A European market leader in the cultivation and marketing of fir and spruce from Denmark had acquired a company that was well established on the French market in 2014 in order to further internationalize the business. In the following two years, the business developed as disappointing and very loss-making. In addition, the post-merger integration was made more difficult by the fact that the French shareholder of the acquired company was no longer available to manage the company during the transition period, contrary to plans. The interim manager, who is originally from France and lives there, was therefore hired at short notice to realign the business for the 2016/2017 season and make it profitable.
Numerous reasons identified for previous failure in France
In the analysis, the interim manager was quickly able to identify numerous reasons for the poor development of the acquisition. In particular, the Danish company had insufficient knowledge of the French market and the French commercial and corporate culture. In addition, there was a lack of communication between the subsidiary and the parent company. This also meant that the subsidiary was not connected to internal processes such as the ERP systems or the customer relationship management system.
Extremely unbalanced account portfolio and inadequate cost control
In addition, the portfolio of key accounts was extremely unbalanced. With a good 60 percent of sales coming from a large supermarket chain (Hypermarche), the company was heavily dependent on this customer.
Furthermore, there was a lack of cost control. One example of this was the very loss-making operation of seasonal sales in pop-up stores in supermarket parking lots. Another reason for the poor result was the poorly organized and managed sales department with a sales team scattered across 3 locations.
Reorganization of the sales department based on a comprehensive market study
After analysing the errors, the interim manager first developed a comprehensive market study. It turned out that the company's core market was not sufficiently covered in terms of market presence. Although important pop-up shops were operated in the parking lots of large supermarkets, there were no direct deliveries to retail centers. In addition, sales channels were hardly aligned with the targets (garden centers, DIY supermarkets, hard discount stores), although their cumulative market share was significant and therefore appropriate accounting seemed appropriate.
In the next step, the interim manager set about reducing the dependency on a few major customers. He identified alternative growth potential, including in garden centers, DIY stores and discount stores.
He also evaluated the sales activities. On this basis, he drew up a sales plan that covers all sales channels and is regularly reviewed. At the same time, the interim manager set quantitative targets per channel and target customer for each sales representative. He also accompanied selected sales managers to meetings with important customers. He discussed progress in regular follow-up meetings. Finally, the interim manager also reorganized the management of the sales team.
Intercultural understanding improved through targeted communication
The lack of mutual intercultural understanding was one of the main obstacles in the collaboration. To overcome this challenge, the interim manager organized regular sales consultations with the parent company. This included online contacts as well as meetings in France and other European countries.
The interim manager initiated extensive training for the French workforce, particularly with a view to establishing and expanding the use of the Danish parent company's internal CRM and ERP processes.
Revenue growth realized - break-even achieved within 2 years
The interim manager's initiatives bore fruit after just a few months. The new subsidiary's products were listed in several important retail chains (food retail, DIY and hard discount). At the same time, sales productivity increased - with falling personnel costs.
Tighter cost control of operating expenses and comprehensive cost planning improved the results of the seasonal pop-up stores. The forward-looking planning also made it possible to reduce personnel costs in the winter season from 66 to 50 percent of turnover.
Through the realignment of the subsidiary, the interim manager was able to improve the result by a total of 1 million euros within 2 years. After the mandate, the subsidiary covered its costs - with prospects for growth and increased earnings.
