ESTABLISHED STRONG COMPETITION
Location: Northern Moravia
Duration: 5 months
Provider of solutions for cleaning machines in the food industry. 25 years on the market. 70 employees. Distributor of US manufacturer products. A purely trading company with a monopoly position and a strong distribution network in the Czech Republic.
A former employee of the company establishes a competing company together with a French customer of the USA manufacturer. The client is the first to notice lower sales in the customer network and increased pressure to reduce prices. It turns to suppliers in the USA, receiving support in the amount of a 10% reduction in purchase prices, balanced by a commitment to a target turnover at the end of the year. To keep the market afloat, the company makes two strategic decisions: initiating a previously proposed innovation project and producing its own product. At the same time, a change in business strategy, ie from large food holdings towards medium-sized food producers and processors. The company faces the challenge of adapting to new conditions.
The analysis for part of the readiness of human resources for change reveals the following weaknesses: the lack of qualified experts to start their own production, production and technological knowledge and skills. An established corporate culture of a monopoly position in the market and a reluctance to get rid of the view of how things were done in the past. For traders, the critical point is sales to a new segment of medium-sized companies, where traders are not established. Merchants are only passive recipients of email orders, no customer service is created.
The well-established system supports the idea that the new method will not work.
The company’s management is building two parallel projects. For the investor-technical solution from the development of the prototype of the new line and certification, a change team was chosen, copying the company’s management, supplemented by a consulting company for setting up production processes. The second interim project is to manage change towards people in the organization and to create a future organizational structure.
A strategic workshop with the company’s management redesigned the company’s vision, values and strategic goals. Created a system of meetings for coordinating update information for employees.
The new system requires active business activity, targeted on-job training for sales representatives is created and the USP of a new product and FAB matrix for professional knowledge of the offered solutions is built in the form of workshops. Cooperation with an external marketing specialist started. Also created an incentive reward system to support active business.
Based on the competency matrix for the new organizational structure and the creation of a payroll strategy, key employees for the company were “ready” for the company. A recruitment plan is created for the individual phases of the start of production. A new HR department was set up to manage the personnel agenda, the aim of which, in addition to data management, is to expand the set education system and strengthen the established organizational and cultural changes.
At the same time, the foundation was laid for the project of creating a customer database and purchasing a sophisticated ERP for CRM. For evaluating sales and providing customized customer service.
Despite the initial investment, technical innovation shows a 15% reduction in the selling price and a return on investment of 28 months. Provision of customer service 5 days a week with a reaction time of max. 3 hours and research facilities in the Czech Republic. Increase sales flexibility by recruiting senior sales representatives and setting up a performance-based reward system. The CRM system will make it possible to evaluate customer behavior towards the implementation of production processes with recurring requirements. Engaged HR to maintain an optimistic corporate culture. Thanks to the need to react to the competition, a complete change in the company’s strategy creates a new, unique direction for the company.