Strategic Modelling and Business Dynamics: A Feedback Systems Approach

10.4. Model Confidence Building Tests in Action: A Case Study in Fast-moving Consumer Goods

To illustrate confidence building tests, we examine a model developed with the management team of a company in fast-moving consumer goods. The modeling project was part of a doctoral thesis at London Business School (Kunc, 2005).^[] For confidentiality reasons, the case is disguised as the UK personal care market involving soap products that readers know well. The fictitious name of the client firm is the 'Old English Bar Soap Company'. The purpose of the project was to help the management team think through the launch of a new liquid soap product that had been developed as an alternative to its popular traditional bar soap in a premium quality segment of the market. Although the real-life product was not soap at all, the strategic innovation was similar to a change from bar soap to liquid soap.

^[] I am grateful to Martin Kunc for permission to adapt the case study in his PhD thesis for use in this chapter. Sections of the case text are based on Kunc and Morecroft 2007, ©John Wiley & Sons Limited. Reproduced with permission.

10.4.1. Soap Market Overview

Before the introduction of liquid soap, the personal cleansing market had been divided between bar soaps and shower gels. As Figure 10.5 shows, bar soap was the product leader with more than 70 per cent market share throughout the late 1980s and early 1990s. However, shower gels (which Old English did not make) had gained market share in ...