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BUSINESS - DECISIONS
CΒΕΖΘΙ the SIGHT AT PUMPS

In last number “ a firm Secret “ has told about business - the problem which has arisen at the company “ promenergo “. Professionals from other firms have offered variants of its decision. Today we represent best of them.

the Problem
In brief we will remind a problem essence. The company “ promenergo “ ten years is engaged in sale of the power equipment and takes the second place in the market on sales volume. Thus its share in the market - only 6 %. Major customers - the factories buying electropumps for a complete set of finished articles and for repair.
at “ promenergo “ four basic competitors in Moscow and tens - in regions. The Moscow competitors work with big customers, therefore without a special damage for itself can sell the goods to average clients at lower prices. To keep customers, “ promenergo “ too it is necessary to go on a dumping. Attempts to conclude with competitors kartelnoe the agreement in what have not resulted. To adjust work with big clients too it does not turn out yet.
at “ promenergo “ a high overhead charge which are required for maintenance of the warehouse completed declared in price - sheet production on 90 - 95 %.
last year “ promenergo “ has emphasised on development of own manufacture of the pump equipment. Michael Kuznetsov , the sales manager of the power equipment of the company, considers what to support price on optimum level will allow the developed dealer network. It plans on its creation and puzzles over how to build effective relations with manufacture. Readers and experts were connected to a solution of a problem.

Participants and experts
On competition 42 decisions have been sent, from them for a jury estimation are selected 19 (the others have not kept within when due hereunder). Two thirds of authors live and work in regions.
all decisions were estimated by independent jury :
- Stanislav Tsyrlin , the deputy director of Russian branch The Boston Consulting Group;
- Oleg Rotkin , the assistant to the general director on company development “ Tekon “;
- Michael Kuznetsov , the sales manager of the power equipment “ promenergo “ the author of a problem.
the opinion was in absentia stated also by the senior manager of the Russian branch of company Accenture Boris Lobzov . After discussion of the most interesting business - decisions judges have put down their the marks. Following three decisions with the greatest total point have appeared the best.

the Third place
the Third place in competition was occupied with Andrey Dolgirev . Here its basic offers.
manufacturing enterprise “ promenergo “ should not sell - it is necessary to make at it department of processing of orders, and all inquiries automatically should be readdressed to marketing division “. Mister Dolgirev advises “ to buy small factories if they supplement a price - sheet and can qualitatively carry out small orders “.
With competitors Andrey Dolgirev does not recommend to enter in kartelnye agreements. It is better to find one - two companies with which it is possible to agree about mutual aid: if at one partner it will not appear in a warehouse of the necessary pump, he can be borrowed from another. One more thought - to come into contact to the regional marketing organisations and to offer them favourable dealer conditions on reception of production from factory.
At last, last council - it is more attention to give to work with the personnel, to training, trainings.
the author of a problem Michael Kuznetsov has noted the given decision as “ strong “ and its author - as “ the serious professional “. “ With some competitors at us partner relations are already adjusted, and we in a mode it - a line see the commodity rests in our warehouses “ - mister Kuznetsov speaks. And here about purchase of new factories it has rejected idea categorically: “ It all the same what to play a lottery and to buy up all tickets “.
Stanislav Tsyrlin agrees what to buy new factories unreasonably. But idea to select at manufacture “ promenergo “ to it it seems to function of sale a little premature: If it is simple from tomorrow all production “ promenergo “ will sell independently, there is a risk to lose in turns.
According to jury, in Andrey Dolgireva`s decision very sensible idea has sounded - to reduce assortment of the let out equipment, having focused on problems of concrete clients, that is to make and sell that they can do better and more cheaply others. And one more base thought - all changes are carried out by people, therefore personnel selection needs to pay much attention.

the second place
the Second place is awarded to Dmitry Tchurkin . In its opinion, the company “ promenergo “ has settled reserves and methods of a price competition. Besides, it works in very narrow niche of the power equipment, and it essentially reduces space for maneuver. Therefore Dmitry Tchurkin has offered “ promenergo “ the following competitive strategy based on “ not price “ a competition.
“ To begin with it is necessary to spend a scale diversification of a ruler of offered electropower production, - the author writes. Is will allow to offer clients complex service - some kind of a supermarket of the electropower equipment. It will be more convenient to enterprises to deal with one company, than to buy each product in the different ends of the country “. Besides, mister Tchurkin advises to concentrate on brand creation: “ promenergo “ should position itself as a reliable, inexpensive supermarket of the power equipment. From this working out of scale advertising strategy logically follows.
at last, last idea - manufacture re-structuring. Certainly, it demands serious financial resources, and the effect will be visible not earlier than through ones and a half - two years. But by means of these measures the company “ promenergo “ According to mister Tchurkin, can separate from competitors and occupy any more a niche, and the whole segment of the market.
Dmitry Tchurkin`s decision was especially noted by Michael Kuznetsov : of Its idea very powerful and if them correctly to untwist it will seriously increase liderskie qualities of the company. I would allocate idea brand and supermarket creation. After all now in our market under the pretext of the new equipment take old, restore, attach new labels. And it is impossible to understand, what seller disappears under this label.
Idea of a brand has supported and Oleg Rotkin , having told that it is necessary for strengthening. Nevertheless Stanislav Tsyrlin has seen in this decision and reefs: “ to Expand and diversify business, to create supermarkets it is possible, if there are financing sources. Not all can allow themselves it, especially at once. For example, pharmaceutical distributors at first went from hundred commodity units, five hundred and so on. So to do all it is necessary gradually “.
One more moment which has caused disputes at judges, - that such a brand and advertising strategy for the distributor. “ it seems to me that for the distributor the main thing - an infrastructure, logistics, management of costs, management of commodity stocks and assortment, instead of the scale advertising policy and branding. It is important to wholesalers to be made in logistics more likely, and to be made in marketing is already the second problem “ - Stanislav Tsyrlin has expressed the opinion.

