To put us into situation, we will introduce the related article. We said that this is a case of success, on an internationalization process of an Italian company, related to lingerie sector, and moreover in panty hoses (where became a market leader). After a deep internal analysis and markets, we were concentrated in critical mass creation in media, attaching related markets (high consumption, trendies, referrals), and when the company changed from a textile company to a fashion brands´ company. Changing the company’s culture from a local to a global one, from Italy to the world.

Freezing Buenos Aires

At the first stage, we decide to develop those highly stable markets of lingerie´s consumers in Latin America, with prior brand recognition (through local importers). That’s why Argentina was chosen-and specially Buenos Aires- as the starting point to media development: a city with a strong consumer culture and a reference point in the region.

We decide to manage an integrated team (on strategical and operational units) working on the legal aspects and logistics (warehouses, distribution network´s qualities) the first unit and -the second one- on the marketing plan and launching, with particular emphasis on distribution channels for the entire region (Argentina, Uruguay And Chile).

BW Virals: Freezing Buenos Aires

Since this process had emerged in Italy, the landing (the start up in Buenos Aires) began during the southern summer (with no seasonality), allowing the immediate execution after this season. This plan contained a viral cutting edge action, designed to be run within the first cold days; considering that the demand of this garment depends on seasons and weather, being very influenced by trends, fashion changes and urban culture.

The process began in viral when it was involved in the distribution network, the media, as well as to a segment called urbanites (key actors in the urban scene as artists, performers, images´ hunters). This pilot plan-known as 360º marketing action- was meant the goal of landing in this city as the spearhead of the entire process of internationalization, which would be replicated on following European and American cities and as feedback analyses for future actions to the Italian cities and therefore, as the basis for new urban viral process.

To reach the target horizon marked by the customer, we had to globalize the viral message making it easy-to-adopt to different audiences and for different age segments, because from the very conception of the virus, its spread would be highly horizontal. For this reason we focus on the derivative claim of its trademark: the surprise. This concept was perfectly paired with the virus concept which enabled a truly consistent campaign.

Strategy: simply, touch and go

This resulted in an urban festival with very high media coverage, based on the sudden exposure of certain stylish urban spaces, involving more than a dozen vans and thousands of red balloons (brand corporate color) with an exemplary communication deployment, reaching media and urbanites with warnings of just 20 minutes in advance.

The anxiety shown by people and media to be on these scenarios was that around noon, that media not related to the campaign began to cover the event. Towards the end of the first event, the response had been overwhelmingly successful, with a high degree of regional positives reviews on the web.

This action was the cornerstone of the campaign and also served as the landing entry door in the region as viral as it had fulfilled its mission: to reproduce and spread itself over and over again.

On January 13, 1999 the government decided to devalue the Real slightly, and the 15th left him fluctuate freely, closing that month at 2.12 reais per U.S. dollar. For those import companies with products from China and Europe those were terrible news. Almost overnight their products were approximately 60% more expensive.

As we have commented in the article “A short recipe to deal a crisis,” that’s when flexible teams, adaptables and imaginatives, leads the way through the crisis with the least possible impact. Those drastic changes could cause a major collapse for an big international organization which used to work with multi-year plans with the strategy set months in advance and a value added product that requires a period of several months of supply. But the holiday period had allowed us a little leeway to redefine the whole strategy of the company and adapt to the new situation.

The decisions taken were:

1. Safely assume a fall in consumption and therefore revenue for the company. In other words: we had had to cut forecasts of production and sales for that year. But that, at the same time, helped to came more realistic with the market.
2. Be adapted to market demand. The manifest coming inflation would generate that consumers were selective with their purchases.Therefore the product mix was modified giving place to product with less cost and price. Searching for products related to the consumers new interests, having a more balanced mix between those entertainment products and practical ones.
3. Generate cash by taking advantage of products that were already in stores. This would also test different price and promotion strategies with very low costs.
4. Be more aggressive in the promotion policy in which both referred to as promotional prices on communication.
5. Renegotiate with international creditors new terms of payment of the debt that was put in U.S. dollars
6. And of course, review relations with business partners: business conditions in the sales channel and communication costs.

That was a slowdown period, were also with investment and growth plans, and we had took other financial measures. But the measures mentioned above, most of them about pricing, helped overcome the crisis and a year later the company was again ready to resume the plans a year before he had to postpone.

But market best situation had also led to the arrival of the most important competitors, so we had to quickly plan and execute the next steps to seize the advantage to be first to install a local office and take the natural next step to be exported.

First Steps

At first the focus was over two objectives:

1. Resolve all legal issues related to organization and the logistics that have to do with offices, warehouses and suppliers.
2. Design commercial activities and realize the strategy to follow in the first year of direct activity.

Both targets had to be ran in parallel to avoid the gap between the end of the operation with a local partner and the start of the activity alone.

So were two teams. The first part ran the operational and administrative. Due to the accompaniment of a local team of consultants all warehouses and suppliers were hired.

The second team was in charge of marketing and commercial area. First of all, we feel the need a distributor that offers service nationwide. At the same time was designing the marketing strategy that passed through the choice of products and the most efficient way to market launch by the obvious logistical challenges and risks posed by the distribution in a country as vast as Brazil.

The decision was to split the country in phases, thus minimizing stock risk. After the product selection was based on the results of market research that told us what was the best choice among the available product that met the likes of Brazilian consumers. And finally reached agreement with key media to ensure successful product promotion.

