How to Develop a Market Niche

Case Study Project Description

After the dot-com bust, the market was flooded with website designers. Our client, a website design firm, needed to differentiate themselves from the competition.

Project Problem

Web designers have to be both technically on the cutting edge of software but also be part marketing geniuses, writers, designers and project managers. Many companies cobble together these talents from outsourced support. This company had all the talent in its two founders. But they needed to develop more than their talents: they needed to become known to specific industries and focus on becoming known for resolving issues specific to that industry. They also needed to be known for more than just website design, and to develop a leadership team able to build and sustain the company at a higher level of sophistication.

Solution

The first challenge was to help the management team uncover their unique talents and abilities so that they could innovate a new market niche. The second was to help them transform their business model, allowing management to see the company’s full potential. Customized learning events showed them how to develop a vision and reframe their role as a service-based business.

After three months, their new vision began to emerge: to be a trusted collaborator able to take complex information and give it organization and clarity. The management team now leads collaboratively and uses their vision to guide decisions and actions. To identify the right industry to focus on, they took their knowledge of Canada’s supplements and nutraceutical laws and offered their services to US manufacturers wanting to enter the Canadian market.

Result

They were then able to be a one-stop of knowledge, design and website support for an industry that was expanding dramatically. From product labeling to web design and market launches, the company started to become known in this market place.

Finding Joint Venture Partners/Buyers

Case Study Project Description

American Recycling had several business projects in development. They owned an industrial land site where they produced wood chips from secondary source lumber recovered from riverways and landing debris after logging. The need for wood chips at affordable prices was growing.

Project Problem

Several generators were moving into the market with urban wood waste chips. American needed to quickly secure their source of supply and acquire long term sales contracts to ensure the future growth of the business.

Solution

We showed them how to do a competitive analysis and build a new market niche for the company using our knowledge of the pulp and paper industry. We developed a marketing strategy on how to develop a network source of supply and get the pulp and paper mills to move quickly to sign purchase agreements for their chips.

American Recycling had an opportunity to capture a unique market niche as a flexible generator supplying a new source of original wood chips in a very high quality form. This niche is very different than those recyclers using urban wood waste. Their chips are more shredded and stringy where the original species origin is unknown. On the other side of the playing field are traditional sawmills who can supply a high quality chip but sell it in the same form from the same dwindling sources of supply.

American Recycling’s opportunity to carve out a niche was dependent on their ability to remain flexible by creating a number of different products. We developed a new strategy to promote the sale of these chips to pulp and paper mills by taking control of designing a new sales and contractual process. In order to bring this market niche into existence they needed to develop some distinct ways of doing business and differentiate themselves in all ways to the pulp and paper mill used to doing business one way with pre-set contracts.

The market opportunity for American Recycling was dependent on having a regular consistent and courteous pickup system for “unprocessed” wood that identified source organizations could rely on to come pickup their wood waste. The goal was to get both opportunities under contract.

The wood waste generator was American Recycling’s lifeline to cashflow. We performed research to understand how to secure their source of supply. These suppliers had several options for disposing of their wood. American Recycling had to learn how to cater to them so they would keep supplying their waste wood. American Recycling’s staff needed training in managing and maintaining this customer service system in order to ensure continuity and success. Each generator (supplier) had different requirements for the pickup of their wood waste. Some, such as contractors, wanted direct drop-off or a container placed right at their site. Others wanted to put it out on a certain day and be sure it was picked up regularly. Larger suppliers needed more efficient systems in order to guarantee that American Recycling could have regular access to the wood.

The company also needed good relationships with independent haulers who would be willing to cater to this customer service plan. We created a reward system for getting new sources of supply and recognition for duty beyond on the call of service. In return they received guaranteed contract work, and other perks that will maintained their loyalty. We also did a cost/benefit analysis to determine whether they should eventually have their own fleet.

Result

We re-branded the service with a name not associated with recycling, since the primary products are not recycled sources. The name had to be more memorable than “wood waste pickup” which was vital to differentiate it from Teamster controlled waste disposal services. The name also had to set them apart from urban wood waste recyclers and traditional sawmills in order to create this new market niche. All contract drivers carried the new name and logo on their trucks and uniforms. They gave out logoed hats and jackets to new suppliers.

