Case study trading company

Below is a description of the project implemented for our client from the trade industry. We show in the text below how we managed to achieve such benefits with the client:

Adjusting the organizational structure to the company's development needs - increasing business efficiency and predictability
4-fold increase in revenues from the e-commerce channel
32% increase in stationary sales and a 12% higher level of margin achieved
52% reduction in non-rotating goods
Basing the company's activities on the annual budget with a financial liquidity planning tool

Customer description

Client: trade industry, 23 stationary stores throughout the country. The chain of stores has existed on the Polish market for 15 years, employment: 150 people. In the last 2 years, there have been large increases in revenues, which significantly worsened financial liquidity. Despite increases in revenues (over PLN 65 million net), the company began to achieve worse financial results than by selling half as much.

The main problems with which the company reported to us:

- lack of data for enterprise management, despite the implemented system, daily work on Excel files

- general organizational chaos, the client emphasized the main problems in the area of ​​communication between the headquarters and the stores

- inability to plan financial liquidity

First steps:

At the beginning of last year, we conducted a two-month global analysis of the company in the areas of:

- competition analysis

- financial - analysis of financial results, management reports, especially in terms of margin on assortments, sales volume, goods rotation, inventory, data compliance (data in the system vs. accounting data)

- verification of management tools, systems and communication tools of the company

- sales - analysis of management and planning, department structure and competence analysis in terms of the headquarters and stores, sales processes and tools, department motivation systems,

- marketing - analysis of the fit of marketing activities and tools to the company's goals, verification of marketing tools and channels,

- warehouse management

- processes – we have identified the main company processes

Analysis result:

After 2 months of work, we presented the client with the results of the area analyzes carried out by our experts in the form of a report with recommendations for actions.

Finance: we detected a significant discrepancy between the sales system and accounting data. The client's employees were unable to fully use the system, which also generated incorrect statements. Financial data was delivered to the owners from various sources and differed significantly from the place of origin. The company planned its liquidity intuitively, which in seasonal peaks meant that the stores were not fully stocked. The company's supplies cooperate in a limited way with the sales department and do not rely on financial assumptions when planning purchases.

Management information was sent randomly to the company's management board, but it did not relate to the overall results, which meant that the company dealt with current issues that were on the agenda, and not with the most important, key business issues.

In the area of ​​taxes, the company relied on a passive tax strategy and never used the help of a tax advisor who optimized the tax strategy.

HR area - the client has not adjusted his company to such a large personnel structure and turnover over the years of growth. There were numerous multifunctional positions in the company, sometimes with mutually exclusive competences, for example, one person managed the warehouse and was responsible for the sale of a given product group and supported promotional activities. The scope of responsibilities that had remained unchanged for years did not correspond to the tasks currently performed. The organizational chaos was deepened by the fact that there was practically no organizational structure in the company. All problems were brought to the attention of management board members, which resulted in information and decision-making paralysis.

Sales and processes area - lack of a clearly defined person managing sales in the entire company, sales plans defined at the store level did not translate into a global sales strategy, plans were created globally without taking into account the division into assortment.

Salespeople have not received any sales training (either internal or external) in recent years. Store managers had limited access to company reports, which meant they did not have data that they could translate into everyday decisions (e.g. access to non-rotating goods).

Due to information paralysis, promotional activities were often not undertaken, which meant that seasonal goods remained in stores and warehouses waiting for the next season, when, however, no one wanted to buy them due to changes in fashion.

The company did not have defined sales processes and related procurement processes, which meant that each store developed its own informal process.

Marketing – competition analysis showed that sales through the e-commerce channel have increased dynamically in the last 3 years. Competitive companies generated 20% of revenue from online channels, while our client generated only 0.5% of total turnover through e-commerce.

The company did not have advanced marketing competences, marketing activities were limited only to maintaining systematic communication in social media.

The company did not use the services of a marketing agency or marketing experts in selected areas, and the online store generates losses.

Company management and strategy - the client does not have a defined company strategy, goals are not set and decisions are made ad hoc, the company does not budget, the only thing that occurs is general sales planning of individual stores. The two-person management board has no division of competences, and also decides on basic matters

Design work

After the analysis and presentation of the report, we started design work in the area of:

Management and strategy

- during HR workshops, we developed an organizational structure adapted to the size of the company

- we defined the scope of responsibilities and adjusted communication in the company to them

- the management board has acquired processing capacity, which it uses for development projects and actual management work based on a system of management analysis tools. The managerial staff gained management competences enabling them to make some decisions without the need to involve the management board in operational matters

- together with the management board and management staff, we developed a 3-year company strategy and a change implementation plan

Financial controlling and financial management

- we created an external financial controlling department and implemented budgeting

- we verified and organized the company's management tools - together with the system supplier, we introduced changes to generate better reports, we organized the database, eliminating inactive indexes and combining incorrectly duplicate indexes

- we have created a system of management reports for the management board, managerial staff and store managers

Sales and marketing

-  we conducted a series of sales training

- we defined sales processes and conducted a series of information workshops on processes and procedures

- the client implemented a new, more transparent sales motivation system

- the company hired a sales director, whom we helped recruit and introduce to work in the organization

with the help of our experts, we have relaunched the e-commerce channel, which we coordinate in terms of marketing while training the client's team in this area

Measurable effects achieved:

We have been cooperating with the company for another year, here are some of the joint successes we have achieved:

Adjusting the organizational structure to the company's development needs - increasing business efficiency and predictability

4-fold increase in revenues from the e-commerce channel
32% increase in stationary sales and a 12% higher level of margin achieved

New motivational system - a more favorable and transparent motivational system that makes sales bonuses independent of inflationary sales increases, and additionally reduces losses resulting from product theft in stores by 36%.

236 thousand PLN annual savings due to tax changes
52% reduction in non-rotating goods

Developing a transparent company strategy, sales and marketing strategy
Basing the company's activities on the annual budget with a financial liquidity planning tool

If you represent a trading company and are curious about how we can optimize your company and adapt it to current market challenges, our experts will be happy to conduct an initial, free consultation with you. To do this, complete the form below, send information by e-mail or contact us by phone.

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