The situation:

Our client is a food company that is family-managed and predominantly family-owned. The company employs approximately 2,500 people (including the 1,000 employees of its overseas affiliate) and it is Europe’s fifth-largest company of this sector. After purchasing a loss-making food company overseas our client was forced to distribute financial and management resources across both companies for several years. The situation soon began to impact the company’s performance and homegrown problems (product quality and management competencies) in combination with a recession triggered a slump in sales and a drastic decrease in net profits.

Our services:

tivona partners devised a plan to reengineer the company. We identified the main cost inefficiencies and created a nine-month sustainability program. Bi-monthly status meetings, which the entire top-level management attended, constituted one element of the plan. We also determined the company’s actual monthly cost structure. Using a zero-base approach, we performed identified the ideal size and structure for our client’s outlets (including its own branches and the placement of products in stores owned by trade chains) as well as the company’s regional expansion. We matched this data with an ideal business structure. As a next step the overseas subsidiary was sold quickly; the process took less than three months. tivona partners negotiated with distressed equity funds and met with prospective buyers. As a result our client handed the major stake to an industry-experienced investor, whose financial background was solid and who brought vital management know-how to the company. Finally, tivona partners created a plan to boost sales, enhance the quality of products, tailor the design of the branches to customers' needs and improve the product range.

Benefits for the client:

The company was rescued because underperforming branches were closed and trade with outlets that had placed products poorly was discontinued. Addressing our client’s logistics requirements contributed greatly to the overall success of the project. Our team also negotiated successfully with the union, which allowed our client to reduce the head count. Production optimization was another important aspect of the project. The product portfolio was trimmed down to make room for new products, which enabled our client to compensate for the previous slump in sales and improve the profit margin. Finally, the administrative apparatus was scaled back. The combination of changes suggested by tivona partners allowed our client to make further structural changes.