ProductNet - Moving the World For You

Part I

An interview with Ari Manor, CEO of ZOOZ
On the unique ProductNet project 
Published in Hebrew in Bina Iskit magazine, October 2001

"Israel can become a global center in the DIY (Do It Yourself) industry", say Ari Manor, CEO of ZOOZ Marketing Consulting & Management (www.zooz.co.il), following the launch of the ProductNet Program. It is an unparalleled project initiated by ZOOZ and the Industry & Labor Association as a creative solution for overcoming the recession and economic crisis that small and medium-sized Israeli businesses are facing. The ProductNet project enables manufacturers that previously acted as subcontractors, to develop their own product line and market it to giant chains in Europe and the U.S.A.

"The vision of the program is to make use of the knowledge accumulated in several Israeli companies that succeeded in the international retail market such as Keter, ZAG, Kapro and others. In addition, we can use Israel's geographic location and its international trade agreements, giving it a material advantage in European and U.S. markets", say Manor, adding that "although it is an exciting program, I wanted subcontractors to look into other more conventional solutions before committing to it".

What other solutions are there during a recession?
One should examine a range of options. In the market's current state there is no room for maintaining a passive stance and business decisions must be made. Under certain circumstances, the only appropriate alternative is unfortunately to close down the business! It is not very pleasant after the investments have already been made and you have created something of your own, and it involves matters of honor and ego. Still, one should keep in mind that a business should work for you and make you money, and not the other way around. The decision to close down is surely a tough one, and it often involves considerations of family members accustomed to a certain standard of living, not to mention the issue of suddenly becoming a hired employee. Nevertheless, refraining from action is definitely not recommended during times of crisis. 

What are the signs that a business change is due?
The matter is an ongoing process, so everyone should conduct a self-examination, asking incisive questions and making bold decisions. There are several indicators for the need for change. For example, if a lot of similar businesses are closing down, if there are less sources of income for the firm, or if your view of things is pessimistic rather than optimistic. That would be a time to make a decision one way or the other. The worst case scenario is to drag the business on, ending up with greater financial debts.

What can be done to immediately improve things?
One can begin by cutting expenses. There are many ways to do so, including hiring temporary employees, listening to suppliers and their needs, and checking how much we are paying them. The issue of bank credit, for example, should not be postponed until the last minute, but rather work together with your bank, stating things in advance. Small, family-owned companies have a high level of partnership and a unique atmosphere, so I recommend having an open and straightforward conversation, laying matters out in the open and leading it to positive action.

How about increasing one's revenues?
The fundamental, most relevant rule for increasing revenues is to take action with your existing clients. Sometimes the solutions aren't that complicated. One should move towards existing client needs, while trying to get more out of them. Initiate a new service, or see what can be done to remind them of your existence, thinking in inventive & creative ways. One way or the other, the energy involved in acquiring new clients is 5 times more than investing in existing ones, so you should concentrate on the latter for immediate improvement.

What if all that fails to put us back on track?
The common tendency when a life or business change is required is to drift away to adventures. Therefore, you should take hold of yourself and start by examining what may be done with the existing business. If you've already cut expenses, turned to existing suppliers and clients, sat with your family, talked to the bank and reached a conclusion that you want to do something different and new, another business, with all the resulting consequences and commitments, may not necessarily be the best direction. One possibility is the ProductNet program we offer. The program's target audience is the numerous subcontractors that are fed up, especially during a recession. Some are not paid on time, they are manufacturing for other companies, thinking that they would like to take the next step towards making and selling the finished product. 

Is this a big change for the subcontractor?
ProductNet enables a business to change from being a subcontractor to a global manufacturer. It is a genuine and fundamental change because it involves more than just broadening the existing market, but rather turning to a whole new market with a new and branded product line sold to retail chains abroad. It is important to know that penetrating new markets carries a considerable cost and requires a transition period, with the current business always demanding attention. You should ask yourself beforehand if you can afford such a move, and clarify the source for financing the endeavor.

To read the second and final part of the interview - click here.
For the response of Zfia Gilat, Head of Industry & Labor Association - click here.
For the response of Boaz Zar, CEO of Guy Plastic, a comapny taking part in ProductNet - click here.
For marketing tips by ZOOZ - click here.
Go to: Part I | Part II | Part III | Part IV | Part V