves and their business. It is not that they are not thinking about the issues. It is just that they don’t have the impetus to put in place strategies to resolve what can often be difficult issues to resolve, especially when dealing with all the day to day stresses of business. |
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| Problem: |
Business making significant losses |
| Objective: |
Stem the losses and turnaround business performance quickly |
| Background: |
A private equity investor had acquired 40% of a family company which manufactured food products in the confectionary industry. It was loss making at the time ($6M pa) and its turnover was in excess of $35.0 Million. |
| Assessment: |
An initial assessment indicated the business had many unprofitable products and unprofitable customers and also, unprofitable distribution channels. The business had a history of major problems with OH&S and EPA compliance as well as the production and sale of substandard product including metal contamination issues. As a family owned business, the culture was not one conducive to constructive and open management. |
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| Problem: |
No orders in the pipeline, costs continuing to be incurred each week. |
| Objective: |
Stabilise performance and generate orders for future business. |
| Background: |
The business was located in Michigan, USA. It designed and built extremely high tech bespoke capital equipment used in the automotive and airline industries in the manufacture of diesel engines and jet turbines. Whilst its products were used in other applications, this had been the main focus for the past few years. It was a business which suffered the swings and roundabouts of the US market in these two industries. In 2001, there was a large downswing in progress. |
| Assessment: |
A number of problems were identified:
The build time for the capital equipment was too long – (32 weeks) and cash flow payments did not match the timing of costs being incurred, resulting in negative cashflow during the build cycle.
Management had excellent engineering skills but limited understanding of the business dynamics caused by their negotiations with customers.
The value proposition for the customer was not clear. Too often bespoke solutions were offered at insufficient return for risk and time, particularly when new solutions had to be created to meet a particular customer’s needs.
The cost of time delays was not factored in to the costings or variations.
There were potentially profitable areas of the business in after sales service and machine upgrade/replacement which were not being actively nor strategically pursued.
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