Posts Tagged ‘strategy consulting’

Strategic Challenges. Today: Caran d’Ache

Friday, May 2nd, 2014

If you know Caran d’Ache, the producer of writing instruments (truly phenomenal products), then you’ll know what I’m getting at. If you don’t know Caran d’Ache, then, you might want to have a look at  the company’s web site or – better yet – at this remarkable YouTube video about the “Caelograph”, a writing instrument of the highest order from the Caran d’Ache product line, to get a picture of the strategic balancing-act the company performs.

From colored pencils worth just a few cents to Caelographs costing more than $135,000, from grade school to the carriage trade – that is a broad product-, sales-, and cultural spectrum. Here it’s critical to cleanly separate market segments and to ensure that the brand isn’t stretched thin by centrifugal forces at both ends of the portfolio. This kind of dilution poses considerable risk, because it usually won’t be noticed right away. By the time it’s detected, the brand has become so misshapen that reconstructing it will take a considerable amount of time.

Many of our clients must ask themselves the same questions that confront Caran d’Ache: What is the appropriate product mix How do we grow sensibly, without distorting the contours of the business or sacrificing profitability? Do we have the right market-access? Do we have the appropriate team on board? Do we even have the right customers, and do we know what their needs really are?

Please note: At the moment, Caran d’Ache is still doing its thing very well, but the family-owned business, with its extreme spread across segments, offers a classic example of the kinds of strategic challenges to be overcome. In this respect, by the way, the Caran d’Ache example fits splendidly into my lecture “Strategy Consulting” at the SRH College for Logistics and the Economy.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.