The result

The big goal came at the end of the first year: we had doubled the products availability, the turnover grew by 30% and also ourself as a team, 16 people being prepared to new changes and being adaptated to changing market demand. In addition, Brazil became the first subsidiary input by the outcome of all of Latin America.

All this was achieved in record time of 8 months since he had taken the decision to launch the new firm. Of course all these figures far exceeded initial expectations.

A Smashing Success

The accompaniment of a local expert team plus the business expertise gave by human resources that came the headquarters were the answer for the internationalization process. Besides, a well planned job, with professionals execution on assistant, gives an extraordinary rate of success in an short period of time, plus saving costs.

Blam Industries had developed a singular accessory to facilitate accessibility to garments hanging in a closet thanks to an simple rotating elongated rod they called ProArm. The product was particularly suited for elder people and those with reduced mobility.

The research and development was entirely done by Blam Industries’s technical department and reached all round high quality level.

The marketing plan was also successful. With a market share close to 60% in the Spanish market, almost every important prospect had become already a client.

Blam Industries manufactured other products as well but it faced a heavy competition from large foreign and domestic producers. The domestic market for the ProArm device was limited though and there were no chance to grow significantly.

The company was thinking to diversify its production into new product lines under only one restriction: All new products should be directed to existing customers and would create synergies with each other.

At the same time, Blam Industries was aware that ProArm’s supply chain could be improved by vertical integration. Some suppliers of raw materials and parts were not meeting the required quality and service level and sales were being done through distributors who did not care much about a low rotation product.

Too many issues to address. Blam Industries found themselves under high pressure to make up its mind and find out the most effective path.

Company background

The first thing to do was to learn and understand the reality of the company. The results Bridgedworld found were;

• The company is an SME with 140 workers and sales revenue of 10 million euros a year.
• It is a long tradition family owned company where the owners were in charge at the management level.
• The position in the market had been achieved after years of steady efforts, careful management and reinvesting profits.
• An Ebidta of 15% was over average industry.
• ProArm was sold as a complement to closets and it was distributed through third parties.
• ProArm customer were basically Spanish closet manufacturers except for a few sales abroad through agents.

Since distributor did not push the product, the company spent time and money keeping a close relationship with the customers. They knew the importance of maintaining a direct contact not only to promote their product but to design new versions anticipating future needs.

The cost of these actions was remarkable due to the high dispersion of and low sales per customer ratio but Blam Industries gave a lot of value to this information.

Mass marketing was out of the question due to low turn out.

Plan of Action

Bridgedworld made an international research to find out to which strategic group belonged this product.

Apparently, the market was highly fragmented. Most of the companies being under a generalist profile and outsourcing the production.

A number of interviews shown ProArm as an interesting product with clear advantages in quality and functionality when compared with competitors.

Many of these competitors were medium to big size companies with a broad range of product lines, most of them serving the same type if customers. They were not giving any special attention to ProArm’s substitutes.

After a deep analysis, Bridgedworld’s proposals were as follows:

A) Define our market: We need to understand our market and answer what we want to be and how we can match both. It is most important to work in an attractive sector in terms of profitability. For a SME this is mandatory as we have to focus a good percentage of our efforts in the short and medium term. Using Porter’s Five Forces framework and a matrix analysis tool help find the right position by determining the industry structure, the competitive intensity and attractiveness.

B) Supply Chain Management: A careful study of all activities along the supply chain, from the raw materials to the final consumer, provide hints on the activities that offer substantial profit potential. Sometimes we add value and others capture it.

C) Vision and Values: Family owned companies frequently fail in transmitting what they want to achieve and engage their people toward a common goal. We need to align ambition across the organization. Full commitment by the whole organization is the source of one of the most sustainable competitive advantages.

D) Define the company’s Mission: What do we do and why. It is important to be aware of our strengths and build upon them.

Strategy

One defined these concepts, the recommended strategy was summarized in the following terms:

1. Blam Industries excels in what it does and keeps an acceptable ROI. Diversifying and increasing the product range will put its leadership at risk and seriously compromise the continuity of the company. The company should focus on its niche market.
2. The supply chain shows critical links that may have an impact on service, supplies with attractive profits and sources for improvement.
   The advise is to invest and take over these processes.
3. The customer base should be expanded in order to reduce risk and create economies of scale. The analytical accounting shows there is great elasticity of cost related to sales volume.
   The advise is to launch an internationalization process.

Internationalization Plan

As a result of the before mentioned proposals and due to the lack of international experienced of Blam’s executives, an Internationalization Plan was implemented with the following phases:

• Select one target market and start actions to introduce the company by Bridgedworld Interim Managers (BWIM).
• Launch a coaching program by BWIM to train Blam’s executives so they can take over the duties derived from the international operation.
• As this process was carried out, a new competency was developed. Blam was no longer just the ProArm’s manufacturer, it was an expert on internationalizing closet devices.
• One of the contents in the plan described the promotional mix to be used to get visibility of the product. It was noticed that there were a window opportunity to sell ProArm to the final consumer through large home improvement chains.
• It was also identified a few large domestic customers in the process of going international as well. A strategic alliance with these companies provided a great opportunity and competitive advantage.
• The increased sales volume brought by the new market, produced sizeable economies of scale and thus larger gross profits to help defend Blam in front of competitor retaliation.
• Once Blam considered its introduction done, a new process was initiated this time by Blam executives. Bridgedworld remained as an advisor during the process.

Note: The name of this company and product have been altered on purpose to preserve the company's identity