HRCP Case Study:
Finding fertile ground for a problem portfolio

Situation

As its flagship brand declined, a major over-the-counter drug company was losing market share in a highly competitive, yet stagnant, market. Past efforts to boost growth through new products and line extensions underperformed and were highly cannibalistic. The business lacked clear direction—and management lacked confidence in its plans.

Challenge

Henry Rak Consulting Partners was engaged to recommend a growth strategy that encompassed both new and existing brands, including the development of a portfolio strategy, spending strategy and retail management strategy.

HRCP Advantage

Henry Rak Consulting Partners precisely defined a very broad view of the Pain Management marketplace encompassing more than $40B in products and services. We developed an in-depth understanding of the dynamics of the marketplace and opened up a host of new product opportunities. We recommended:

• Re-positioning the client's portfolio with the objective of pulling apart the various brands and sub-brands to ensure that they completely cover the competitive frame/sources of volume and that they source more volume from the competition versus each other.
• Revamping the development program to take advantage of nearer in but more incremental opportunities by focusing on primary benefit improvements. We also devised a new approach for identifying higher odds of success for innovation in adjacent markets.
• A new business opportunity that identified a consumer usage segment that was largely overlooked and underdeveloped, and was not cannibalistic to existing business.
• Optimizing advertising spending levels and changing the mix between brands while driving profitability. This clearly showed big upside potential for two sub-brands that were under-supported.
• New trade promotion strategies that defined optimal trade activity and spending for each brand nationwide.
• New assortment and shelving strategies for the client's portfolio and the broader category.

Results

The client has enjoyed significant revenue and profit growth from a revitalized category and a highly improved competitive position/share.

• Our growth strategy helped drive profitable revenue up by $40MM, an increase of more than 10% over a multi-year period, almost double the rate of category growth. This strategy included successfully repositioning the flagship brand, resulting in positive growth following a long period of decline.
• Spurred the launch of a new product fulfilling a primary consumer need within the new competitive frame of the flagship brand. The new product delivered $50MM in incremental revenue to the portfolio in its launch year.
• Identified six new product opportunity areas each worth $50MM or more in revenue, highly incremental to the portfolio and highly feasible.
• Identified an opportunity to grow revenue by more than $30MM through optimal advertising spending for key brands that required $20MM higher spend.
• Gave the client ammunition to solidify category leadership and to deliver 1.5% – 2% of portfolio growth through shelving strategy and optimal assortment recommendations for platinum customers.
• Improved trade ROI and ongoing profit improvement of more than $5.5MM by defining optimal trade promotion strategies and tactics by class of trade.