Case Studies

Strategic business partnerships

Thinking Outside the Box
Most strategies involve some type of competitive assessment and figuring out ways to be better at the key success factors than the competition. Some of the best strategies, however, are ones that solve problems in a different way than the traditional competitor. Sometimes companies are able to.. Read more

 

Shrink or Die
Cutting Costs Effectively

Innovative strategy

In today’s economy, many companies are faced with challenges that fundamentally change their business economics. Just as the mainframe computer industry had to redefine itself and make a transition into the world of personal computers or face extinction, many companies today must find a way to survive and thrive at a drastically smaller size and THEN look for new ways to grow.

Our client had considerable capital equipment with significant overhead that required a high run rate to be profitable. Like many companies, they had high customer concentration. Unfortunately, they lost their largest customer which represented almost half of their business.

In a situation like this, there are no winners and sadly there are frequent casualties along the way. In order to survive a catastrophic problem like this one, a plan has to be developed quickly and all the major constituents need to have direct and forthright communication as quickly as possible.

In this case, the bankers and investors were very concerned and rightfully so. The plan being communicated must have a solution that is better than liquidation in order for the participants to play along. The bank and investors had to be convinced that they would be better off by assisting the company through this type of transition, The Company had to demonstrate that they could do what they say they planned to do. In order to maintain their credibility throughout the transition, they had to provide frequent plans to the board, investors and bankers in order to obtain the necessary support to get back on their feet.

In this case, we were able to buy enough time to develop a plan that allowed the company to survive and establish more proprietary products and services that were less subject to swings. We worked directly with the banks and investors to provide them with confidence that the plans were realistic and attainable. In the end, the company was able to reduce its costs to a level that allowed them to be profitable and then grow back up to the levels they had been at before the loss of the major company.