Success cases with dynamic business modeling

00:08:22
https://www.youtube.com/watch?v=N-IPrGXog7k

Summary

TLDRThe video outlines several real-world cases where strategic modeling was used successfully to overcome business and organizational challenges. These cases span various industries, including pharmaceuticals, banking, and aerospace, demonstrating how dynamic pricing models, staffing strategies, and business forecasting can preserve revenue, increase profits, and stabilize operations. The methodology also applies to the public sector, illustrating its versatility in addressing large-scale staff shortages and improving service delivery. Historical performance evaluation is key to modeling future trajectories and improving outcomes.

Takeaways

  • 💉 Pharmaceutical division used dynamic pricing and competitive strategies to manage market competition.
  • 🏦 Consumer bank accelerated profit growth by expanding expatriate services.
  • 💼 Investment firm adjusted strategy to prevent closure and enable profit.
  • 🚀 Aerospace company reduced staff turnover with improved hiring and reward processes.
  • 🔥 Heating equipment company outmaneuvered competitors in a saturated market.
  • ⚡ Power distribution industry reversed reliability decline without sacrificing cash flow.
  • 📈 IoT startup accelerated market penetration with strategic modeling.
  • 🏥 Public services anticipated and managed staff shortages with strategic models.
  • 📚 Corporate law firm productized services to enhance offerings.
  • 🔮 Strategic modeling crucial for future performance forecasting and improvement.

Timeline

  • 00:00:00 - 00:08:22

    The video discusses real-world applications of a strategic approach in various industries. A major case involves a company dealing with a new competitor in the travel vaccine market. The company risks losing significant revenue due to competitive pricing from a rival, representing a strategic threat as the product constitutes a substantial part of the division's cash flow. To counter this, a model for dynamic pricing and tactics to undermine the competitor was created, reducing the expected loss to under 20%. Another case involves a consumer bank leveraging a model to justify increasing resources for expatriate banking, leading to a significant rise in profits. An investment firm facing closure after market downturns mistakenly implemented broad budget cuts, leading to further issues. Instead, a focused reduction strategy was proposed, aligning resources to restore profitability and potential growth. The segment also covers functional challenges and provides solutions across industries to improve sales, retain staff, and capitalize on market conditions. These case studies highlight the versatility and effectiveness of strategic modeling in different sectors.

Mind Map

Video Q&A

  • What is the main topic of the video?

    The video discusses the application of strategic modeling to tackle business challenges across different industries.

  • Which industries are mentioned in the success stories?

    Industries mentioned include pharmaceuticals, banking, investment, aerospace, chemicals, heating equipment distribution, power distribution, IoT, nursing, and corporate law.

  • How did the pharmaceutical company respond to competition?

    They used dynamic pricing models and strategies to maintain sales against a new competitive product, reducing loss to less than 20%.

  • What challenge did the consumer bank face?

    They aimed to increase profits faster than their current plans allowed by expanding expatriate banking services.

  • Why was the investment company in trouble?

    They faced closure due to a downturn in the investment market and past strategic mistakes, leading to losses.

  • How did the aerospace company address high staff turnover?

    They developed a dynamic model to change hiring and reward strategies to reduce turnover of top technical specialists.

  • What issue was the heating equipment distributor facing?

    They faced a maturing market and increased competition, but managed to grow by capitalizing on competitors' failures.

  • How can the method be applied outside the business scope?

    The method is applicable in public services and nonprofit sectors, such as nursing and legal services, to address staffing shortages and productize services.

