Case Study

Reorganization and improvement in corporate culture increase sales and employee retention

Client Profile

Baby Food Co.* is a large producer of baby foods and nutritional products. The company is operating in most major consumer markets, including Mainland China and Hong Kong.

Client Challenge

The company had been enjoying success in the Hong Kong market for nearly 5 years, yet their 18-month-old operations in Mainland China were clearly facing problems. Sales were down despite high customer satisfaction. Additionally, the employee turnover rate, from entry-level to upper management, had reached an unsustainable level. Baby Food Co. needed to identify the problems and how to solve them.

Our Approach

Our organization experts at Mersol & Luo took a meticulous approach in identifying the problems with Baby Food Co.’s operations in Mainland China. 

We carried out an extensive review, including internal communications, policies, and interviewed current and past employees, among other research and industry factors considered. 

Following our review, we delivered conclusions and recommendations to the company leadership. From there we supported Baby Food Co. through a complete overhaul in organization and culture, both locally in Mainland China and in the head office’s approach to their local operations. 

Result

Utilizing Mersol & Luo’s recommendations and local market expertise Baby Food Co. shifted away from a one-size-fits-all approach to its organizational management and corporate culture. 

This included adaptation of management in the local office to the local culture, increased use of the Chinese language in internal communications within the local office, and greater number of Chinese in key upper management positions, among other important changes.

With our guidance, they instituted a local management style and work culture that were better suited to Mainland China’s cultural context. Over nearly 2 years, this resulted in better integration, higher reported job satisfaction among local employees, 65% decrease in turnover rate, and steady increase in sales to the point of profitability.

Over nearly two years:

32%

Increase in sales and return to profitability

65%

Decrease in talent turnover rate

72%

Increase in reported employee satisfaction

*We protect the confidentiality of our clients. Although the name has been changed, the results are real.

About Mersol & Luo

Mersol & Luo’s expertise on the Chinese economy assist global companies in ensuring their expansion to China is appropriately prepared for to maximize profits and market impact. By having local understanding, relationships and real-time trade experts Mersol & Luo guides you through the process. 

We are the preferred partner for companies around the world