TCII :: Management Consultants
Building Profitable Business
"By the end of the
first year the
business had fully
recovered: sales
had increased to
140 per cent of
pre-crisis levels
and profits by
160
per cent."
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When the value of the Russian rouble plummeted by 300 per cent, our St Petersburg client suffered an economic crisis. Sales had virtually come to a halt and many of their customers had gone bankrupt.
Our challenge
Our task was to minimise losses and then create a stable platform for sustainable, profitable growth.
What we did
First, the financial stability and debt situation of our client’s top five customers, who accounted for around 70 per cent of the business, was checked.
They were then offered three-year partnership contracts as a clear signal that the client valued them and wanted a long-term business relationship. This made the creation and implementation of debt repayment plans possible.
Next, a major cost cutting drive was put in place. We first identified the major cost drivers in the business and then dealt with them systematically.
We then looked at substituting imported goods with locally available, lower cost materials. This had the added benefit of avoiding import duty and lower transportation costs.
Finally, a team of marketing, key account and business development professionals were hired to help drive forward a business development programme.
The outcome
By the end of the first year the business had fully recovered: sales had increased to 140 per cent of pre-crisis levels and profits by 160 per cent.
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