We set up an information program that aimed to educate as well as provide a service to wood waste suppliers and developed a database of potential sources. A letter went out to all potential suppliers describing how the service worked asking for their participation with putting out materials for pickup. 40% responded. We then used a monthly reminder postcard and calendar of pick up dates. Every month, the company distributed a case study on where the wood was going.

Concurrently we also designed and implemented a chip contract marketing program to acquire demonstration sites and pilot tests. We set up industry roundtables informally at pulp and paper mills to discuss the pending problems in finding quality chips for paper making. We invited the press operators, paper makers, buyers, environmental managers and the marketing people to discuss working with this new source.

The goal was to close the session with a schedule confirmed and agreed to by all parties as to how the testing will begin and move through to identifying the definitions of a successful test and the first purchase. This strategy did yield two supply contracts after about six months of effort.

Introducing Environmentally Smart Substitutes into Established Industrial Product Markets

Case Study Project Description

Imtek was studying what new market opportunities might be available for a crushed glass blasting application. The owner had a production plant to receive, sort and crush the glass. He could produce one ton per hour and estimated that this prototype plant could produce 2000-3000 tons per year. He had spent time researching the markets where silica sand, ice, nickel slag and CO2 was used for blasting.

Project Problem

Imtek needed to find a profitable market after all the research they had done to prove that recycled crushed glass could be an environmentally-benign substitute for sand-blasting and chemical stripping. However, the markets that these materials operate in are commodity oriented and well-populated where the average price was $60 to $80 per ton. At this price, Imtek needed a production plant that was able to produce 15,000 tons of crushed glass per year. The capital investment required to fund the plant development, market penetration and labor would be quite substantial in the face of a flat market where nickel slag was an abundant, cheap alternative source. While Imtek was considering this kind of operation, we pointed out that the challenge of managing production costs in a commodity market is a fine art and even the pulp and paper mills absorb losses when raw material costs go up. Imtek could not afford that strategy. The debt load that the company would have to carry to develop this level of production would be crippling in the event the cost of getting and processing glass went up.

Solution

We suggested to him that he grow slowly with the one plant and look for markets that had yet to use blasting as a form of stripping agent because the technology or source material wasn’t fine enough to prevent surface damage. We determined that the market niche opportunity was to develop custom blends for different applications and to work with industries to help them make the transition from chemical stripping to crushed glass blasting while refining his screening process for their requirements. In this way, he could charge for his knowledge and services and capture supply contracts for the long term. We also suggested that he supply the services to recover the spent glass after use and re-generate it if possible.

We did some informal research with the aircraft maintenance industry and discovered what could be a very sizable market if Imtek was willing to work with companies in this industry to develop the right mix and provide training and support in it’s application.

Aircraft, under FAA guidelines must not fly unpainted and must be repainted every other year. Aircraft maintenance and modifying companies used a product called Porco. It is a chemical gel that is applied to the skin of the aircraft in a highly controlled environment. The aircraft hanger must be completely sealed. The people applying the gel must wear pressurized suits that are attached to compressed clean air supplies. The drainage system in the hangar must be sealed and the EPA has observers outside the hangar testing for any kind of toxic spill or release of toxic air. In the event that any mistake is made with the solvent, the company can be fined $10,000 or more per incident. This entire process is extremely expensive.

On average, one plane per day goes through this tedious paint removal process. It was so bad that some modifiers were looking at other kinds of technology such as crushed walnut shells run through a sand blasting machine, glass beads, plastic pellets and a very expensive computerized heat and pressure machine from Japan that absorbed surface paint. The walnut shells had been effective except that they could not be reused and were hard to obtain. Plastic pellets didn’t work and glass beads were expensive.

Crushed glass in a blasting machine would be highly effective from a cost and time perspective. However, the crushed glass must be able to safely clean aluminum with copper additives, titanium and magnesium. It must not affect the aluminum seals that mask off the parts of the plane that they don’t want cleaned.

We determined that the organizations that have the most to gain from testing crushed glass as an alternative were the airlines that perform their own maintenance that need to reduce their maintenance costs. The second target group was the modifiers that run the risk of EPA fines and a huge capital expense maintaining air tight hangars and pressurized suits.