the Best decision
the Winner of competition has been recognised the decision Pavel Medvedev . Its essence in the following.
it is necessary to consider the strategic plan for each segment.
big clients . Reorientation to them is unpromising. As has shown the previous experiment of the company, to achieve effective result it was not possible.
Average clients - repair . The Most perspective market as clients speed of delivery interests mainly. Here at “ promenergo “ obvious competitive advantage - the wide nomenclature and a warehouse it is completed on 95 %, i.e. deliveries can be carried out quickly enough. The price in these conditions is not so important, therefore it is possible to receive an additional margin. The market is not predicted on separate clients, but as a whole in a cut of assortment it is possible to make it, and the more precisely, than more widely client base. It is necessary to give the basic priority to share increase in this market.
average clients - manufacture . It is expedient to allocate separate business - unit serving given type of clients. Narrowing of the nomenclature and decrease TMZ (commodity - material stocks should become a strategic problem. - Council of Federation ) in a warehouse at the expense of what costs will be reduced and advantage at the prices is reached. As here the market almost on 100 % is predicted, big TMZ and is not necessary.
small regional clients . Potential subdealers can take production at factories directly, therefore for them any interest hardly with " will agree; promenergo “. A possible variant - creation in the most perspective regions (marketing research - comparison of potential of regions is necessary) own warehouses.
strategy concerning manufacture . Obviously, high production costs testify to poor control and/ or about the old unproductive equipment. Both that and another cannot be corrected for a short time interval. But it is necessary to develop intermediate term plans for development of system of sale and manufacture so that the enterprise became competitive at the prices. Investments for manufacture updating can be received from a segment “ average clients “.
So, at first sight, simply enough to allocate strategy for each segment. A question in how to co-ordinate it in a complex. If the segment of big clients is unpromising, and for average clients the decision more or less obviously it is necessary to place priorities between development of a dealer network and manufacture development.

conclusions .
1. To refuse work with big clients.
2. The basic priority to give to share expansion in the market of average clients - repairmen, as in it at “ promenergo “ already there is an advantage - wide and accessible assortment.
3. To allocate business - the division serving average clients - manufacturers, and in it as much as possible to lower costs at the expense of nomenclature and volume TMZ decrease.
4. To carry out the comparative analysis of two variants: Decrease in costs at own factory or development of own network of representations in regions to operate by more favourable variant (taking into account reserves of financial durability of the company).
Pavel Medvedev`s Decision seemed to jury to the most practical. Oleg Rotkin, for example, has expressed opinion that the given variant “ it is possible to take for a skeleton and, having added any ideas from other decisions, to try to realise them “. “ Here there are sensible ideas about redistribution of financial streams - for example, investments for manufacture updating can be received from a segment ` average clients `, - Michael Kuznetsov considers. - to Refuse work with big clients we do not gather, and here to concentrate really better on averages. To go by the way of competitors now sense is not present “.
Stanislav Tsyrlin : This good decision. Business prosegmentirovan, competitive advantage of the company is connected with requirements of separate segments. So, wide assortimentnaja the ruler in a warehouse is important to one clients and is less important for others.

