When traditional business models stop working
Sometimes a tried-and-true business model can’t carry a company into the future. That was the case for a global printing and logistics services company. Under pressure from technological changes that were reshaping its industry and from rivals armed with radical new competitive tactics, the company had to rethink how it did business. And the clock was ticking—revenues were shrinking by an alarming percentage, and customers were voicing dissatisfaction with the company and its services. Eager to get the company back on track, management asked AlixPartners to design and execute a profitability improvement plan.
A large-scale change program transforms profitability
We used our proprietary tools to rapidly identify cost-saving opportunities across an array of business areas—including SG&A, sourcing, field operations, real estate, technology, and labor. We then switched to the revenue side of the business equation—generating ideas to help stabilize revenue and to driving fresh growth. Retail sales, e-commerce, commercial and consumer sales, pricing, in-store customer experience, and overall service delivery—we examined all of these areas to uncover the most promising improvement opportunities.
Once we had our list of ideas in hand, we designed initiatives aimed at exploiting each opportunity. In tight partnership with company management, we helped to drive sustainable change across the organization, including (1) developing a field change governance model to help ensure all field-level changes could be easily digested by the widely-distributed labor force, (2) executing pilot programs for certain complex initiatives, and (3) working hand-in-hand with local managers and sales teams to implement revenue enhancement initiatives.
When it really matters
The operational performance plan did more than just deliver as promised: The company achieved annual profitability improvements of well over $250 million—a figure that greatly exceeded original estimates. Roughly half of these improvements came from changes in how the company managed sourcing. For instance, taking an innovative tactic with a major supplier yielded more than $80 million from a category that was sourced aggressively the year before. Additional improvements came from sales force effectiveness, pricing, and operational modifications made to G&A, field labor, and real estate.