BUSINESS SOLUTIONS EXPERT GROUP: ACUMENTIA CASE STUDIES SERIES

Background

A major confectionery manufacturer was failing to compete effectively with its major competitor.

Action

It undertook a benchmarking exercise to understand the reasons for its failure.

The conclusions were:

Its product range was far too diverse, reducing operational efficiency and diluting market focus

Its factories were too small and located in high cost environments

There was diversity in operations and marketing caused by the business segment being the result of a series of acquisitions

The result of this was a manufacturing cost 30% higher than its rival leading to less funds being available for innovation and marketing.

Recommendations were:

Align products into a much narrower range

Concentrate manufacturing into a large factory in a low cost environment

Align marketing, sales and distribution into a single model

Result

Movement towards the recommendations is now taking place and forward projections on manufacturing costs are positive. The outcome of the project also highlighted the need for better decision-making and the ability to drive through change in the face of a degree of internal opposition.

BUSINESS SOLUTIONS EXPERT GROUP: ACUMENTIA CASE STUDIES SERIES

Background

A company in South Africa held a dominant share of the highly profitable bubble gum market. Sales started to level rather than steadily growing. Various conventional alternatives were tried, marketing promotions, new products, etc., but none of these was able to restart growth.

Action

Research found the change coincided with the introduction into South Africa of ‘pay as you go' mobile phones. Indeed, mobile phones had quickly moved to the very top of the consumer spending priority, draining large sums from available disposable expenditure in the first year of activity: a new, powerful and aggressive competitor for disposable spend had emerged from a completely unexpected direction. The product's target market was the key area of growth of the competitor and made the product look outdated and juvenile.

Result

The business recognised that it needed to change the way it approached the market and provide more positive ‘reasons to participate' rather than the previous approach of ‘just good gum' and a few simple product-related incentives. The brand image was updated, packaging redesigned with more modern images of the traditional emblems and more ‘young adult' type flavours and flavour descriptions introduced. Sales grew 20% following the re-launch.

BUSINESS SOLUTIONS EXPERT GROUP: ACUMENTIA CASE STUDIES SERIES

Background

Through acquisition, a large multinational confectionery group produced similar sugar confectionery products for the European market in a large number of different factories inside and outside the EU.

Action

A wide variety of alternative supply chain solutions were considered, taking into account both the costs and benefits of rationalisation and relocation. The alternatives were modelled on a consistent basis taking into account all the issues (such as technical capability, capacity, labour rates, overheads, etc.).

Result

A plan for manufacturing reconfiguration was developed and executed by the company. This required a consistent treatment of a wide range of alternative scenarios on the basis of value created from the investment.

BUSINESS SOLUTIONS EXPERT GROUP: ACUMENTIA CASE STUDIES SERIES

Background

Through acquisition, a large multinational confectionery group had three ranges of a single product manufactured in a number of factories. The three ranges differed in product shape and had overlapping, but slightly different, flavours resulting in over one hundred different products. In addition, the manufacturing costs of the products were significantly higher than its main competitor resulting in less cash being available for promotion and reduced profitability.

Action

By working with a multidisciplinary group, the different product ranges were aligned in size and to flavour groups resulting in about twenty genuinely different products using the best flavours from all the ranges.

Result

Benefits identified included rationalisation of facilities, maximising utilisation of plant, reduced downtime and losses by extending production runs and lower raw and packaging materials costs through scale purchasing.

Note - the key issue here was working in a multidisciplinary group to show the benefits of aligning products and resulting operational reconfiguration which allowed the benefits to be realised.

BUSINESS SOLUTIONS EXPERT GROUP: ACUMENTIA CASE STUDIES SERIES

Background

Selenium content in UK diets has been falling and is now well below the recommended daily intake of 60-75 micrograms. Selenium is an essential trace element that is involved in immune function and antioxidant defence, important in protection against cancer and heart disease.

AgResearch Ltd, the largest Crown-owned research institute in New Zealand, has patented and trialled injectable and bolus technologies for delivering selenomethionine to sheep and dairy cows. These supplements dramatically increase the selenium content of meat and milk for consumers, while also satisfying the selenium requirements of the animals. This on-farm, in vivo intervention is preferable to post harvest fortification with minerals as the selenium enrichment is more natural and selenium is delivered in a bioavailable form.

Action

AgResearch asked Acumentia to help to identify partners to licence these inventions in Europe. Acumentia used its extensive network of contacts to find an innovative UK-based company offering related products in the animal feed supplementation sector which was interested in expanding its product portfolio.

Result

The two companies are working together to develop the licensing opportunity

BUSINESS SOLUTIONS EXPERT GROUP: ACUMENTIA CASE STUDIES SERIES

Background

A medium-sized global food ingredient company was mainly dependant upon toll manufacturing commodities for a third party.

Action

A strategy was developed to position the business with its own branded novel ingredients for the global functional foods, nutraceutical and cosmetic ingredient markets. A formula was developed to establish the innovative culture, management systems and market servicing networks to achieve this outcome.

Result

Over the next 5 years it achieved a compound growth rate of 50% pa with several first to market novel ingredients and the added value functional foods business was as large as that of the toll manufacturing business. The toll manufacturing customer had also been transformed to using many of the company's novel ingredients, changing the relationship from a price-driven relationship to a value-driven relationship.

BUSINESS SOLUTIONS EXPERT GROUP: ACUMENTIA CASE STUDIES SERIES

Background

A medium-sized company wanting to grow was looking for new product development in the ingredients market.

This marketplace was already crowded with products and no clear niche had been identified to target.

Action

By receiving competitor publications, their specialisations and trends were mapped out.

Result

This information together with market intelligence from other sources was used to identify ingredient types for exploitation and business models were constructed accordingly.

BUSINESS SOLUTIONS EXPERT GROUP: ACUMENTIA CASE STUDIES SERIES

Background

A large corporation was ‘muscle bound' in terms of its own intellectual property and uncertain of its own protected competences.

Action

The company's patents were surveyed, organised into portfolios and summarised in a way that indicated synergistic opportunities between technology areas.

Result

The material was presented in a lucid and fluid format that was utilised in high level corporate business decisions.

BUSINESS SOLUTIONS EXPERT GROUP: ACUMENTIA CASE STUDIES SERIES

Background

A manufacturer of wheat and rye-based products was facing fierce competition and their products were losing retailer listings and the business was facing liquidation.

Action

Initially they engaged an Acumentia partner to review the manufacturing process with a view to reducing costs, but it quickly became clear that other components of the business were adversely affecting the process and they called upon the partner to lead a review of the entire company, starting with profit and loss accounting.

Result

By attending to each separate component and integrating them more closely with one another in a new management structure, involving new recruitment and training, unit cost reduction (the initial objective) was achieved.

But more, by thinking in Olympian athlete terms, the company’s team regained its feeling of purpose and direction. Within 2 years it had regained its market presence, re-established a comfortable return on capital invested and is now expanding into exports.