We recommended they set up a testing environment with regulators observing and then video tape it. They prepared three metal surfaces covered with the same paint used in industrial and aircraft applications. Using the video camera’s built in timer to clock the process of sand blasting, crush glass blasting and chemical application they were able to prove their concept. They documented the environmental damage during and after each process.

Results

The tests were successful. We recommended they set up a new blasting system for the company under a contract for services and supply of the glass. This meant that Imtek would charge a set-up fee which would include custom blending, advice on working conditions, space set up, blasting machinery purchases, safety equipment required and training in how to handle and use the crushed glass. A purchase agreement for buying crushed glass at guaranteed rate for at least two years was to be part of this package. Imtek would do an analysis of the amount of blasting they do per week and help them determine the correct amount to order.

We suggested that the amount to charge should be based upon on hourly fee for the time it will take to do the entire setup and provide the training. The price of the crushed glass should include the processing costs for their custom blend, a margin on Imtek’s cost to acquire the glass which would provide enough room for cost increases over two years, the cost of delivery to the customer’s site, any special packaging associated with their order and the cost of recovering the spent crushed glass. At the time, no one else was providing this level of service with this material, Imtek was able to set the standard and the price without being compared to sand blasting which didn’t represent the level of knowledge and value-added service these industrial customers needed.

The name Imtek isn’t easy to remember or easy to associate with the product and service offering. We suggested rebranding to include the words consulting or services in it to ensure people viewed the company in a different light than just a glass recycler, glass crusher or other commodity oriented framework.

It was extremely important in defining and defending this new market niche to add value and service at every point of the client engagement. This meant that a quality customer service strategy from initial phone calls through to the pickup service for spent glass reflects and supports the customers’ needs. Credibility, consistency, integrity, honesty, cleanliness, flexibility and responsiveness would create customers and ensure their loyalty. Once the video tape was available, we suggested putting it on their website.

Imtek was able to find several demonstration sites and was awaiting EPA approval for use on airplanes. Today, using crushed recycled glass is standard for sand blasting and as a strong substitute for chemical peeling. Imtek pioneered this transition.

Ocean Energy in Canada: Pathways to Commercialization

Case Study Project Problem

The Ocean Research Energy Group had recently formed as a group of technology developers eager to contribute to Canada’s alternative energy effort. They had been having trouble making the case for growing this industry and receiving support from the Canadian Federal Government. Industry Canada wanted to open a dialog and provide some resources for the group in terms of education about commercialization, knowledge about funding sources and increased understanding of what the government needs to see from the group.

Solution

The Pathways to Commercialization Workshop which brought together stakeholders from industry, utilities and Industry Canada has been exploring whether there is sufficient merit to build an industry and aid the commercialization of Ocean Energy in Canada. They engaged Lorraine Rieger through the Centre for Sustainable Communities to determine where the funding might come from for commercialization, provide a status report on ocean energy research and commercialization around the world and facilitate an invitation-only forum to educate all stakeholders about the opportunities, road blocks and needed resources. The goal was to open up a collaborative dialog and determine next steps.

Building on the momentum developing in British Columbia’s Ocean Energy sector, this first ever meeting of Canada-wide stakeholders took an in-depth look at how private and public sector financing and funding programs can foster the development of these exciting technologies. Key discussions and analysis will took place examining the strategic constraints while attempting to gain various perspectives for charting the course ahead for this emerging sector.

Result

The assignment entailed researching worldwide funding sources for ocean, wave and tidal renewable energy technologies. This data was analyzed to determine the kinds of projects that were getting funded. Then the team developed a path to commercialization road map and combined the research to build a picture of the kinds of resources available at each stage of the map.

By recruiting 20 speakers from government, industry and academia around the world, we conducted a workshop to deliver this knowledge and facilitate a discussion of how developers could help themselves by working together to develop the ocean and renewable energy industry in Canada. The workshop was complemented with a searchable database to help technology developers understand which investors were funding ocean renewable energy around the world.

Industry Canada has now moved to the next step and has commissioned a study to determine the economic constraints, current value chain and opportunities available in Canada to support the development of an ocean, tidal and wave energy industry.

