What Legacy Companies Can Do to Survive and Thrive in Turbulent Markets

By: Paul E. Roberts, Principal – Roberts Statistical & Consulting Services, Los Angeles

?Your company has been in business over ten years and things are going well. Sales and profitability goals are being met, the business is expanding its market share, and new customers and product opportunities are coming to the fore. Then, the unexpected happens.

Supply Chains Break Down:

Without warning, something happens that your organization has no control over. It's 2021, and six containers of the company’s top imported product line are stuck on the Ever-Given container ship, which has run aground in the Suez Canal. Supply chains that have been pushed to the brink by the Covid-19 pandemic have now ground to a halt. The containers that were expected in April are now arriving in August at best, almost four months late. Similar issues and delays occur on Asia-Pacific container ships as well, leaving you to wonder when your deliveries are going to arrive.

Leading product lines are suddenly unavailable. Shipping costs of imported products skyrocket, making the profitability of the product coming in from overseas less attractive to both your customers and your company itself.

To make matters worse, something happens in one of your main market areas that causes the company’s customer base to stop buying or having events. At some level, these events are happening every day.

What is most important is how a business plans and reacts to these circumstances and challenges. Your actions will define how your business moves forward, or if it does at all.

Being Proactive by Planning and Keeping Information Lines Open:

The current local, regional, national, and international supply chain issues are affecting organizations at all levels. Manufacturers that made several variations of their lead product have at least temporarily discontinued those options until their own supply chain challenges subside. Custom orders that used to take six to eight weeks now take 12 to 16 weeks. Shipments of imported products are delayed unless additional shipping fees are paid and/or overseas plants can bring in enough personnel to run production. The problems seem endless.

Many economists and network talking heads are predicting that the current supply chain challenges will not correct themselves until at least 2023. Others are telling companies to prepare for this to be the “new normal”.

So, how do you move forward?

As a company with an established customer base and market share, there are quite a few things that you can do to not just survive through these challenges, but to thrive.

Where to Get Current Market & Industry Information:

One of the most important activities any company should do is know what is happening in the local, regional, national, and international economies, and how these activities can affect the organization’s supply chain and market share. Having a clear understanding of what your vendors and customers are dealing with will go a long way to helping business leadership make decisions on product, pricing, and organizational infrastructure.

It is also important to know what is going on in your business’s industry as a whole. The situations and challenges occurring in your market area are also happening to others both inside and outside of your territory. Having corporate leadership active in industry groups and associations will give your company vital information. The sharing of best practices of competitors and regional collaborators alike benefit all participants. As many have said, “a rising tide lifts all boats!”

Industry associations can also provide assistance when the road forward is not clear for your business. Partnering with organizations within your industry will give you the perspective from their regional market and offer insightful alternatives.

At times, it can also be best to ask for help from independent third parties, like RobertsSCS – and we’re taking on clients! Reach out to Paul at (310) 972-8243 to schedule a free consultation. Third parties provide unbiased observations, guidance, and direction. All these alternatives can provide a clearer picture in murky economic and industry waters.

Utilizing In-House Customer & Vendor Data:

Businesses can mitigate market issues by broadening their availability within a product segment. Having alternative brands of similar items in stock will give customers options when they may need it most. Sales departments often prefer to lead with proprietary product put ups as they lock a customer into purchasing that item from your company. For example, not only is the refill cartridge system often the most efficient way to supply a product with the most use of the product in that cartridge versus other means of product delivery, but it is also more profitable for the business.

Understanding what customers order and why is key to mitigating product availability challenges. Many legacy companies are content with counting case sales of their top moving items and communicating that information to both vendors and customers. Digging deeper into you customer and vendor data that is within your business’s ERP systems gives the sales and procurement teams the necessary information on why customers are buying what those products and if they will accept alternatives when supplies become delayed or unavailable.

When supply chain interruptions occur, there are times when the most profitable items have a significant lead time and are not available. When these situations occur, it is important to have alternative product packaging available for your customer’s temporary use. The last thing any business wants is to have to tell a good customer they must get product they usually have somewhere else. This opens the door to competition to take your customers in not just the short term, but most likely the long term as well.

Having alternative products available for customers can also maintain product identity for both your organization and your vendor. When needed, alternate vendors can be utilized, but be aware that these suppliers must maintain the product integrity of the primary vendor’s product. Making sure all stakeholders know what to expect from the supply chain will go a long way toward keeping existing and new customers happy. Customers appreciate getting knowledge and transparency from their suppliers.

Being Proactive and Planning for Success:

When markets get turbulent, that means it is time for you to start making decisions. With economic and industry information in hand, company leaders must see what needs to be done in both the short and long term. Actions can include asking:

·???????Is it time for the business to pivot in another direction or stay the course?

·???????Can we better serve our customers by providing products and services that are a new market direction for the organization?

·???????What planning and process changes need to be implemented to get customers what they want in a timely manner?

·???????Should we start engaging with alternative suppliers to get access to their product pipeline?

·???????Will we have to change our warehousing and logistics patterns to better serve our market base?

It is critical for legacy companies to be proactive instead of only being reactive. In turbulent times, having a documented plan of action will keep all departments and stakeholder on the same page as the organization weathers the storm.

Fires occur all the time, but knowing that everyone in the company knows the direction business leadership is taking go a long way to maintaining smooth operations. A consistent recorded review of key performance indicators (KPIs) and key results actions (KRAs) will help the business to smooth out its operations and allow for pivoting when necessary. Presenting a unified front within the organization will be projected to customers and vendors alike, creating stronger relationships and allowing for better business decisions.

These are a few of the many ways a legacy company can survive and thrive, even in turbulent markets. Please drop us a line and let us know what you think! We are here to start a conversation.

Does your company need a business plan? Is your existing business plan due for a refresh? Has your company lost focus and you are looking to re-energize it? RobertsSCS is here to work with you to bring your business processes into focus. Call us today at (310) 972-8243 or reach out to us at [email protected]

About RobertsSCS:

Roberts Statistical & Consulting Services ─ RobertsSCS ─ offers results-oriented strategies, mentoring, and insights to optimize operations for legacy companies looking for 21st Century upgrades to improve profitability, increase sales growth, and future-proof systems for sustainability.

Using 30-plus years of operating and management experience, RobertsSCS works with businesses with $1-30 million in revenue to create better efficiency, synergy, and outreach.?We provide developmental, strategic, and executable plans of action at multiple levels: wholesale, retail, B2B, and B2C for organizations desiring to maximize industry market share.

Understanding the market environment and the status of each business we work with allows us to provide customized insights on growth and profit opportunities at the local, regional, and/or national market level.