Strategic Renewal for a Family-Owned Enterprise
|
Situation. A $200 million manufacturer of lawn & garden products faced increased offshore competition, concentrated customer power by big-box chains and resulting loss of profitability. The founder was at a crossroads in deciding whether a U.S. manufacturing base was viable, and if he had the leadership team to carry forward given his desire to withdraw from day to day oversight. C3 was engaged to conduct a strategy and operational audit of the company and to help the leadership team set a course for corporate renewal.
Actions. Conducted market assessments for the two major lines of business - commercial and retail. Evaluated the supply chain economics and modeled alternative offshore sourcing strategies. Assessed the product/service offering, customer/segment needs and profitability in the retail channel. Profiled the overhead structure and benchmark efficiency of administrative functions. Analyzed the operating model and performance of the European commercial business. Created and analyzed alternative strategies for each business and the corporate center.
Recommendations. Create offshore sourcing group, increase sourced product and rebalance U.S. plant loading. Add high end design product line. Obtain premium price relationship with largest big box customer by taking over “category management” role. Eliminate European commercial sales rep network and build own sales & distribution. Create independent management teams for retail and commercial sales.
Results. Offshore sourcing value doubled, cost reduction of 25%. Acquired new product line adding 30% to retail sales. Retained big-box customer share with a premium pricing for category management. Restored European and overall profitability within 12 months.
|
|