TCII :: Management Consultants
Building Profitable Business
By the end of the first year the business had fully recovered: sales had increased to 140% of pre-crisis levels, and profits had risen by 160%.
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From crisis to recovery: turning around a detergents and adhesives manufacturer
When the value of the Russian rouble plummeted as a result of the economic crisis, our St Petersburg client suffered a business crisis. Sales virtually came to a halt and many of its customers went bankrupt.
Our challenge
Our task was to minimise losses and then create a stable platform for sustainable, profitable growth.
What we did
First, we checked the financial stability and debt situation of our client’s top five customers, who accounted for around 70% of the business. To demonstrate our client's commitment to them and their value to our client, three-year partnership contracts were offered, making the creation and implementation of debt repayment plans possible.
Next, we initiated a major cost-cutting drive. 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 reducing transportation costs.
Finally, a team of marketing, key account and business development professionals was 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% of pre-crisis levels, and profits had risen by 160%.
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