Client: Very large international shipping and oil based Group, but also a successful conglomerate active in many fields such as retailing and manufacturing industries. Wanted to exploit the potential — if any — of its relatively small supermarket chain (then 50% owned, later 100%), or close down participation.
Situation: Locally important chain with zero growth and negative profit ratios. Assumed –but not exploited– growth potential. Strategy discussed without obtaining agreement with co-owner and local management. Key owner wanted to find out and implement opportunites via proper analysis of opportunities, and later through short-term line management by Business Strategy BS AG.
Issue: How take advantage of likely accellerating retail concentation in the country, through repairing current company situation and thus possibly laying the groundwork for substantial growth in new, very large retail markets locally and internationally.
Study: Business Strategy BS AG identified strengths and weaknesses of chain and each retail unit plus local managements and organization structures. Identified short-term profit improvement possibilities through repricing and greater concentration on selected product groups.
Findings: Our firm identified market and specific product segments with particular profit potential. Found weaknesses that could be remedied already in the short term. Checked suitability of current market managers and sub-managers through highly effective personal test system (Predictive Index – PI) and found most managers of less quality and business orientation than needed.
Solutions: Substantial price drops in product groups particularly noticeable by consumers, strengthed marketing of new offers. Price increases (by just 1%) in other less competitive product groups. Fast replacement of weak local managements through clearly more target-focused people. Closer supervision by owner HQ. And given good and fast results in present chain, to embark on very major establishments of large hypermarkets locally and in neighboring countries.
Implementation: Recommendations were fully accepted by key owner and implemented by a selected local team, also involving a one-year line company governance through Business Strategy BS AG. Following very fast-growing chain results, we got full backing on drastic expansion of the Group’s retailing division. Later, assisted in the new, major expansion scheme reporting directly to top management of entire Group.
Results: Increased chain performance, growth focus and profitability during less than one year, where Business Strategy BS AG was temporarily in charge. Sales growth to more than USD 6 billion in just a few years. Retail company now a leading factor in Scandinavia and one of the most profitable divisions in the entire Group.