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Wavin Academy: A Business Design Journey

Wavin B.V. + Business Models Inc.

 

The Dutch company, WAVIN manufactures plastic pipes with manufacturing in more than 30 locations in Europe, with the exception of Turkey. Without a manufacturing facility there, they faced a common business challenge– how to gain market share and boost revenue. From their vantage point in the Netherlands, the Dutch sales and finance team thought that a 60 million euro investment to build a factory near Istanbul was the answer but Richard van Delden the Executive Director of Supply and Operations at Wavin, wasn’t so sure. How could Wavin recoup on an investment of that size while maintaining a competitive pricing structure? In a chance discussion with a Dutch contractor at a construction site, Van Delden found that the mechanical contractor is the one who specifies materials, and often they are unaware of supplier options. Based on that information, Van Delden believed that Wavin had a gap in the market and need to increase awareness among mechanical contractors in Turkey. He engaged Patrick van der Pijl at Business Model Inc. to lead an internal group to address the awareness challenge. Patrick applied a broad set of tools, mostly canvasses, to visualize the value proposition of the company. Then he taught the team how to market that value proposition, thereby answering to customer demands. The team co-created hundreds of ideas finally designing six business model options including online ordering, 3d printing, a plumber academy, and direct delivery.

Then van der Pijl gathered a group that included the company CEO and CFO as well as employees from Wavin Turkey for a customer ‘Safari’. They visited more than 400 plumbers, 20 distributors, 10 contractors, and 10 mechanical contractors over a period of 8 weeks. The team uncovered several key insights including one that directly contradicted insights learned in the Netherlands - contrary to operations in other countries, mechanical contractors were not an important customer segment in Turkey. It was distributors that played an important role in the process, connecting plumbing contractors and projects. In addition, contractors were well aware of Wavin products, the challenge was that underskilled plumbers that used materials and tools incorrectly created poor quality outcomes. The customer ‘Safari’ had provided invaluable insights that challenged assumptions and tested the business model concepts. Instead of a new factory in Istanbul or 3D printing, they landed on Wavin Academy, a training facility that provides training for the plumbers. It teaches them how to use Wavin products properly, connects contractors distributors and plumbers, and models best use practices.

Customers have found substantial value. To date twenty-one thousand plumbers have gone through programming and Wavin has expanded the Academy to three additional regions, with two more to come. And Wavin has reaped financial value as well saving 59.9 million euro by investing only 400 thousand to build the Academy. In addition, margins grew in all regions with Wavin Academies contributing a 136% revenue growth for the organization. The Academy in Adena, Turkey is additionally a social responsibility project. Syrian refugees make up a significant proportion of employment in the Turkish construction industry. Wavin Academy contributes to both the social and economic success of the building sector in Turkey. The initiative is a perfect example of bold business strategy transformation, encouraged by C-Suite engagement and built on the expert application of Business Design.

 
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