Other interesting ideas
They have sounded in answers of many participants of competition. So, Konstantin Terekhin has suggested to get on warehouses of clients “ promenergo “ all equipment demanded by it in enough and to conclude with them the contract of responsible storage with the realisation right: “ warehouse Cost - symbolical, thus you solve a problem of regional warehouses in the most elegant way “.
This thought, by and large, is not new. Nevertheless in the given concrete case the idea of mister Terekhin has been recognised by innovative, and Michael Kuznetsov has informed that at “ promenergo “ there are clients who can go on it.
the similar idea was put forward by Oleg Nochka . Only he has suggested to use not warehouses of clients “ promenergo “ And to organise branches and warehouses in territory of the basic factories - suppliers. However experts have disagreed with it. Oleg Rotkin recognised this decision not too practical. And Michael Kuznetsov has explained this opinion: Factories were under construction for a long time, and today the economy of regions has crept away, and the basic centres of consumption were displaced from the manufacture centres.
In the decision which was sent by Nikolay Pereverzev , it was offered to create a holding management company. This offer seemed to Oleg Rotkinu interesting. However, Stanislav Tsyrlin has concerned idea sceptically: it, probably, is necessary For large versatile holding. But I think, in this case the board of directors suffices for management or board.
At last, Ivan Gonchar considers that “ promenergo “ it is not necessary to create own marketing network as it is necessary to enter a competition to regional suppliers. “ These problems are eliminated at purchase of smaller regional competitor “ - the author confirms. Michael Kuznetsov basically has agreed with this idea and has told that “ promenergo “ already works in this direction: “ Here only to buy up competitors of difficult, their action are not quoted anywhere, their business is difficult for estimating, and to overpay we do not want “. Stanislav Tsyrlin has referred to similar experience of pharmaceutical firms which, moving ahead in separate regions, also bought up the regional companies: “ the Regional market was very small, and it did not allow them to begin with zero, costs in this case did not pay off “. Oleg Rotkin also agrees with the given strategy. By the way, it uses it in an own variant of a solution of a problem.

that experts
Own vision of ways of a way out have offered judges have shared also. Oleg Rotkin considers that it is necessary to buy up as much as possible small competitors (as a matter of fact - their client base). The purpose - to receive a monopoly position in the market.
Stanislav Tsyrlin has offered other strategy: As Michael Porter considers, what you did, strategy is reduced or to price advantage, or to differentiation. I would divide manufacture and wholesale business. Now decrease in costs, narrowing of assortment to those positions where it has a competitive advantage should become manufacture strategy. That is it can let out 10 - 15 commodity units, but it will let out most cheaply. And for wholesale business - differentiation and maintenance of wide assortment. But here financial control and discipline are necessary strongly not to be fond of advertising and marketing and not to receive financial “ blow in a liver “. Uncontrollable growth always conducts the company to bankruptcy.
According to Michael Kuznetsova, thanks to participants of competition in some ideas it has become stronger, and some could clear certain prospects. That is going to do with the received recommendations “ promenergo “? Michael Kuznetsov : I have planned possible actions. So, it would be interesting to develop the company from the point of view of the company - a brand uniting under self wide assortment. And to advance this brand, saving by creation of dealer places directly at factories - consumers (that is using their warehouses on double appointment). Besides, there were ideas about directions in personnel conversion training.
JULIA FUKOLOVA, NIKITA ZHERDJAEV

the Table. Authors of the most interesting business - decisions


to Pavel Medvedev 26 years. It has finished with distinction faculty of economy and management of the Ural state technical university, and this year has protected the master`s thesis on a theme “ Conceptual approaches to an estimation of influence of factors on results of export activity of the enterprises “. Knows four languages. Its today`s post - the marketing expert in the trading company “ SHartash “ (wholesale and beer retail).
“ Me always involved ` design ` activity type, - Pavel Medvedev speaks. - various projects in which I of have tried for last five years, there was a great variety. The part from them was successful, others unsuccessful, but everyone allowed to look at business under one corner “.
“ My strength is an analytical thinking, - Pavel continues. - I can combine the most various methods and technologies for the analysis of the data and decision-making. It also I try to be engaged - in analytics and development of recommendations “. So, Pavel has developed and has introduced in the company of a technique on processing and the analysis of the marketing information. For example, a technique of a choice of an optimum commodity ruler and optimum segments, a technique of weekly forecasting of sales, has developed pricing system in department of wholesales and etc. “ I try any idea from theory to finish to a technology condition, to level when each participant understands that it should do, as, when and what for “ - Pavel speaks. In its opinion, any good decision in business is unique. “ therefore it is not necessary to be afraid to invent a bicycle “.
Pavel Medvedev`s Short-range plan - to achieve, that its company was completely switched to the marketing approach of business dealing, and for this purpose to create effectively working department of marketing. Intermediate term - to organise own consulting company with a regional name.
he considers as the most important for itself(himself) Michael Portera, Filipa Kotler`s books, “ Marketing wars “ Ela Rajsa and Jack Trauta, the book on sotsionike and the mathematical statistics.

as were estimated business -
Each of judges has chosen decisions some the decisions most pleasant to it. As a result have stopped on seven variants. Further each of these decisions was discussed in details, and then judges estimated them on four parametres which have appropriated different weight, - adequacy to a problem and the market (0,15), innovation (0,35), professionalism (0,2) and applicability (0,35). On four these parametres three experts independently from each other estimated quality of each decision in points (from 1 to 5). Further the parametre weight was multiplied by quality standard, and then estimations of all parametres were summarised. The total point was deduced on the sum of the general estimations of each judge.