View more video summaries

Get instant access to free YouTube video summaries powered by AI!
Subtitles
en
Auto Scroll:
  • 00:00:00
    so let's look at some of the success
  • 00:00:02
    cases where we'll actually use this
  • 00:00:03
    approach in the real world this one will
  • 00:00:06
    actually look at this model in the
  • 00:00:08
    course itself this concerns travel
  • 00:00:10
    vaccines these are the vaccines people
  • 00:00:12
    get when they're going to exotic parts
  • 00:00:14
    of the world and might catch horrible
  • 00:00:16
    diseases this particular company it's a
  • 00:00:19
    division of GlaxoSmithKline dominated
  • 00:00:22
    this seasonal market with the only
  • 00:00:24
    licensed product so this is that the
  • 00:00:27
    chart here is looking at the seasonal
  • 00:00:29
    peak of sales that the company would
  • 00:00:31
    expect to see now the problem is that a
  • 00:00:34
    major rival product has just been
  • 00:00:36
    approved and the competitive sales force
  • 00:00:39
    will go around physicians and they will
  • 00:00:42
    try and take those customers away from
  • 00:00:44
    us in a very short period of time and
  • 00:00:46
    they will do so by charging a lower
  • 00:00:47
    price and the fear for my friend who has
  • 00:00:52
    this problem is that the company will
  • 00:00:55
    likely lose eighty percent of its
  • 00:00:57
    product revenue over the peak season of
  • 00:01:00
    sales and this one product accounts for
  • 00:01:03
    30% of his divisions cashflow so this is
  • 00:01:05
    a really serious strategic threat even
  • 00:01:08
    though it's only playing out over 15
  • 00:01:10
    weeks what do we do we sketched out the
  • 00:01:13
    kind of relationships on the whiteboard
  • 00:01:14
    in an afternoon in my office to figure
  • 00:01:16
    out what a counter plan might look like
  • 00:01:18
    we built a model of just right dynamic
  • 00:01:21
    pricing to to give John a chance of
  • 00:01:23
    actually defeating this attack and the
  • 00:01:25
    model also showed the likely effect of
  • 00:01:28
    tactics that he could use to undermine
  • 00:01:31
    the rivals product credibility and
  • 00:01:33
    damage the morale of their sales force
  • 00:01:34
    now he was all going to lose something
  • 00:01:36
    in this situation it wasn't gonna be a
  • 00:01:39
    case of being able to keep all of his
  • 00:01:41
    sales but he managed to keep that loss
  • 00:01:44
    to less than 20% of the sales that he
  • 00:01:46
    would otherwise have have achieved and
  • 00:01:48
    this was really fast and we did this in
  • 00:01:50
    an afternoon and John took the model
  • 00:01:52
    away and continue to use it through the
  • 00:01:55
    15 weeks of the competitors product
  • 00:01:56
    launch here's another challenge this is
  • 00:01:59
    a consumer bank starting a popular new
  • 00:02:02
    business this is actually providing
  • 00:02:04
    expatriate banking services for people
  • 00:02:06
    who've gone and lived in sunnier
  • 00:02:09
    countries
  • 00:02:09
    that they come from but still want to
  • 00:02:11
    use the bank from their home country and
  • 00:02:15
    it's been doing ok for the last two
  • 00:02:17
    years it has future plans to grow the
  • 00:02:20
    profits and we have this looks really
  • 00:02:22
    pretty good here and it's going to more
  • 00:02:24
    than double profits over the next two to
  • 00:02:27
    three years but when we put the plan
  • 00:02:30
    together and the model together with
  • 00:02:31
    this and figure out what might be
  • 00:02:33
    achievable we figured that was much more
  • 00:02:35
    potential and we could achieve it much
  • 00:02:38
    faster than the bank's current plans
  • 00:02:40
    would allow the model allowed the
  • 00:02:43
    general manager who's project this was
  • 00:02:45
    to justify large increases in staffing
  • 00:02:48
    and growth of the service and roll it
  • 00:02:50
    out faster and a three fold of
  • 00:02:54
    multiplication in the rise in profits
  • 00:02:56
    that could be achieved over over three
  • 00:02:59
    years and I helped the general manager
  • 00:03:03
    with this model and they worked on it
  • 00:03:05
    part-time a few hours here and there
  • 00:03:07
    over about a month that's the kind of
  • 00:03:09
    effort that's required to to put this
  • 00:03:11
    together here's a very different kind of
  • 00:03:14
    challenge this is an investment company
  • 00:03:16
    looking after people's pension funds and
  • 00:03:18
    they are in serious trouble they're
  • 00:03:20
    facing closure in fact it's following a
  • 00:03:23
    downturn in the investment market and
  • 00:03:25
    following some some mistakes that they
  • 00:03:27
    made during their strategy prior to the
  • 00:03:30
    to the downturn in the market now their
  • 00:03:32
    response to this typical of companies
  • 00:03:35
    facing this kind of thing they announced
  • 00:03:37
    across-the-board cuts you know
  • 00:03:39
    everybody's budgets cut by 20% yeah
  • 00:03:41
    that's never gonna be that's never going
  • 00:03:44
    to be the right answer for turning
  • 00:03:46
    around this kind of situation and the
  • 00:03:49
    other reaction was to cancel the
  • 00:03:51
    multi-million pound investment in IT
  • 00:03:53
    systems essential for the future of the
  • 00:03:56
    business but that was going to be canned
  • 00:03:57
    now in spite of those actions it was
  • 00:04:00
    unlikely that they would still continue
  • 00:04:02
    with two years or more of losses from
