Apprenticeship Levy, Case studies, Management

Increasing profitability at Planet Organic – impacts of work-based projects

25 February 2020 by Isla Lightfoot

Tanvir Enam was Food Operations Manager at Planet Organic when he embarked on the Corndel Level 5 Diploma in Leadership and Management. Part of this role was to ensure the profitability of the business through competitive pricing strategies. The Diploma teaches tools and frameworks to perform comprehensives competitive reviews, so Tanvir decided to apply these new-found skills to reviewing the coffee marketplace.

As a consumer he had noticed that competitor brands offered limited milk choices that were not organic and they charged considerably more than Planet Organic. It had been several years since Planet Organic had implemented a price increase and there was reticence to do so because of the risk of customer attrition.

Initially, using frameworks taught on the Diploma, Tanvir ran a competitor cost/profitability analysis, a price sensitivity analysis and a business impact report. He found there was scope to retain the quality and variety of the product by increasing prices, which would significantly increase profits whilst retaining its competitive costing model. He presented his proposal to revise the menus and change the pricing of all coffee products across the brand to the CEO of Planet Organic.

The CEO felt the pricing proposed would risk customer attrition, so Tanvir revised his proposal and put a customer attrition contingency and communications plan in place. The proposal was accepted and implemented.

Profitability has increased across all stores. Customers were clearly communicated to and understood that to maintain the quality and diversity of the product, prices needed to rise. They fed back that they still consider the product to be great value and superior to competitor brands.  To date there has been no customer attrition, so the contingency plan hasn’t been required.

The framework Tanvir put in place to implement this project has been adopted by Planet Organic, to run pricing analysis on a regular basis. As part of his proposal, Tanvir created a costing platform using Microsoft Excel. This remains in continued use by Planet Organic Directors.

Tanvir explains how the Corndel Diploma helped him to deliver this project: ‘The confidence that I gained from the Diploma enabled me to stand in front of our CEO and present a highly sensitive proposal. I knew my proposal was well researched and that I had the backing of the frameworks and tools I now had at my disposal, to scrutinize the data. I am a huge advocate of this Diploma, encouraging my colleagues within Planet Organic to enrol. You learn so many relevant things that you can apply daily, to the benefit of your organisation.’

More information about the Corndel Diplomas in Leadership and Management.

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