Enterprise Thinking CD

Business Case Alpina SA ranked #4 in sales as Colombia’s largest Food and Beverage Company. Sales 2009 U$550 millions dollars Diversified portfolio of dairy products in 5 main categories: Milk and derivatives, cheeses, beverages, desserts and baby food. Sales in: Colombia, Venezuela, Ecuador, US, Central America. Frutto: Juice Brand Leader in the Nectar category – 2007 Reached the leadership of the category – Sales U$20 millions dollars / year

Evolution SOM sales NECTARS SEGMENT Value $$$ (‘000000) The market changed dramatically, 2 companies launched new products in the juice category:

The category and consumer behavior changed. Competitors have a better distribution and marketing budget. Sales goals were to hight for the new scenario. We lost share of market. The stores that usually sell 2 brands of nectar juices have now 4! We were in the middle of a war between Coke and Pepsi. Budget reduced in 10%. My projects have been stoped. Results and situation…

What I learned from this experience, with the ET model. Tools: Quadality in Forecasting Redefining Project Evaluating Chart Concepts Win and lose by a nose. GPP model Economic thinking Enterprise Thinking Model

Quadality Forecasting Vision Alpina The Future of the Beverages Group is to maintain the leadership in the category differentiating their products. The organization will be motivated to develop a category with differentiation, stable volumes and high profits. Customers. Customers in the juice category are looking for healthy and differentiate products. They are going to choose the best product, depending on the brand, the quality and the prices. Vendors. The sales force will be happy to sell Beverages and juices, if they have unique products, that satisfied the needs and trends of the costumers. Global future. Globally there is a trend in the beverage category, to search more natural and healthy products. Biggest beverage companies will try to sell any brand or product that compete with them.

Forecasting Markers: Some trends, cycles and patterns that may impact the future: Health Natural Quality Branding Distribution Communications Disponibility  Climate  Water  Petroleum  Consumption habits  Employment  Marketing  Sustainability Lesson: Take management decisions with a more long term vision. Differentiate your product with natural and healthy benefits to be a sustainable and profitable business for Alpina.

Redefining: A tool to rapidly strategize 8 processes 1.Statement of Challenge: Increase 7% Frutto sales in 2009, reaching 40% of SOM in the Colombian market. 2.Reframe the statement: We should develop Frutto, as the most natural juice of the market, to maintain 40% of SOM in the Nectar category. Is the CS one issue?Yes IS THE CS in present tense?Yes Is the CS a problem?Yes Are the CS fact verifiable?Yes Are the Cs assumptions valid picture?Yes Is the CS essential to you overall goal?Yes

Redefining: A tool to rapidly strategize 3. Redefine challenge WWIT: What would it take to develop Frutto as the healthiest snack in the Colombian Market, leading the nectar category and entering in other categories. 4.Scan Solutions: Specialized as a unique Nectar: quantity of fruit /sweetened with fructose/ benefits. Develop Fruit bars Develop a compote for adults as a innovative and healthy snack 5.Redefined solutions: Innovation/ New Product development/ Enter in new categories to positioning the healthiest of the brand 6. Test solutions: Test new products and concepts. 7.Implementation: Execution / NPDS funnel. 8.Post review: Results in SOM and sales.

Redefining: Lessons As we didn’t make a redefined process in the right moment: – We lost the focus of our business. – We waste time looking for answers for bad results. – Sales people were discouraged / Impossible to reach sales and goals. – The company never understood the new situation as a new challenge and change the goals. – Waste of time and resources. – We did not use this new competitive situation to redefine the business.

Managing Projects: Project Evaluating Chart List Projetcs Time Hours / days Impact on firm ROI Money invested Priority Frutto600 /12085U$ U$ A Vitalis160 /8060U$ U$ B Carioca 240 / 6030U$ U$ C Soya P80 / 12025U$ U$ E Baby Food600 / 24020U$ U$ F Juice Eco360 / 18075U$ U$ D

Project Evaluating Chart: Lessons I was surcharged of projects, threaten by big competitors and pressed to provide $ results. I should have concentrate in 2 projects. I should have redefine the priorities to improve the projects assigned with greatest positive impacted. Maximize organizational resources. The right projects and the correct number of projects.

Win and lose by a nose Solve the permanent lost of clients in an specific region where competitors were very strong. We had a meeting with the sales team of that region to discuss the challenge. We didn't’ have enough resources to invest. We involved all the vendors in the problem to provide solutions. Every vendor accepted the challenge to create 10 new clients per month. 80 vendors in this region. We increase in 2 months the base of clients of Frutto in 1600 new clients. We recover the SOM of the brand in that region.

GGP MODEL Systems and Structure 80% 20% The people The ability to compete depends on the systems and structures and on the people. Do we have the right structure to compete against Coke and Pepsi in the Beverage Business? No, for the distribution, portfolio and their core business. However the leaders created a more profitable business to compete: reducing costs and increasing differentiation of the product.

Economics of thinking: Increase rewards and reduce risks. As an idea moves forward the cost increases exponentially. Costs Time New Project Juice ECo Research/ Market opportunities New Ingredients Marketing Plan Dvp Samples Agencies New competitive situation- Project stopped “The better a leader is at taking the time to think through an initiative up front, the less expense he or she incurs for the organization in the long run.” D Goldsmith. Business case