KINGSPAN: safe margins resistant to a price war
Jarosław Pawelec, former Operations Director of KINGSPAN
We dealt with the price attack of three competitors, and in a such good way that we did not lose a single key customer and our market share grew from 22% to 25% in one year. We consider this situation as a great success, in which we were helped by Strategy & Results consultants!
We expected an attack by two competitors from Italy. We knew they would play with the price. We were seriously considering how to deal with this challenge. Initially, we thought that low price, on-time delivery and high quality were the loyalty factors in our business. Therefore, we considered an adequate price reduction. However, this would limit profitability and, consequently, our ability to improve quality. We also budgeted an investment in a new machine, which would allow us to shorten the delivery time.
However, Janusz Kamieński together with Strategy & Results consultants suggested a different solution. It turned out to be the best of possible. On Janusz’s advice, we decided that the best method would be to focus on the company’s key customers, who generate the greatest mass of margin, and to maintain their loyalty. The idea was that loyalty come from the value offered, not from reduced prices.
The knowledge we gained thanks to the research carried out by Strategy & Results consultants turned out to be crucial for our new market strategy.
- With a little effort, we met the quality standards with surplus. There was a source of budget for possible investments.
- The timeliness of deliveries was sufficient. So we canceled the investment in the new machine, which improved our profitability. Again: there was a lot to invest in things that creates value for customers.
- Technical consulting and efficient of service turned out to be two key competences from the point of view of our clients.
- The possibility of free storage of unclaimed and already paid goods turned out to be a solution very much desired by our customers, which we could provide with a little effort.
We transformed the above knowledge into specific projects, which we successfully implemented with the help of Janusz’s consultants. The effects exceeded our expectations. Therefore, I did not hesitate for a moment, inviting Janusz to cooperation, when my professional fate directed me to another plant in Romania. I highly recommend working with Janusz Kamieński.