Case Study: Consolidation For Capability and Revenue Growth

Client Description

Food Retailer – North America

Background

A successful food retailer had several division, each with their own procurement and merchandising organization. Consolidation and growth of competitive retailers has created a disadvantage for the client in scale, efficiencies, speed and overall capability.

Objective

Develop a vision, strategy and organization design for consolidating procurement, merchandising and marketing while retaining a balance of localized decision making that will provide:

• Enhanced purchasing power
• Effective promotion & pricing (Central & Local)
• A center of excellence for Own Brand development
• Consistent, best-in-class procurement, merchandising and marketing practices
• Increased level and capability of trade funding and supplier resources
• A significant operating cost reduction

TPG Approach

• TPG ‘s team assisted the client in creating vision for consolidation, including the risks, threats and anticipated benefits
• TPG integrated consolidation into the corporate strategy insuring adequate prioritization, focus and resources
• TPG’s designed the consolidated and local procurement, merchandising and marketing organizations
• TPG facilitated the implementation of the organization design, minimizing business disruption and costs
• TPG installed best-in-class practices to accelerate the achievement of the corporate goals

Impact/Results

• The overall consolidation went smoothly and had limited business disruption
• Significant cost of goods reductions were realized from the enhanced purchasing power
• Supplier resources increased considerably enabling more effective business planning including better pricing and promotion
• The retailer achieved industry leadership in own brand development