Jiffy's company culture clearly represents the cause of the biggest issues of this case.
Although initially supported by market potential, steady increase of turnover, strong economic growth and development of new successful products, the Baldwin's private family-owned business philosophy had created several issues: Complete absence of team emphasis and lack of participation of the upper and middle management to the company's policy-making process. Need for major investments in company's equipment to minimize production costs and meet environmental standards. Very wide product range.
Little knowledge of market developments.
Lack of customer orientation.
By relying too much on its reputation of UK number one protective packaging manufacturer, Jiffy exposed itself to a very aggressive and organized competition. Companies like Sealed Air and Sunsetsu can be mentioned as good examples. Mainly focused on the production of plastic based products, Jiffy's competitors used market knowledge, higher technology standards and specific applications for their product lines to approach both end-users and distributors. Lower prices, customer service and customized solutions, were their most visible competitive advantages.
The identification of the customers is clearly an issue in this case. Weather the distributors should be considered as customers or collaborators is the key question. The current situation reveals that although threatened by poor service and lack of communication, the relationship between Jiffy and its distributors is still pretty strong thanks to the brand awareness factor. Context:
The market reached saturation point and the economy is trying to overcome the recent recession. Further, Jiffy is still under the pressure of the new environmental standards that are yet to be met. Alternatives
A. Consider the distributors as end users
Under this alternative Jiffy would be treating distributors as its only customer base. In order to pursue this model, service and loyalty issues should be immediately resolved. The management should take into serious consideration the real needs of the distributors, their feedback and their opinions. Communication and commercial customer awareness should be dramatically improved. New distribution policies should standardize the relationship between Jiffy and its customers, while solving service issues such as deliveries reliability and delivery lead times. At the same time a consistent pricing policy should guarantee clarity in business relationships. At the time when the survey was conducted almost every distributor admitted to stock Jiffy products because of "the actual name" ("It's like Hoover"; "It's synonymous with packaging"). Therefore a clear advantage of this alternative would be the opportunity of turning most of the existing distributors into several new "Ambassadors" once the service issues would be solved. This could mean higher loyalty of distributors to the Jiffy lines and therefore higher volumes, margins and turnover. On the flip side the risks of this model would be several. Treating the distributors as final customers would decrease Jiffy's control on the market place. Following their needs and inputs would mean new investments in production equipment to both comply with environmental standards and lower production cost. The R&D department would have to either rely on data gathered from distributors or engage in very expensive market researches. Last but not least Jiffy would have to refrain from dealing directly with end users, thus face a considerable opportunity cost. Deals like the ones with the General Post Office and The Ministry of Defense could be seen as acts of disloyalty from the distributors' perspective. B. The Sealed Air Model (Distributors + Direct Sales Strategy) Under this next alternative Jiffy would be still considering distributors as its...