A Leading Gold Jewelry Retail Chain
The Situation
 
  • Declining margins.
  • Intense competition from large and small stores.
  • Imminent entry of large retail chains.
  • Heavy debt caused by the investment required in setting up gold jewelry stores (Rs 5 to 20 crores per shop).
   
The Solutions & Results
 
  • Redefined the business model - aggressive growth to cut per gram costs, high volume low margin business, professional back end, owner driven front end, centralised common services etc..
  • Expanded presence from part of a state (North Kerala) to South India and GCC.
  • Designed and implemented a unique franchise model system
  • Set up the Corporate Office to drive the growth process and ensure corporate policies are followed by the various branches.
  • Grew from 4 shops to 39 shops within 8 years and is now in the process of setting up 24 more shops in the next 2 years.
  • Set up a centralised marketing and advertising department , procurement department, corporate services department etc for the entire group leveraging on high volumes to cut costs and improve quality.
  • Set up a branch structure that delivered a personalised service to the customer.
  • Set up a HR department capable of:
    • Recruiting more than 200 people a month.
    • Training more than 200 people every month.
As a result of these initiatives the client's turnover increased by over 4400% within a period of 8 years and the Group currently has a US $ 1 billion turnover.



A Leading Parcel Services Company
The Situation
 
  • Running a huge loss equal to 20% of turnover.
  • Intense competition from other players.
  • Very poor service levels leading to drop in turnover.
  • Drop in turnover of core parcel service business.
  • Lack of clarity on long term strategy - various diversifications were being tried out with limited success.
  • Dependence on many large customers where we have low pricing power and need to offer significant credit .
  • Lack of financial control on around 300 branches spread across India.
  • Lack of control on cash flow as collection and payment was occurring at all locations.
  • No control on the operations of own lorries due to rigid driver union.
The Solutions & Results
 
  • Increased service levels to best in industry.
  • Year on year growth of 25% over the last 3 years.
  • Established clarity throughout the organisation that the core parcel service business was highly profitable and could be expanded.
  • Focus on small clients who are willing to pay appropriate prices and ready cash.
  • Centralised cash collection of most branches and re-established financial control.
  • Implemented proper monthly financial reports by the 15th of the next month from all branches.
  • Faced down the union and re-established control on the operations of the lorry section.
  • Closed down unviable branches and put up new branches in potential towns.
As a result of these initiatives the client's profit went from -20% of turnover to +20% over a period of 6 years while turnover grew by around 100%.



A Leading Publishing Company
The Situation
 
  • Running a huge loss equal to 10% of turnover.
  • Diversification into magazine printing was a huge loss due to high magazine returns and dependence on big agents.
  • Huge sales outstanding of upto 12 months with large institutional clients.
  • Intense competition from newspaper publishers who were targeting the high volume markets.
The Solutions & Results
 
  • Redefined the business model as follows - cash and carry, direct sales to retail outlets and customers, focus on low volume products etc.
  • Converted most sales to ready cash - currently servicing 900 retail outlets.
  • Exited from nearly all high volume institutional business while managing to maintain overall turnover by developing non-institutional business.
  • Set up 800 small agents for distribution of magazine on ready cash basis with minimum magazine returns - offered additional profitable products through this channel.
  • Developed and launched more than 15 low volume profitable products in the market.
As a result of these initiatives the client's profitability went from -10% of turnover to 20% of turnover in 2 years.



A Small Scale Atta & Maida Manufacturer
The Situation
 
  • Highly commodity oriented business with a very low profit margin.
  • Average sales equal to 40% of production capacity .
  • Around 1.5 months of sales outstanding.
  • Selling to around 200 retail/wholesale outlets in 4 districts using own salesmen and spot hired vehicles .
  • Business running at a loss as breakeven was at 90% of production capacity.
  • Working capital gap equal to 1 months sale
  • Competing with very large competitors who are 10x to 20x the size of the company.
The Solutions & Results
 
  • Redefined the business model as follows - ready cash sales, direct distribution to retail outlets, focus on service, market penetration.
  • Increased retail outlets from 200 to 1200.
  • Expanded operations to 7 districts.
  • Reworked breakeven point to 50% of production capacity - running at an average of 60% currently.
  • Planning to expand operations to 10 districts and service 2000 retail outlets .
  • Planning to forward integrate into value added products to improve profitability.
As a result of these initiatives the client's profitability went up from -5% of turnover to +5%.



A Leading Door Manufacturing Company
The Situation
 
  • Selling exclusively to big distributors and builders ie institutional market.
  • Declining margins.
  • Intense competition from large and small competitors.
  • High sales outstanding.
  • Low realisation due to heavy bargaining by large customers .
  • Imminent entry of multinational manufacturers.
  • Heavy debt caused by investment in machinery and working capital.
The Solutions & Results
 
  • Redefined the business model - focus on retail market, set up exclusive franchisee stores, direct delivery from factory to customer site, ready cash sales, made to order doors, order to delivery cycle of 7 days, ability to service even single door order economically.
  • Designed and implemented a unique franchise model system.
  • Setup 70 exclusive franchisee stores mainly in North Kerala within 15 months and are in the process of putting up another 80 stores in South Kerala.
  • Redesigned distribution system to handle even single door delivery to customer site economically.
  • Redesigned factory system to handle even single door manufacturing within a lead time of 4 days and offer more than 60 varieties of doors to customers.
As a result of these initiatives the client's turnover in the retail segment is now equal to 50% of the institutional segment, and will increase to 100% within a year.


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