An industrial design firm that evolved into focusing on designing homeware type products, approached us, when they realized that they needed a turn around, urgently. This design firm played an intrinsic role in South Africa’s 2010 World Cup hosting: having designed and handcrafted through blow-molding the 64 man of the match trophies. Beyond the games, the firm boasted an impressive portfolio: having won two distinguished best design awards for two of their homeware products and had previous retail presence, having distributed their products through an esteemed retail outlet.
They say location is everything to a business. At the time of this business distress, the design firm had just relocated to a premium spot, for its design studio and concept store: an enviable position, but costly exercise, on one of South Africa’s trendiest early adopter landscape of Maboneng. Allowing a previously unrealised opportunity to mingle with unique clients from anywhere in the world as they browsed through the store. Adding to the pressure: the design firm was invited and expected to exhibit at a world class exhibition event overseas boasting more than 150 000 unique visitors, which could translate into unique bulk orders for the firm, if they can only stay open for that long and afford the exorbitant expenses to the exhibition.
Whilst the Maboneng foot traffic to the store was great from a brand exposure perspective, this did not always translate into the much needed sales. Morphing into a survival mode: the firm quickly focused on previous successes, attempting to recreate past victories. This meant focusing on trying to move more of its products through retail, which is an elongated process, riddled with red tape. Not an ideal move when one is on the brink of closure, with only three months worth of cash flow left. We were contracted to assist in the turn around and diligently accepted the challenge.
Research and Situation Analysis
Our team spent three months through site visits: thoroughly studying the company’s client segments, growth trajectory, hiring, sales approach, communication culture, cash flow, collaborative prospects with manufacturing partners and vision. We were then able to cement a turn-around plan based on the firm’s optimisation needs. We tweaked their business approach drastically and help shift their focus from retail to corporate gifting.
Business Process Optimisation
This significant shift, from the retail market segment, an in-store focus, to supplying corporate gifts resulted in the design firm aligning itself to being eligible for a cash injection, through immediate paid gift orders, something that is not popular or possible within retail. This strategic intervention required a hands on approach from our side, we achieved this by attracting an established corporate entity to visit the store and facilitated the relationship onwards.
With just three weeks after this visit the corporate entity placed a half a million rands order of the design studio’s products, as gifts to their clients in their upcoming event. Bearing in mind that this particular entity hosts more than 300 events a year, this has since led to a treasure trove for both parties, an amazing synergy. This flagship order placement was followed by another corporate placing an even bigger order.
Relationships are key to the survival and growth of a business. Our team urged the design firm to rekindle a certain relationship on the firm’s network which had become dormant. After an initial struggle to get this relationship aligned, we once again became hands on in hosting a delegation of like-minded friends and associates from this once dormant relationship on a tour of the store, a first time experience for most of the delegates. This led to one of the associates coming forward and pledging a couple of millions as an investment into the design firm, a much needed cash boost that enabled the firm to pay its suppliers and deliver on its first of many orders to follow for the corporate gifts.
Stakeholder Relations Management & Procurement
As a design studio, the firm outsources its manufacturing. Following the order placement by the large corporate, the design firm ran into difficulty with suppliers who faced extensive backlogs in their factories and were unable to deliver on the design firm’s urgent needs in fulfilling this crucial order. Through our focused negotiations we successfully convinced the suppliers to revise their delivery schedules to meet the client’s expectations. Another example of our business unusual thinking and hands-on interventions that helped to save the day by turning-around and optimising a design firm that is now back on track on a healthy growth trajectory and expansion.