Case Study
Developing Profitable Products
A manufacturing business was experiencing pressure from a large customer to reduce it price on its prime product. Price reductions would have meant product margin would be a lot less than 20%, which threatened the viability of the business.
Henley Partnership analysed the drivers of product sales and opportunities for margin improvement, establishing options for the business to pursue to improve profits. Working with the business they optimised Supply Chain and Product specifications, agreeing revised suppliers terms to increase product margins.
The outcome of the improved margin was that the business was able to handle price pressure from the customer, and in addition sustain promotional activity to drive growth in sales.