Introducing New Consumer Products in a Highly Competitive Market

Case Study Project Description

This company used recycled newsprint to create a number of different pet care products. They had gotten good results in the specialty pet area with their small animal (gerbils, rabbits etc.) bedding and had a large distribution network in this marketplace. There were no major competitors in this market that could provide an odor-free solution at the time.

They wanted to get their second cat litter product made from wood/pulp waste that looks and feels like clay into distribution. It could be flushed down the toilet instead of having to be thrown out with the garbage. The product lacked a positioning statement next to the clumping litters and clay litters, a brand name, and the right kind of packaging.

The third product was a ‘wonder’ towel that absorbed grease, oil, paint and water on one layer and wouldn’t leak it to the next towel. It could be used over and over again without decay or tearing. They needed to define this product’s ideal positioning, target market and distribution system and then package or market this item without a lot of expense.

Project Problem

Absorption Corp. needed to do more research into the buying habits of discounters like Wal-Mart and the Pet Care industry to provide them with some recommendations and a focus to determine if this was a worthwhile investment for their shareholders. Lorraine Rieger recommended a step by step plan that took them through the product research phase through to a product launch strategy if the primary investigative research proved that the product was viable.

Solution

At issue is whether there was room in the market for another slightly different product and what aspects of the product would have to be the most appealing for vendors to create the space, i.e. high margins and/or the latest and greatest development in cat litter. Lorraine accessed grocery store research on the topic and suggested that the company sponsor a local cat show by offering to be the supplier of the cat litter. They surveyed the attendees at the end of the show to see how their felines responded to their new litter. We set up independent testing to ensure it was truly a flushable litter.

From this research, we selected the best targets based on financial analysis and a developed a new pricing system. The products were all positioned as premium solutions that met user needs and serviced the “green” market as a better substitute for traditional litters. The towel fit many markets and separate branding identities for each were developed for automotive, consumer and industrial use. Each product gained 90 day trials in grocery and other consumer stores as well as with industrial distributors. We recommended packaging improvements for ease of handling and included the absorbent towel in the kitty litter as a pan liner.

Result

The first kitty litter product did not receive good reviews at the cat shows, technical tests and from user feedback surveys. The company re-engineered the identified problems and re-issued the products. Today the company has seven different pet litter products and five different markets for its absorbent towel product all of which achieved national distribution. They have become a significant buyer of the country’s wood waste.

Can an Alternative Energy Business be Built on a Nasty Waste Stream?

Case Study Project Description

A large private utility wanted to expand into the wastewater business and was looking for opportunities at every point in the waste stream.

Project Problem

Biosolids, or the sludge that is left after wastewater treatment processing is currently be land applied in many urban and rural areas. However there is more supply than demand despite the incredible growing properties of Biosolids. Dogged by rumors of contaminated land, environmental liability lawsuits in property transfers and feuding neighbors, this utility wanted to explore the potential of creating a business that could transform biosolids from a costly waste stream that has to be trucked many miles (creating greenhouse gases) in order to be carefully ‘disposed’ of. Was Biosolids a raw material available for free that could be harnessed for more profitable and safe uses?

Solution

We have done several biosolids as business solutions for a public and private enterprise. Our position is that sourcing and controlling a large volume of supply is an essential element to making the waste to energy solution profitable. Waste to Energy is the best solution for large volumes. Otherwise it is a commodity business at the mercy of the horticultural, golf course and agricultural markets where it is only marginally accepted after 15 years and more of evidence supporting the high crop yields Biosolids enables.

There are a few technologies available today that can convert Biosolids to energy. Our work has been to identify those technologies and develop a broad based strategy to transform this into a business solution.

Result

This project to transform Biosolids into a waste to energy solution is on going. The technology is not quite advanced enough at this time. However the opportunity is viable with the right volume of materials and the right capital structure.

The Boss Blames Others

Case Study Project Description

A mid size professional service company had a senior manager who was not trusted by co-workers or her direct reports. While she had been there for many years, her performance was difficult to assess and appeared to be on the decline. The owner requested that we discover what was at the root of the mistrust and collect information from all parties.

Project Problem

Employees and peers suggested her tendency was to obfuscate requests for status reports on her work. She regularly missed deadlines and assigned fault to others. It emerged that she had withheld critical information from people to appear “in the know”. In discussions, she tended to embellish stories about other people or ascribe motivation to others that was not present.

