A German perspective
A meeting took place between Tom Eden and Willi von Menzel, Managing Director of Parteisch Germany, at Munich on 31 August 2002.
Willi von Menzel was clear about why David Stewart had left the company.
His belief was that he did not keep enough control of his range of products and he was more interested in having a bigger range than competitors and even other colleagues within Parteisch International. Willi said that Christoph Posten saw his business expanding in the UK and this was sufficient reason to believe that David Stewart was succeeding and leave him alone.
Tom asked Willi about the possibility and sense of establishing a single range for Europe. Willi von Menzel claimed that he could not sell what the UK or Belgium was selling and it was not possible to have a standard
European range because of different markets and different customers.
He went on to say that he needed to control his products for his customers and in any case, Germany had different needs from the rest of Europe.
The Belgians, he said, did not understand German buyers, prices or requirements and that is why he kept a careful and tight control of his business in Germany. His customers were mainly cash and carry and he did not sell to the large retailers because they did not want their type of products.
A Scandinavian perspective
A meeting with Peter Indgren, Managing Director of Parteisch Scandinavia, took place in Munich on 31 August 2002. Peter Indgren was keen to ask Tom Eden if he had any stock that he could let him have at ‘a good price’. He said that he would take a container load of one type of prod- uct if he could let him have samples and a range of colours. He claimed that he could always sell stock at the right price because he did not add large margins. He wanted to help reduce UK stock.
Peter Indgren said that when he first joined Parteisch International twelve years previously, he used to buy a container load from Belgium and sell them in bulk. He always covered costs and he always sold a bit more every year. Christoph Posten was satisfied with this arrangement and this suited Peter because it was not difficult and gave him a good lifestyle. He said that he did not know what David Stewart had been doing because there was no point in producing and buying so much stock and not being able to sell it. This was the reason that Peter had never wanted a factory. There was no point making things complicated.
Peter Indgren believed that Jan Straaten was making life too compli- cated and suggested that Christoph Posten wanted a simple life simply selling the products that he made and he was content with a modest profit. Everyone should buy their products from Belgium and keep it simple. He believed that if David Stewart had not opened a factory then everything would have been fine. A factory simply made life more difficult.
Tom pointed out that markets had changed and they wanted different products. There were new opportunities. Peter was adamant that it would always be possible to sell what the Belgian factories made.
Both these Managing Directors, Willi von Menzel and Peter Indgren, were apparently left to their own devices in a similar way to David Stewart in the UK. They have both been encouraged to work in their particular ways by the owner of Parteisch International and they were content to continue on this basis. There is a lack of understanding about what has happened in the UK and they saw no reason for changing the way they
Parteisch International and Parteisch UK 145 work. They each had different approaches to their respective markets.
In Germany it is defined as cash and carry with retail multiples ruled out. Importance was attached to the need for a German operation to supply German products to a German market. In the case of Scandinavia, there was a more relaxed approach to the selling of products to whole- salers with one-off delivery of products and limited repeat orders. There seemed to be no consistency, no control and no common direction across the company.
A Belgian perspective
Tom Eden met with Jan Straaten and Ronald van Strek at the Belgium Head Office on 1 September 2002 to present the preliminary findings of the UK market and a plan for the way forward. The presentation made by Tom Eden included a marketing audit and an outline of the key areas.
A suggested plan for the next twelve months was based on a strategy of differentiation in the retail market and cost leadership in the wholesale market. The meeting agreed that this plan should be adopted in the UK:
1. Organizational goals should be achieved by delivering the needs of chosen target markets more effectively and efficiently than com- petitors.
2. The establishment of 50 per cent of sales turnover in supermarket, department and variety stores over the next period of three years (starting with 15 per cent in the first year).
3. The doubling of average net margins on sales turnover by the end of twelve months.
4. The reduction of the number of company-made items in the UK range by 20 per cent and reduction of the number of non-company products by 50 per cent in the first year.
Three key positioning strategies were agreed based on value disciplines of product leadership, customer intimacy and operational excellence (Treacy and Wiersema, 1993). It was agreed that all three values were currently well below industry standards and in need of considerable improvement. The primary value was considered to be product leadership in selected target markets. Immediate action was to be taken to establish a differentiated range of products in the UK aimed at specific market categories or target markets to be available for supply by February 2003.
It was recognized that there was a wide number of other issues to be acted upon and an integrated approach was required. It was agreed that the approach would be supported by the establishment of
structured policies in chosen target segments of the market, namely multiple stores and supermarkets; the establishment of category account management in target markets; product development and management aimed at target markets. These policies would be driven by appropriate sales forecasting and planning, financial planning and control, order processing and distribution.
The meeting agreed to review the stock situation over the next twelve months and look at combining ranges of items with Belgium and the rest of Parteisch International before the end of two years.
Jan Straaten expressed his pleasure with both the pace and direction of progress. Ronald van Strek left the room for another meeting. Jan Straaten told Tom Eden that he was looking forward to working more closely with him and that it was important to start making progress towards achieving a more profitable route because apart from anything else, there was a need to deal with the high stock levels and concentrate on a core range and a common catalogue for the European market and possibly the US market. This would give huge cost savings in almost all areas of company activity as well as recognizing the changing nature of the market.
The agreed plans are consistent with those of Belgium and the ideas of Jan Straaten. It is plain that Jan Straaten conceives an integrated company plan across Europe that embraces differentiated and cost lead- ership strategies for identified and selected markets. He wants a com- mon core range for the European market at least if not the US market but he is taking a long-term view of the implementation of change within the company.