Chapter 12: SWOT versus SWAT

I got back to the London offices the following day. A comfortable flight had made it easier but I was still suffering from jet lag. Still I doubted that I was feeling as rough as the packages that had been in the hold.

Freddie gave me a call and suggested a meeting. He wanted an update on progress. I was happy that I had some ideas after my various trips. We agreed to meet in the board room the following afternoon.

Clegg arrived on time, looking in as good humour as he usually was. "Afternoon Larry. Good trip? Well I guess we'll hear about that. Not a bad bunch out there. Hope they looked after you."

"It was fine," I said. "everyone was very helpful. I got some good ideas, I think."

"OK," said Clegg. "That's what you're here for. How do you want to do this?"

"I'd like to talk through my thoughts using a few tools that I find helpful, basically summarising what I've learned over the last few weeks."

"You seemed to have learned how to enjoy yourself, young man, if what I hear of your trip is right. That's all to the good. Don't look so worried, I'm quite happy for you to take advantage of any opportunity — its part of the package as far as I'm concerned."

I gave an embarrassed cough. "Well, thanks. Yes, there was some fun but I thought I'd try to focus on the things I've learned about the business. Then we can agree what we want to do about it."

"Fine by me. You lead off."

"One of the things I have done is a SWOT analysis," I said turning to the flip chart that stood beside the board table.

"Special Weapons And Tactics?" asked Clegg looking puzzled.

"Strengths, Weaknesses, Opportunities and Threats," I explained as I drew the board into four segments, S, W, O & T.

"Ah," Clegg responded. "I see."

"I'll write up the things I think I've got from the meetings and visits of the past few weeks. If you want to pitch in with any thoughts as we go along, feel free to do so."

"Ha! Going to have to work for my living am I? OK"

"I'll start with the strengths. The research team is a definite plus." I wrote 'RESEARCH TEAM' up on the board. "All the clients that I spoke to reckon that you've got one of the best research teams in the business. Plus your snatch teams think the research is pretty good too. They don't get many surprises when they are on a job."

"So how does that help us?"

"Well, I don't want to jump to any conclusions, let's look at the other factors. Hacking — that's something your team is pretty good at too." I added that to the list. "Plenty of others have been making use of the Internet but your team seem to have got further on than most. In fact the whole IT side seems pretty strong to me."

"I'd have thought the fact that we can deliver all over the world was a strength -, don't you?" Clegg joined in.

"Well, certainly it's something the organisation does and it's perfectly good at. Virtually all of your competitors do it as well though, so I don't think it can be considered a particular strength. I didn't hear anyone saying you could do anything that others can't. I think you can only really count the things that are different or better than competitors — otherwise you just end up being a 'me too' operation."

"Hmm, yes. See what you mean. Never been my goal to be like the rest of the herd."

"But one other feature that was mentioned was your knowledge of the UK as a source of product. All of your clients said that was a big feature and important to them as well. It seems there some markets where UK product is a plus and you're definitely seen as the expert."

"OK, that's encouraging anyway. Any others?" I shook my head. Freddie looked concerned but pressed on. "How about weaknesses?"

"Well, something your clients talk about is a lack of choice — they feel once you get stuck into a commission there's not much chance to influence what's going on."

"Well, that's inevitable, isn't it?. You can't go changing operations in mid-stream."

"Maybe not but your competitors give their clients the feeling that they have more flexibility."

"Uh, huhh, OK," said Clegg warily. "Mm, well we ought to be taking account of the competition."

"Oh, yes. I think we can assume that if we're doing things right they will respond in some way. For now though I'm mainly interested in doing things our customers want that the competition aren't doing or that the competition is doing better than us. That's why I thought about the auctions."

"Hang on," said Clegg. "We've got one of the best Auction Centres that I know. You can't say that's a weakness."

