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Case Study Project Description

This California based company made doors. Doors are a dime a dozen. They are made from wood or metal or composite woods. There is not a lot of ability to price a door any differently than competitors. The manufacturer of doors also has to produce a high volume to make enough profit to make it worthwhile. Can a small manufacturer do anything to make their product stand out in the marketplace?

Project Problem

The door manufacturer made doors from recycled construction materials. He had developed a special method of process the waste material and purchased unique manufacturing equipment from Europe to press the material into doors. But would the market care? How was he going to get into Home Depot and Lowe’s to sell the doors? How could he get distribution into the market place? Could he get a regular source of material to make the doors?

Solution

The stark reality of the situation was that this manufacturer of a single product would not have much success trying to sell a door with unique properties into the consumer distribution system. While the owner was convinced that his recycling activity would help the environment and employees all thought they were contributing to something worthwhile, there was nothing about this fact that would cause buyers to spend more to buy his door over a competitors door. Was their another way to look at the market place.

Rather than attempt to find traditional distribution methods, we looked at who had waste streams similar to the door manufacturer’s raw materials, cared about the environment and already had a distribution channel that these unique doors could be easily sold through but they did not have a door in their product line. We found three potential partners through this method of looking at the marketplace.

Each of these partners had the potential to sell high volumes of the product. It would mean that the manufacturer would only be making the product, not selling it any longer.

Result

We brought the owner to three meetings with these potential partners. Unfortunately, the owner chose not to enter into a distribution arrangement where he would make the doors for them as he found their first price unacceptable and was unable to keep the relationship going well enough to establish a basis to do business. It takes a re-orienting of expectations and an ability to have difficult to discussions to manage joint venture relationships. Ultimately, if the company is unwilling to change how they do business to meet the needs of partners or customers, potentially lucrative target markets become unavailable to the company.

Case Study Project Description

Port Townsend is a smaller paper mill that was in the process of converting to completely recycled feedstock (in order to remain competitive), to make Kraft Paper and other value added products in. Their goal was to find higher value applications for the paper they made to get out of the commodity business and to become much more environmentally responsible. They were looking for ways to find new product opportunities that would position them as the first mill to use 100% recycled content material for paper.

Project Problem

The biggest challenge was to find product applications that had secure market niches, little competition and large volume potential since paper mills make product by the ton. We suggested going to technology sources like Battelle National Labs and developing some industry discussions with potential strategic partners who could participate with Port Townsend in developing new products.

Solution

Battelle Labs has a mandate from the US Department of Energy to focus on what the pulp and paper industry should become in the future. They take two approaches to help companies like Port Townsend Paper:

Discover what products are possible given the state of certain technology and processes that they have identified in their research

Present market-driven ideas for products that they have determined will solve a problem or be in demand in the future.

In return, they want to be able to share the market information that we and Port Townsend Paper brought to the process with other clients and other Battelle research areas. Their goal was to create new products that solve current problems affecting many environmental, economic and social issues.

Battelle arranged a meeting with nine different scientists at the lab. We generated nine different product opportunities, all of which would require research funding from Port Townsend for work to be done. Many of the options were for agricultural markets. Port Townsend decided to do some research on potential market opportunities for such products before they funded any technical research

We put Port Townsend Paper in touch with another client, Global Warming Research & Development Corp. (GWR&D) to see if Kraft Paper could be used as a soil builder and moisture retention system for planting trees in the desert. Another meeting with Battelle was scheduled which included GWR&D to discuss the theory and get more information on desertification problems. The results of the meeting proved that the paper would be a good application for this use.

Results

We explored the competitive market for molded pulp packaging. We found the non-toxic adhesive products they can license for developing a new paper masking product for selling through Home Depot. Port Townsend signed an agreement with GWR&D to supply paper for their test trials of their watering technology for use in solving desertification problems. We helped them do trials on gift wrapping and molded pulp packaging. Eventually they were able to produce packaging, high end shopping bags and recycled-kraft paper and today are an environmentally sophisticated paper producer reclaiming millions of tons of paper from the waste stream.

Case Study Project Description

The company had built its reputation on appliances, cookware and consumer durable goods. When a conglomerate bought them out, the senior leadership team left. The remaining managers were expected to determine how to pare down the product line and increase profits.

Project Problem

The remaining managers had never had to work through a downsizing exercise. They had been selected from middle management and put in a difficult situation to turnaround the company. Distributors relied on the huge variety in the product line to differentiate themselves in the market. When they heard their favorite products were going to be eliminated, they were told to step up sales or lose the line. The team needed help and guidance in how to execute this strategy without alienating their distributors and each other.

Solution

The team need to learn how to collaborate before they could discuss the new strategy. Times were difficult, tempers short, and this group had never worked together before. Not only did they not know how to have difficult conversations, each person was representing their functional area as not needing to change but other functional areas would have to change to meet the new requirements. Sales did not visit the Manufacturing floor, Marketing did not work in alignment with Sales, and Accounting did not track Gross Margin for any of the departments.

We worked simultaneously on clearing unfinished business between the individuals, acknowledging the difficulty of the situation and getting them to phase that all aspects of their company functions had to change including their own, in order to gain them the profitability they needed. Using their own experience of how difficult change can be helped them to understand their Distributors mind set and how to work through the inevitable show downs that were coming.

Result

Paring the product line down from 200 line items to 30 with the best gross margin took six months. Working through all the distributor conflicts, took another six months. The team would learn to work with our Smart Team tools to help them strategize which products and what approaches they would take to work with the distributors. Instead of leaving the difficult conversations to the Sales VP, because that was his job the team worked together to support the VPs work and they visited distributors in teams. When the manufacturing floor struggled with the line change, the Sales VP would go with the Manufacturing VP and communicate the market needs as well as acknowledge the struggles on the factory floor.

Within two years of the acquisition, the company had become profitable enough that the conglomerate chose to sell them again for a profit. The team felt proud of their accomplishment, meeting the time line of their investor and the needs of the market place.

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