Solution

The owner initially retained us to work with this individual.  We worked with her to quickly move beyond seeing herself as “the problem”. Her progress was swift, and the other management team members saw the changes and wanted to know what she was learning that they didn’t know. The process was expanded to include the rest of the management team.

We used our challenging form of one-on-one coaching to discover what was behind the adversarial approach. Her style over the years had been to assume control was needed and that if certain jobs weren’t done, the company fortunes would decline. She had the owners interests at heart, she said. As the years went by and new people came into the company as it grew, in her mind her role and therefore her sphere of authority appeared to be diminishing. In the beginning, when the company was small she had to wear many hats and received a lot of acknowledgement and gratefulness from the boss.

Now, with so many more people to take on the roles, her power and control had to be shared. This perceptual decline in value to her boss led her to be resentful of others. In an attempt to regain this control, she devised ways of working that to others appeared unproductive and mean-spirited.

We helped her to understand the dilemma she had set up for herself in not acknowledging her own contributions for herself. She soon began to see that the naturally evolving state of the company was the reason she had less power and control, rather than any one being against her.

Results

As she let go of these perceptions, she was able to become productive and conciliatory again to the staff. It took time for others to change their approach to her as lack of trust is not eliminated over night. In time, as she continues to apply her Smart Team tools, the office will see her as an important part of the company’s growth.

We Can’t Fire Him, We Need Him

Case Study Project Description

With 17 years in a vital lead role of multi-million enterprise, the executive team could not afford to let the man go. Yet he was alienating all their department heads with is punishing style and ‘gotcha’ attitude toward their work. He needed to be part of the strategic team, not the guy finding every fault.

Project Problem

What’s the best way to deal with difficult employees? Fire them? Hope they quit? Companies today spend thousands of dollars letting people go and thousands more finding and training new employees. Or they spend everyone’s patience waiting for the person to get the hint or just leave.
There is no guarantee that the new people will be any better ‘fit’ than the old people.
We know that using our Smart Team tools can turn a difficult situation around. Turnarounds can save your company thousands of dollars, but people hesitate to invest in the process. How much does ignoring the problem or firing and rehiring cost?

The Executive Team was concerned that the leader of the audit department was becoming increasingly confrontational. He had a much different view of the audit function than what the team wanted. In his role, he was more adversarial than helpful, delivered withering assessments after the fact and viewed his role as that of watchdog. The CEO wondered if there was a way to get him to understand what they really needed from him and the audit function. The executive team thought the only solution was to fire him: an expensive exercise especially when finding and training a new senior auditor would take months and thousands of dollars.

Solution

The Executive Team thought that they just wanted the abrasive interactions to stop. But what they really wanted was an auditor who could help each of the product areas with strategy, prevention and advice. They wanted him to get involved at the beginning of their projects to prevent problems, not at the end with his criticism and blame. While there was some receptivity to understanding what it was that was contributing to the problems, they needed him to deliver his news in a collaborative fashion so that their teams could learn from him, rather than resist his advice.

Was it possible to change the way the auditor communicated, contributed and operated within the organization? Or was this just asking too much of a senior official already set in his ways?

In our view, if the individual is willing to change, then a turnaround is possible, given time. In this case, the auditor knew his job was on the line. He thought that the Executives were the ones with the problem. They were uncooperative and blocked him from doing his job effectively. They just wanted him to sugar coat everything and let it all slide. He thought their attitude was just part and parcel of the attitude towards auditors and resigned himself to the idea he would not be well liked, no matter what he did.

We anticipated this would be a four to six month exercise. Our first step was to meet with the auditor. Once he let down his resistance he was able to agree to engage at least to see what the process was about. Next we met the CEO and HR Vice President to collect their observations and to hear other sides of the story. Then, in order to further uncover and evaluate the root causes of the issues, a survey was sent to the senior executive team to get their feedback on the audit function and manner in which the leader and his team worked. This survey also doubled as a baseline measurement that would allow us to determine how he was progressing in his change effort over time.

