Odette School of Business

Transcription

1 CASE: SONAE SR S International Expansion University of Windsor Odette School of Business Presented By: Kevin Hamilton Michael Antolini Aleksa Zubic Vito Giovannetti < 1 >

2 AGENDA Objective : To identify a profitable and sustainable International Expansion Issue Identification Recommendations Decision Criteria Analysis Implementation Plan Financial Considerations Conclusion < 2 >

3 Issue Identification Highlighting the key issues for International Expansion 1. Economic Uncertainty, affecting demand in Spain and Turkey 2. Capital Intensive, Worten restricts scalability 3. Cemented Expansion Model for each store and brand 4. Lack of integrated IT System < 3 >

4 Recommendation #1 Retail Expansion in Spain Divest from Turkey SPAIN - Continue to improve supply chain connection with Portugal - Grow existing clothing retail operations - Maintain Worten Operations - Turkey - Divest from Turkey Assets due to continual losses < 4 >

5 Situational Analysis #1 Porters 5 Forces Model: Industry Analysis Bargaining power of Suppliers: High (only sell 10% own brand) Intensity of Rivalry: High Bargaining power of Buyers: High (growth of online, lots of competitors) Electronics Threat of Substitution: Moderate (other recreational activities exist) Threat of New Entrants: Low to moderate (capitalintensive to start) < 5 >

6 Situational Analysis #1 Porters 5 Forces Model: Industry Analysis Bargaining Power of Suppliers: Low to moderate (Zippy sells 100% own brands, Sport Zone sells 50%, MO sells Zippy products as well) Intensity of Rivalry: High (many different retailers, fashion-focused country) Bargaining Power of Buyers: High (many different retailers) Retail Threat of Substitution: Low (clothing is an essential item) Threat of New Entrants: Low to moderate (capitalintensive to start) < 6 >

7 Decision Criteria #1 University of Windsor Alternatives Decision Criteria Focus on Retail in Spain Focus on Electronic Growth Divest from Spanish Operations Exploiting Growth Opportunity Financial Feasibility Ease of Implementation Scalability < 7 >

8 Decision Criteria #1 University of Windsor Alternatives Decision Criteria Focus on Retail in Spain Focus on Electronic Growth Divest from Spanish Operations Exploiting Growth Opportunity Financial Feasibility Ease of Implementation Scalability < 8 >

9 Implementation Plan Recommendation #1: People & Organizational Structure - Continue to seek stable franchisees in Profitable locations Tactics - Streamline operations to save costs Financial Considerations - Maintain low capital requirement for ongoing expansion < 9 >

10 Recommendation #2 Implement New IT System Launch Online Strategy New IT System - Order Tracking - Customer Data Service Excellence - Stock/Inventory Management Global E-Commerce Platform - Enable Shopping via Multi Language Website - Mobile Application - Leverage leading online retailers (Amazon, Walmart, Allibaba) Digital Marketing - Search Engine Optimization, Targeted Social Media Advertising, Content Marketing < 10 >

11 Situational Analysis #2 SWOT: Strengths Weaknesses Opportunities Threats Strength Dedicated, experienced leadership team High revenue and profitability (68% of Sonae SR) Weakness Previous struggles in online marketplaces (Amazon) Weak IT system has led to complications with ordering stock Sold mainly brands that are not its own, making differentiation difficult Core Opportunity Online retailing Core Threat Competition by both brick-and-mortar and online retailers < 11 >

12 Decision Criteria #2 University of Windsor Alternatives Decision Criteria Organic Growth Brick & Mortar Joint Ventures Growing through investment into Online/IT Exploiting Growing Markets Exploiting Existing Markets Ease of Implementation Brand Equity < 12 >

13 Decision Criteria #2 University of Windsor Alternatives Decision Criteria Organic Growth Brick & Mortar Joint Ventures Growing through investment into Online/IT Exploiting Growing Markets Exploiting Existing Markets Ease of Implementation Brand Equity < 13 >

14 Implementation Plan Recommendation #2: People & Organizational Structure - Establish Internal IT Best Practice group - Hire Digital Media Team (Team of 5) - Hire Advertising Agency ($20,000) Tactics - SEO Strategy, Content Development, Pipeline Development Financial Considerations - Mobile Application ($25,000) - E-Commerce Website Re-Vamp ($50,000) - IT Platform & Training ($100,000) M Initial Investment IT/Tech 840K Maintenance and Staff < 14 >

15 Recommendation #3 Expansion Model Per Brand & Region Market Penetration Vs. Market Expansion Leverage Existing Partnerships - Reduces barriers to entry to new markets - Streamlines capital flow and investment - Centralizes regional operations and stability Sport Zone - Continue with franchise model and look to acquire brands - Targeted Mini Stores - India Strategy Zippy - Continue lucrative franchise model and look to bolster supply chain - Implement Regional Expansion Quota for Franchisees < 15 >

16 Situational Analysis CAGE: Cultural Administrative Geographical Economic Spain India Saudi Arabia China Cultural Administrative Geographic Economic *** - similar language and customs * - vastly differently language, religion, customs * - vastly differently language, religion, customs * - vastly differently language, religion, customs *** - both in European Union * - different laws and regulations for opening businesses ** - different laws and regulations, however already have partnership in place * - different laws and regulations on owning businesses *** - share a border, low shipping costs * - long distance for shipping and monitoring ** - moderate distance for shipping and monitoring * - long distance for shipping and monitoring ** - same currency and similar economic standing, free trade ** - growing middle class, lower labour rate * - dichotomy in purchasing power ** - dichotomy in purchasing power but growing middle class < 16 >

17 Decision Criteria University of Windsor Alternatives Decision Criteria Brand Acquisition Market Penetration Market Development Exploiting Growing Markets Exploiting Current Markets Ease of Implementation Financial Feasibility < 17 >

18 Decision Criteria University of Windsor Alternatives Decision Criteria Brand Acquisition Market Penetration Market Development Exploiting Growing Markets Exploiting Current Markets Ease of Implementation Financial Feasibility < 18 >

19 Implementation Plan Recommendation #3 People & Organizational Structure - Establishing strong partnerships in regional hotspots Tactics - Niche Products for Local markets Warehouse and Distribution Centers - ie: Cricket India - Opportunity for Targeted Brand Acquisition Financial Considerations - Evaluating Brand Value, Building Feedback Collection System - Capital necessary for investment into PPE < 19 >

20 Wrap Up University of Windsor Thank You Q & A < 20 >

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