"Well, I agree the Centre itself is impressive. The problem is that there aren't enough buyers and because there aren't enough buyers you're not getting as good a price as you could. If you could get a bigger audience you could find prices going up. Or if you could make things so that you really exploit the specialised talents of the stock. Take the chap who runs the business jet I flew back on. He got two fully trained cabin crew at one of our auctions for about what he'd have expected to pay for any two pieces in their mid-twenties. He got a real bargain. I think you end up under valuing the stock."

"I see what you mean. Certainly prices have seem depressed but I'd put that down to a more general market trend."

"There's no evidence to support that. In fact from my discussions some of your customers are paying higher prices from your competitors, not lower."

"Ha! Not my idea of the best way to do business."

"I think it stems from a number of problems. Customers just don't think you're interested in what they want, just in what you have to sell, so they come to see what you have to offer as an opportunity for a bargain, nothing more." I wrote 'Don't handle MY problems' up under weaknesses."

"All right."

"And the other thing is the stock that you carry." I added 'STOCK' that to the list.

"Can't sell what you haven't got," said Freddie, furrowing his brow.

"A common view but not always true. Sometimes you can sell what you know you can get. I think what I mean is that there doesn't seem to be any control over what stock you bring in or when. It seems like the snatch teams just pour stock in at one end and the Sales Centre has to find ways to shift it."

"Hmm, I'm not sure that's completely fair but there may be something in what you say. Certainly we had to clear a lot last year."

"OK. Well, the strengths and weaknesses all tend to be about what your business does. The opportunities and threats are all about external factors. I'm not sure I've really got to grips with this yet but here's a couple of thoughts. There's a growing number of women buyers in the market — that's got to be an opportunity and I'm not sure that anyone's really catering specifically for them. Then there's the younger buyers too. Again there are signs that the average age of buyers is coming down — a few people have said that. Again, I don't see anyone shaping up to that."

"Interesting, interesting. Well, if we're looking for threats, there's always the forces of law and order."

"Well, yes, but again that's pretty much the same for everyone isn't it? I guess if you have more problems because you're based here in the UK we could consider it a weakness but otherwise it's just what this market is all about, isn't it?

OK, yes, I see what you mean. It's probably the same for all of us. It's no worse here than in the States or most of the other EU countries. Maybe a bit better at the moment with most of them off worrying about counter-terrorism rather than us."

I ran through a few more thoughts but I could see Clegg's attention was wandering. Time to cut to the chase, I thought.

"So here's what I think we should do," I said. Clegg sat up. "Have you heard of the '4P's'?"

He shook his head.

"It's a way we talk about the mix of factors you need in a marketing approach: product, price, place and promotion."

"OK, I get it," said Clegg.

"Well here are my thoughts." I turned over a clean sheet on the flip pad and wrote:

Product — UK females that meet specific customer requirements.

Price — premium priced for a premium service

Place — Eastern Europe, Middle East, Far East

Promotion — account managed approach supported by video / web

+ explore opportunities in new markets (women / younger buyers)

Clegg looked at it. "Go on," he said, carefully.

"My view is that the future of Clegg Enterprises lies with higher value niche opportunities rather than the mass markets. I recognise some of these, especially the US, seem attractive and appear to be the areas of largest growth today but all my research indicates that these buyers will move to becoming more discriminating over time. The skills of the business in research and specialist acquisition of stock will match the emerging demands of the market for particular items. I'd recommend that Clegg Enterprises defocuses on the current auction approach and instead looks towards an approach in which buyers are encouraged to specify their requirements directly and indeed get fully engaged in the selection and acquisition process. Over time we would aim to migrate more of the current clientele to buying in the way that the most profitable customers do."

"OK, I can see the sense of that. I guess the big questions are how do we do it and how do we fund it?"