Using our tools in a one-on-one coaching process, the auditor was challenged to see his blind spots. Simultaneously, we helped him to deconstruct how and why he might be getting these reactions from his colleagues. He began to see how his thought processes and roles that he assigned himself and others actually contributed to continual conflict and adversarial relationships. As he learned how to use the Smart Team tools he was able to not only see how what he said and how he thought about others caused the conflict, but he started to try out new approaches and perspectives to deal with his challenges.

To clean up unfinished business with colleagues, he was taught our Get Curious process and went to see each executive to find out what they really wanted. He created a new atmosphere within the Audit Unit that allowed the Executives to map out strategies with him for how the audit function could participate with their divisions in helpful and strategic ways.

Result

It was this individual’s willingness to take responsibility for his part in this chronic conflict and his decision to make changes that was the key to his success. Many of the executive team also realized and committed to learning to work with him in a more collaborative way. The final benchmark survey found that 90% of the executive team saw very positive changes in him and were getting what they needed from the audit function. We worked with him to build a plan for how he would sustain these changes over time. Throughout the entire process we met with the CEO and the VP HR to get their feedback and keep them apprised of progress.

It’s Not My Problem, He’s the Problem!

Case Study Project Description

The leadership team of a company recently acquired by a large multi-national was having fewer and fewer meetings. Members put off meetings, but managed to achieve results by meeting offline with each other. Cynicism was rampant. The corporate slogan was the butt of jokes. Yet they were the top producing division of the company. However, despite constant requests to expand in their territory the head office consistently refused them the capital or the time of day to talk about the expansion.

This fact sat like a lead balloon on productivity and creativity.

Of 12 people on the team, there were four separate small camps each with their own culture and competitive way of working. The camps often made derogatory remarks about the other groups and especially about one individual.

Project Problem

The head office was now demanding a cohesive expansion strategy that required they all get together to create and plan it. The regional manager attempted a first meeting, but when it erupted in insults and conflict, he asked the HR manager for a better solution. The company called upon us to see if we could unravel the problem. What we discovered through one-on-one coaching sessions was that each person blamed someone else on the team for not meeting their own unspoken expectations and standards. Since they couldn’t talk about what they wanted from each other, the resentments kept piling up.

Solution

Organizational change begins at the individual level and ripples out from there. We used our challenging form of one-on-one coaching and a series of assessments to help each member of the team uncover what was so difficult about meeting together. Many claimed that there was a bully in their midst. Others cited the wholesale changes made by their new owner without their feedback or input.

The ‘bully’ knew he was seen as such. His style of communicating was Cassandra-like, always suggesting doom and gloom around every corner rather than delivering why he thought there were problems. When he wasn’t heard, he resorted to insulting others using toxic humor in the vain hope that this approach might get his message across. He learned that he was not communicating his real concerns and that people were actually afraid of him. The day we helped him to discover how to speak to the team in a way that he could be heard was the turning point for this team to begin working together effectively.

For this turning point to occur, others had to put down their swords and take responsibility for their part in the blame game. We helped each person to focus on what they really wanted to achieve in their role, rather than on what they didn’t like that they kept recreating with the blame game. They then learned how to talk about these issues during meetings and how to use a collaborative process to share their ideas to create strategies and implementation plans.

Result

It took 10 months for their first group meeting to occur while we worked with each person individually. Fearful to trust themselves, they finally decided to attempt a meeting. We booked the team a two day retreat and managed expectations while we worked on a new vision for the entire team. After this meeting they embraced developing a new vision, breaking through old patterns and learned how to get what they needed from the head office by mentoring their direct reports up the ladder. Rather than being the black sheep in the conglomerate, after two years of re-designing how they worked together, the team finally go the funding and the go ahead for their expansion plan. At the end of the expansion they became the top performing brand and were seen as mavericks in the industry.

Selling a Business Case Studies

Why sell a business?

Our clients have myriad reasons.

One conglomerate bought several in a bundle and one of them did not fit their strategic direction. Another did want the responsibility of running it anymore.

When you are ready to sell there are suddenly a lot more things to think about than most owners would have ever imagined.

Getting Ready for Sale Case Studies

• If we want $8 million for our company when we sell it, what do we have to do now to get that price?
• Lame Duck or Worthwhile Investment?
• It’s Time to Sell

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