  • 00:04:04
    this business what we did here was we
  • 00:04:06
    mapped and model the business with the
  • 00:04:09
    senior team we identified serious
  • 00:04:13
    over-expansion in the business they
  • 00:04:15
    launched too many products they had gone
  • 00:04:17
    to too many distributors they were
  • 00:04:19
    selling to people who weren't investing
  • 00:04:21
    much
  • 00:04:22
    that far too many people involved
  • 00:04:24
    supporting all of these overextended
  • 00:04:27
    resources in the business so they focus
  • 00:04:30
    cutback of something like 40% of the
  • 00:04:34
    size of the business allowed them to
  • 00:04:35
    return to profit really much faster but
  • 00:04:39
    crucially put the system back into a
  • 00:04:42
    state where it would be capable of
  • 00:04:44
    starting to grow again rather Signum
  • 00:04:48
    here's another case this is a in the
  • 00:04:51
    bulk chemicals industry facing a serious
  • 00:04:54
    sales decline because of a rather
  • 00:04:55
    troublesome competitor though they were
  • 00:04:57
    dealing with but there was a way that
  • 00:05:00
    we're able to turn that sales decline
  • 00:05:02
    around and get it to grow again this is
  • 00:05:05
    a functional specific challenge this is
  • 00:05:07
    an aerospace business who's losing some
  • 00:05:09
    of their their top technical specialists
  • 00:05:12
    to the finance industry and you know
  • 00:05:16
    there's this kind of level of turnover
  • 00:05:18
    is very damaging to a company of this
  • 00:05:20
    kind they really need the experience
  • 00:05:22
    that comes from these skilled people
  • 00:05:25
    staying with them for many years and a
  • 00:05:28
    dynamic model showed how it was possible
  • 00:05:30
    to change the way in which people were
  • 00:05:32
    hired and developed and recruited and
  • 00:05:35
    rewarded to radically reduce the
  • 00:05:38
    turnover of those staff as a few more
  • 00:05:41
    examples this heating equipment
  • 00:05:43
    distributor was facing a maturing market
  • 00:05:46
    but rather than can go down with
  • 00:05:48
    everybody else as the market saturates
  • 00:05:50
    and sales slowdown he was able to help
  • 00:05:53
    his competitors fail rather more quickly
  • 00:05:56
    and pick up business from their failures
  • 00:05:58
    in the power distribution industry
  • 00:06:01
    there's been a long-term decline in
  • 00:06:03
    equipment reliability as companies have
  • 00:06:05
    desperately tried to keep generating
  • 00:06:07
    cash flow and this case allowed us to
  • 00:06:10
    reverse that long-term fall in
  • 00:06:12
    reliability while still maintaining
  • 00:06:14
    acceptable cash flow rates from the
  • 00:06:16
    business we will actually look at this
  • 00:06:18
    case it's a slightly different example
  • 00:06:21
    of a new tech startup than the Allen
  • 00:06:24
    Analyst problem we looked at earlier but
  • 00:06:26
    this one too is all about accelerating
  • 00:06:27
    market penetration for a new technology
  • 00:06:30
    product in the Internet of Things
  • 00:06:33
    industry the
  • 00:06:34
    IOT sector as it's known the method
  • 00:06:37
    works perfectly well in public services
  • 00:06:39
    and nonprofit cases as well this example
  • 00:06:42
    looked at anticipated large-scale staff
  • 00:06:45
    shortages in nursing and this corporate
  • 00:06:48
    law firm was really trying to kind of
  • 00:06:50
    productize its services and and hire
  • 00:06:54
    different kinds of lawyers to support
  • 00:06:57
    the wrong lack of these new services in
  • 00:06:59
    general though we are always looking at
  • 00:07:02
    three common questions the first is why
  • 00:07:05
    have we got today
  • 00:07:06
    why has performance being what it has
  • 00:07:09
    been and that's important for two
  • 00:07:10
    reasons first it tells us how the system
  • 00:07:13
    actually works we need to get the model
  • 00:07:17
    to replicate reality if we don't do that
  • 00:07:20
    then our model is not reliably
  • 00:07:23
    reflecting what's happening in the real
  • 00:07:25
    world the second reason we need history
  • 00:07:27
    is that things that have already
  • 00:07:28
    happened in the past are already
  • 00:07:30
    affecting what will happen in the future
  • 00:07:32
    we need to track the trajectory of those
  • 00:07:35
    past decisions and past events that will
  • 00:07:38
    be affecting our future we then go on to
  • 00:07:41
    the second question which is where
  • 00:07:42
    performance might be going if we carry
  • 00:07:44
    on as we are with business as usual and
  • 00:07:46
    of course what you really want to figure
  • 00:07:48
    out is how to improve that future and
  • 00:07:50
    get a better result out of it so those
  • 00:07:52
    three cap questions are generic in many
  • 00:07:56
    many cases the the only exceptions are
  • 00:07:59
    where we're looking at new ventures or
  • 00:08:01
    new initiatives or new issues where we
  • 00:08:05
    don't actually have any history so we're
  • 00:08:06
    kind of starting at the the now point on
  • 00:08:08
    this chart but we still want to ask so
  • 00:08:10
    the the second two questions where my
  • 00:08:13
    performance go with the plans we
  • 00:08:15
    currently have and how might we get
  • 00:08:18
    better results in the future
Tags
  • Strategic Modeling
  • Business Challenges
  • Dynamic Pricing
  • Profit Growth
  • Staff Turnover
  • Market Competition
  • New Ventures
  • Public Services
  • IoT