"Let's talk about how we should do it first. I've got some ideas that should prove simple to put into practice for starters. Firstly I'd like to start an account management approach with some of the current clients. Assigning a particular contact to them to be responsible for knowing their requirements and working with them on how we can meet them. I mean, for example, when I was out on the island, it was clear that Steve Glennis has a number of projects in mind that we could help him with, he hadn't thought about talking to us. If someone had been talking to him, understanding his projects, we'd have been able to make suggestions and with the research skills we'd have been able to find just what he wanted."

"So instead of waiting for him to turn up at an auction," Clegg began.

"Which he may or may not do," I said. "And in fact he hadn't for over a year until last month."

" ... instead of that, we work with him on specific acquisition projects."

"We follow that up with an approach that lets clients review and comment on our plans - we could use some sort of secure web technology; share the surveillance stuff with clients; get them to comment on the girls before we pick them up. The idea should be that we move to more acquisitions for specific projects and fewer speculative collections. If we make things specific enough for people they'll pay a lot more, we'll be able to command a premium price because we'll be getting the customer just exactly what they want."

"Well, it's funny you should say that I mean that's how I started out. I mean apart from my own little hobby activities, the first professional job I did was for a guy who was infatuated with a girl. He tried to date her and she laughed him off. I told him I could get him what he wanted and I did. He came up with a big wad of cash, very grateful he was. That was the seed funding for Clegg Enterprises." He went on, "But your ideas are going to need cash too. So how do you propose funding it?"

"You're going to think this a bit radical," I said.

"I like radical if it solves the problem," Clegg responded.

"OK," I took a deep breath. "Close the Sales Centre."

Clegg spluttered, "But that cost us a fortune to set up! I thought you marketing guys were all about better selling."

"Nah — marketing's about getting people to buy. I bet it did cost you a fortune to set up. And it's costing you a fortune to run. It's expensive and you don't actually need it. It isn't much used apart from the auction suite. It's much better to go to the customers. If you need them to come to you, use the London Club.

"But what about the warehousing facilities and re-sales and the auctions?"

"There's probably enough space at the Prep Centre. If we're doing more collection against specific requirements then we should need less warehousing anyway — not point in keeping stock if we don't need to. I think you can use the Internet more for auctions of any commodity stuff, we'll still get 'opportunities' presenting themselves and I don't propose we should turn them down. But when you do use an auction you need to get to a wider customer base — it's all got a bit cosy at present and you don't get the prices you should because there just aren't enough bidders involved."

Clegg looked thoughtful and then seemed to come to a conclusion. "All right let's go with this," he said. "You try your account management approach with one or two clients and see if that works. Go make a video about what we are up to — I like that idea - but don't spend too much money on it. And you can get Technical to do a feasibility study on the Internet service. How does that sound?"

"Fine, that'll let us make a start. And the Sales Centre?"

"I'll think about it. We'll talk about it again after you've done this first bit. I'll set you up with a couple of clients to go talk about their requirements."

"OK," I said. "Fine by me. Just make sure that Research are teed up to play their part."

"Don't worry, Larry, you'll get all the help you need. Oh and you'd better go have a chat with Harry, I can imagine that field operations are going to be working harder."

Harry proved difficult to track down but eventually I got him to answer his mobile. "Can we chat," I said.

"Sure," said Harry but I'm a bit up to my ears in it right now. I've got an operation in hand but if you want to come up here I'd be OK with that."

"OK," I said. "Where's 'here' then?" He gave me an address in a small town about 20 miles away from the Prep Centre. I took the train from Euston. It wasn't much later arriving than I'd expected and a short walk from the station found me outside a door sandwiched between a greengrocers and a pet shop. There was only one bell. I pushed it.

Harry's voice crackled through a small brass grill, "Yup?"

"It's Larry," I said.

"Come on up," he replied, the lock buzzed and I pushed the door open. A narrow staircase led upwards. At the top of the stairs was a glass panelled door that opened into a scruffy reception area. Behind the empty reception desk was a door into an inner office. Harry put his head around the door and waved me in. "Larry," he said, "excellent. There's someone I want you to meet."