Can you see off the threat of disruptive competitors by remodelling your business? If you traditionally supply through retailers, are you brave enough to compete directly with your existing customers. Can you do you do this without losing your core business and generate a direct selling model to the consumer? Where does the brand value in …
Can you see off the threat of disruptive competitors by remodelling your business?
If you traditionally supply through retailers, are you brave enough to compete directly with your existing customers. Can you do you do this without losing your core business and generate a direct selling model to the consumer?
Where does the brand value in what you supply lie, can you move from being a manufacturer / distributor supplying retailers or build a vertically integrated business selling direct to the consumer?
How far do you pivot your business? Fully or take a hybrid approach. The companies that are lukewarm to the idea of change are doing it because their competitors are doing it are likely to fail and end up with a mixed unprofitable business model.
Look out for the tell tale signs in your existing business that you need to change.
- Employee exodus – are your best people leaving?
- Selling product at negative margin to maintain customers.
- Tightening of cash-flow unable to pay key suppliers
Not changing your approach and expecting different results is likely to end in decline.
If you recognise any of these issues then consider the following points:-
The most common barrier to evolving to a direct to consumer model is establishing that mindset at the top level within the organisation. Even though it may be a transitional process to a new business model, the mindset has to be firmly fixed on the notion for change.
Creating customer intimacy
Moving from a few to multiples of customers can challenge a typical customer service department. Operating the same customer service regime could be a disaster. Items to consider are touch points, mapping the customer journey. How do customers want to interact in the digital age. Are your systems joined up to ensure everyone understands what previous contact the customer has had with the business through the buying journey?
Leveraging digital technology, make it the golden thread through your business. Remove non-value adding activities and ensuring that you engrain digital into your business strategy for competitive advantage
Ensure you understand the impact upon manufacturing, evaluating trade offs between manufacturing efficiency, responsiveness and where to hold inventory. As a B2B business, you may traditionally have fewer customers that order on a set pattern of demand to replenish their stock. If you want to supply the same product direct to the consumer then you need to consider the increased volatility, volume of orders and invoices to process.
Operational challenges such as changing from a full pallet pick to unit picking, changing warehouse configurations, reduced lead times and order cut off points can lead to a change of shift pattern and can add in unexpected costs to an operation.
Ensuring that you can price check ALL your key competitors is a key challenge, though more data is readily available to analyse, with search engines, Amazon, Ebay stores etc. Big data can play a key part in gaining detailed market intelligence quickly and allow the ability to react daily to competitors promotions.
If you want to discuss any of the above, please contact me on www.peterdent.biz/contact
This blog was written by Peter Dent as part of his research studying with the Academy of Digital Business Leaders (www.theadbl.com)