Friday, 8 April 2011

in business you reap what you sow

With the bar for standards so low we found we were shut out of the entry level , we couldn’t possibly compete with such low standards without damaging our hard earned reputation irreversibly, we would have to seek higher ground.

We turned all our efforts into R&D in an effort to distinguish ourselves from the pack. We brought out a series of premium products , while everyone was going cheap, and diluting their brand we concentrated on marketing ourselves on our core principals “good product better price” In the past we had only made standard products ,we now went for high value niche products at huge discounts to the prevailing market prices

This proved very successful in our core decorative niche, we also launched a product “xtra” especially designed to cope with the peculiar hot wet salty coastal conditions. This took us well over 5yrs to develop but would become a market leader

Running with the colored container idea, we brought out different products in different colored containers further differentiating ourselves from the pack

The coloured containers were a cheap and effective way of branding as the eye catching colors and the ubiquitous use of buckets due to water shortages would ensure we were everywhere once again .

Due to the long life span of plastic very soon it became a problem (try explaining to auditors you are not doing as well as it seems...... it’s just plastic is nonbiodegradable )

There was also the added complication of having to hold so much packaging material inventory in order to cope with the various brands

In the mean time we had gotten certified in various categories and with various standard organisations

Once we had all this set up and our reputation was saved and strengthened it was time to give them a taste of their medicine we would launch our own low cost label “Basic” this was better than the rest in terms of quality and we sold it at a premium to the rest .

The reasons were as follows

1, we needed to ensure we were not shut out of any category

2, to act as a spoiler reducing available market share

We would set strict rules to guide us through the murky waters of introducing a “low quality” product

1; Sales target based on a % of total volumes produce ensuring we were just using downtime and not getting distracted from our established lines

2; Establish a different distribution channel for this to reduce confusion in the market place

3; Make education of our customers on the different brands our focus for advertising campaigns .Which created a stronger tie with our customers as it initiated dialogue.

But all this would have been impossible without a united committed work force after the bloodbath of sacks and cuts it was time to start rebuilding we would achieve this by planting a garden .

A garden is a wonderful thing, everyone joins in, no special skills are required. Everyone can follow its progress which is short term enough to give hope but long enough from sowing seeds to flowering to have its full share of doubts and fears

Also a garden is a journey not a destination once you start you can’t stop which is exactly what good business should be.

Friday, 1 April 2011

oops! there goes my cash flow

In a bid to hold onto what remained of our Brand intergrity (the quality we were suppose to stand for)
Once we found out where our lunch was going we slashed our distributors list taking back control and changed the color of our buckets from generic white to green.

Two quick fixes which would expose the under pinning’s of our world.

The first thing noticed was a huge drop in our cash flow: this would cause us to look inside for the first time in years , everything was rotten and antiquated from staff ,to accounting methods to dealings with suppliers

We will take a surgical view to everything wring out savings from our suppliers , fire redundant staff and begin writing custom software to better handle our unique needs
Once we had been stripped bare by this exercise we were able to take a critical look at ourselves and access our strengths:
Good brand , good staff, location, loyal customer base .
And weakness :
narrow range of products , tight distribution network, no certification .

One of the consequences of the adulterators was there was now a whole new product category “crap” which the painters loved, what you saved on paint you spent twice on labour.

Meanwhile the whole of the industry was in the same position , one of the premium players would make redundant their head of R&D , we hired him immediately and began to create a state of the art R&D department .