11 steps to unleashing a business spectacular — during a price war

Back in January 1997, I got put in charge of the Microsoft business at one of it’s then five trade distributors. It was doing circa £1m/month in sales at 1% gross margin, with 60% of the business coming from one large retailer. Four months later, the business has executing at £5m/month at 2% margin, with that large retailer staying at their previous level of trade.

The main turnaround was based on lessons I had while heading the Software Products business at Digital, where all my folks were trained on pricing by John Winkler; that included specific ways to handle yourself if you find yourself in a price war. It worked spectacularly well.

The sequence of events were as follows:

1. Metrologie had the previous year bought Olivetti Software Distribution, and had moved its staff and logistics into the company’s High Wycombe base. I got asked to take over the Management of the Microsoft Business after the previous manager had left the company, and the business was bobbing along at £1m/month at 1% margins. Largest customer at the time was Dixons Stores Group, who were tracking at £600K sales per month at that stage.
2. I was given the one purchasing person to build into a Product Manager, and one buyer. There was an existing licensing team in place.
3. The bit I wasn’t appraised of was that the Directors had been told that the company was to be subject to a Productivity Improvement Plan, at the same time the…