In the archive of commercial history, it is recorded that a leading manufacturer of cigarette lighters was experiencing a slow, yet significant, decline in its sales and market share. The organization was recognised as an important ‘player’, in its business sector and so its management team was, justifiably, concerned.
The company commissioned an investigation by a market research agency, to establish the reason for its business decline. Although the agency’s report was presented, in some detail, its overriding conclusion was that:.
The company did not know what business it was in!
The company had always believed that it was in the mechanical cigarette lighting business. This being the case, other cigarette lighter manufacturers were seen to be its main competition. However, when the team conducted its research, it made the significant discovery that the company’s products were not displayed on, or near, the cigarette counter, as might have been expected. Instead, they were featured on the gift counter, alongside fountain pens, calculators etc. Retailers and consumers perceived the company’s products as Christmas, birthday and anniversary gifts and were promoting them, accordingly.
The company was, actually, in the gift business!
For an organization, to be successful in the gift business, it must stay abreast of current trends and styles. It demands ongoing review of marketing policy and product designs. This had never been a priority, for the company. In the past. It had, always, focused on offering the best technically efficient lighter, in the market-place.
The acknowledgement that it was, actually, in the gift business required the company to make some immediate and radical changes.
- It began manufacturing more stylish lighters, incorporating attractive surface designs.
- It launched a new product range, exclusively, for women. As a result, the company had to, completely, redefine its corporate Aims.
- Facilitating the production of the innovative gift designs meant, in some cases, adopting different manufacturing systems and employing the use of new materials. It became essential to change Technologies.
- Because of the character of the new products and new manufacturing methods, the company had to hire design specialists and retrain existing staff. It meant radical changes to People.
- Changes to Technologies and People meant that the operation had to be managed differently. It required changes to the organizational Structure.
As the changes took effect, the company, slowly, recovered its sales and market position.
Then, from the Environment, came the incontrovertible proof of the link between smoking and serious life-threatening illness.
But that’s another Story!
This early case study contributed to the DNA of the following Training Package: