Converting operations to sustainable
The current market requires companies to change the way they operate and conduct their business. There is increasing pressure to adapt the operations carried out to the current needs of consumers, to accommodate them even more than ever. This task can be quite a challenge. Using a Swiss dairy company as an example, we will show how to change to a more sustainable and customer-oriented operation quickly and very effectively.
Responding to emerging disturbances
The dairy company consists of a number of smaller Swiss dairy farms, which supply the milk they obtain to the leaders of the dairy market in Switzerland. Until now, for many years, the business conducted has not encountered any major complications or obstacles, which has unfortunately changed. The hitherto favorable business conditions have recently become extremely difficult for the company. Traditional milk is no longer as desirable a product as it once was, giving way to increasingly popular alternative milk products. This is also affecting its price, which is getting lower every year. Another not-so-comforting aspect is the changing Swiss government policy, which in the past focused on protecting Swiss producers from foreign competition, but now these efforts have significantly weakened. Increased competition, lower demand and significantly lower profit is a very tough situation. Regardless of the industry, any company would have many dilemmas in such a circumstance as to how to deal with it and whether there is even a solution to avoid the worst-case scenario of going out of business.
The dairy company decided to focus on reducing its dependence on its existing customers, which are dairy leaders. B2B cooperation was severely limiting the company's options and forcing it to make compromises that were not beneficial overall. Reducing dependence inevitably meant looking for an additional market for the milk produced, which would allow the company more freedom of action. Importantly, the dairy company did not want to give up its current partnerships, so the new venture could not compete with the company's main customers. Finding an outlet that would have these characteristics is not the easiest thing to do, but using the example of this dairy company, it can be proven that it is achievable.
Putting new concepts into practice
The dairy company decided to act quickly and decisively. It was agreed to dedicate three months to finding a new business model that would be most suitable for the company's current situation. The next four months were planned for launching this business model on the market, and thus putting it into practice. This pace was very fast, almost dizzying considering that the company decided to make these changes during the COVID-19 pandemic. However, the difficult conditions did not deter the company from taking concrete action.
The first step that was taken to implement this plan was to conduct a consumer survey. By collecting responses from potential customers and analyzing them, it was possible to pinpoint what consumers' common perceptions are about the dairy company's new offerings. The consumer surveys proved to be very helpful because, thanks to the conclusions obtained, it was possible to develop more than 100 new business ideas that were interesting from the consumers' perspective. All the obtained concepts were once again verified and it was possible to select the 15 best ideas, which it was decided to put into practice. They were properly designed according to the previous guidelines obtained from the research and then presented at a farmers' market to see if the idea would ultimately prove successful. As a result, out of the 15 concepts, the 5 absolute best were selected, which proved to be revolutionary for the dairy company and opened a whole new door full of many opportunities for it.
Once the five main concepts on which the company planned to focus further were distinguished, it was decided to look at them more closely and continue to put them to the test. To this end, social media platforms and search engine keywords were used to reach potential consumers who came to the company through their behavioral patterns and interests. The company prepared prototypes of potential landing pages for five specified product ideas. From the consumer's perspective, it was made to look as if these products were already fully developed, produced and could be purchased immediately. This provided a way to gauge interest in the offerings if they were actually released. The interactions performed by users on the prototype site were analyzed, such as the number of clicks on an ad for a particular product, the frequency of ads displayed, and the overall interaction with the site was tracked. Through these analyses, it was possible to objectively assess whether an actual product launch would receive a positive response from consumers. Especially important was the interaction on the site where potential consumers were asked to enter their zip code to check the availability of the product in the region they reside. By putting this data together, it was very easy to come to the correct conclusions as to which of the five products would be most popular and in which specific locations.
By obtaining this type of information, the dairy company was able to prepare objective reports on individual ideas, outlining their likely chances of success. This enabled the company to make further strategic decisions based on reliable data obtained directly from potential consumers. It was also possible to determine the specific direction in which the company should head in the future to satisfy expectations. Valuable insights were gained on the potential risks that may arise in connection with digital business, so that the company could prepare properly in advance and reduce risks before it occurred.
As it turned out, among the five awarded ideas, the greatest chance of success was attributed to a premium cheese delivery service. It involved offering Swiss cheeses that were not widely available in general stores in Switzerland. Consumers were attracted to this offer because they liked the combination of the convenience of having products delivered straight to their homes and the concept of getting a premium product like fresh cheese from a real farm store. This service was aimed primarily at cheese connoisseurs - it included the option of both a one-time cheese purchase and a monthly subscription, so consumers received a specially selected type of cheese each month that they could enjoy without leaving home.
The dairy company managed to find a niche where the supply for specific products was much lower than the demand. By approaching the challenges they faced in an innovative way, they introduced something completely new to the Swiss market, which proved to be a huge success. Until now, acquiring premium cheese was only possible by going in person to one of the many traditional stationary cheese stores. Acquiring this type of product online was bordering on almost a miracle. The dairy company offered to order cheese via any electronic device, using an app or website, without having to leave home. As it turned out, consumers are willing to pay for good quality cheese and are eager to take advantage of convenient solutions.
In order to bring this idea to life, it was necessary to deploy a developed multidisciplinary corporate startup team as soon as possible. The dairy company's team consisted of product managers, venture-building specialists, designers and online marketers, among others. The close cooperation of all team members made the company's transition to a direct-to-consumer business model incredibly easy and fast. Every decision was made carefully, consulting with everyone to consider all necessary issues.
Since the dairy company's new product was aimed at cheese connoisseurs, the manufacturer wanted the product to reflect the premium character as much as possible. Appropriate, high-quality packaging was designed, created with materials such as exclusive paper and silk. Products were also accompanied by personalized, handwritten courtesy cards to add even more luxury. Special focus was also placed on making the transportation of the products as safe as possible. The cheeses were transported in specially designed, innovative bags. They were made from recycled organic hemp fibers and thus an environmentally friendly material. The bags also included one frozen bottle of fresh water to keep the product at a constant temperature. This allowed consumers to enjoy a supply of fresh cheese.
Challenge successfully completed
Initially it was assumed that the entire process of putting the new idea into practice, starting with obtaining the necessary information from the consumer and ending with the release of the final product, would take the company three months. Faster implementation seemed impossible, and a period of three months was an optimistic perspective rather than a realistic approach anyway. It turned out that the company exceeded its wildest expectations and managed to realize the desired goal in just six weeks. During this time it was possible to meet all the main assumptions of the plan, and then only to deal with making the necessary corrections that came to light while the product was already released. Fine-tuning the execution and sales operations carried out allowed them to be even more streamlined.
How did the dairy company continue to fare? Well, within the first four months of the introduction of the new service, as many as 40% of all consumers decided to permanently subscribe to the premium cheese delivery service. Despite having a very limited advertising and marketing budget, the company managed to reach many thousands of customers in its first year of operation. The service was very popular especially during the winter holiday season, when more than 1,000 orders were filled in one month. Less than two years later, the company still has a premium cheese service that is extremely popular. Most of the customers who decided to subscribe at the very beginning continue to subscribe up to this point, which can attest to the consumers' satisfaction. All indications are that the dairy company will continue to thrive in this direction.
What's more, the dairy company, influenced by the huge success of the new service, has also decided to expand as a global brand. The company is entering into partnerships with a number of new, smaller artisanal cheesemakers. Establishing this type of relationship not only allows the dairy company to sell larger quantities of milk but also to buy back cheese from the cheesemakers, making it possible to expand its offerings even further. This strategy has proven to be a good idea because with more cheese available, the company has noticed that consumers are more willing to buy more products. The dairy company has gone a step further and, in addition to the sales themselves, offers its consumers various cheese tasting events.