.XYZ Consulting

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.XYZ Consulting .Name of case/firm

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.XYZ Consulting. .Name of case/firm. The Challenge. How to develop a new area of the Rotterdam Port (Area A) to Attract new activities/companies collect sufficient revenue within the “Business Ecosystem” framework . - PowerPoint PPT Presentation

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.XYZ Consulting.Name of case/firmThe ChallengeHow to develop a new area of the Rotterdam Port (Area A) to

Attract new activities/companies collect sufficient revenue

within the Business Ecosystem framework Population50.6 MillionBlack Africans 40.2MWhite Africans 4.6MOther 4.6MTarget age group: 15-50

EconomicFastest growing economies in Africa carry highest macroeconomic risk8 of top 10 global vehicle makers3 of worlds largest manufacturersMore than 200 automotive component manufacturers

SocialBrand consciousBlack: 49% of middle income, higher disposable income, new vehicles, features are important, suspiciousBuyer power is risingWhite: Earn higher income, spend more, less disposable income, used cars, functional is important

LegalMotor industry development programAutomotive production and development programImport duty rates/discountsPESTLE ... PESTLE ... (iSince tech & environment not important to this case)Keep a running placeholder on ALL slides, to let them know where you are ... See next slideMost important in red.Less important in black .allows to emphasize and perhaps not go through every one

Analysis slide3SWOT Analysis (They had moving placeholder, shading the current SWOT topic) AnalysisAlternativesRecommendationImplementationStrengths

Worldwide brand awarenessQuality yet affordable productsStrong growth in the Chinese MarketRanked number two in global sales for sports retailersWeaknesses

Inexperienced in e-commerce and social mediaWeak online presenceWeak virtual storefront

Opportunities

Large target marketGrowing popularity of online/mobile shopping

Threats

Transition of traditional in-store shopping to internet shoppingCompetive Industry with entrenched competitiorsLow margins in retail industry Assets: very deep water, hinterland connetions 350 million consumers, favorable tax climate, balanced industrial cluster, clear regulationsCompeting modalities: road, rail, inland shipping, coastal shipping, pipeline4Value ChainEmphasize step that you will exploit or shore upp. 159 Pearce book

Internal AnalysisGeneral administrationHuman resource managementProcurementInbound logisticsOperationsOutbound logisticsMarketing and salesServiceMarginStrengthbrick-and-mortar

Weaknessvirtual presencePromotion

Outdoor billboards

Local newspapers

Flyers

Memberships

Sporting events

Contests

Placement

Retail stores

33 in China

400 in 15 countries

Online

Taobao

Decathlon storePrice

Moderately priced

A good bargain

Product

Sporting goods

Table tennis balls

Treadmills

Sports aparelInternal AnalysisCurrent Marketing Mix 4-PsAnalysis slide6....

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....Analysis slide7Supplier PowerBuyer PowerCompetitive RivalryThreat of SubstitutionThreat of New Entry ModerateModerate imput on priceHigh differentation of inputsHigh presence of substitute inputsModerate supplier concentrationHighHigh price sensitivityHigh level of company alternativesLow switching costs High buyer volumeHigh impact on qualityHighMany AlternativesLowcosts of substitutesModerate feasibility based on geographical locationLowHigh cost barrierHigh cost barrierHigh brand identity High Government policy

HighHigh level of CompetitorsHigh concentration of competitorsHigh globalization of industryExternal AnalysisPorters Five Forces ... (p. 94 Pearce ... P. 79 Thompson) Analysis slide8AnalyisKey Success Factors (106 Thompson ... 106 Pearce)Improve EcosystemValue (niche creation)Critical mass (robustness)Continous Performance Improvement (productivity)Co-evolution or joint learning and optimization effects

Keystone StrategyCreate value within ecosystemShare the value with other participants in the ecosystem

Mission Statement/Core ValuesTo become the most efficient, safe and sustainable port in the worldPassion, collaboration, continuous improvement, reliable

Attracting New Companies/Worldwide expansionStrengthen the relationships between businesses, governments, and educational institutionsInvest in high quality technological knowledge

Sufficient Revenue

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..Analysis slide11SWOT Strategies (p. 155 Pearce book).OpportunitiesWeaknessesStrengthsThreatsInternal / External Analysis..Strategic Group Mapping (p. 100 Thompson)XXXX.......

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....Analysis slide16..Product life cycle (p. 326 marketing book)IntroductionEarlyGrowthGrowthLateGrowthMaturitySaturationDeclinexxxx18Internal Positive......Analysis slide19Question Marks

Select a few Remainderdivested

Star ... Invest, invest Dog - Liquidate or DivestCash Cow ... Milked use for star and ?Cash Generation (Market Share)Low HighMarket GrowthRateHighLow

BCG Matrix (Pearce 264)Analysis slide20Alternative #1

Construction site for offshore wind turbinesAlternative #2

Storage facilityAlternatives ( different # boxes)AlternativesAlternative #3

New energy plantAlternative #4

Lease to outside clientAlternative #5

Research & testing facilityAnalysis slide21.

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.Analysis slide22Construction site for offshore wind turbinesAdvantagesDisadvantagesEstablished marketDoes little to add to business ecosystemAligned wth sustainability goalsLogistically complicatedClose to public areasAlternative #1AlternativesAnalysis slide23.....Analysis slide24....Analysis slide25AlternativesAdvantagesDisadvantagesAlternative #1: SampleMaintain Normal Courseof BusinessGrowing marketNo increased riskLittle to no extra costsPotential missed growth opportunitiesPotential loss of competitive advantage and market shareCurrent decreased growth ratesAlternative #2: SampleAggressive expansion intointraregional/international marketsGrowing marketIn line with companys goalsIncrease market shareMeet customer demandsHarmonized regulationsKnowledge of expansion marketsHigh associated costsHigher riskLittle strategic implementation timeFew low-cost satellite airports in placeNegative government relationsAlternative #3: SampleExpand intraregional with a strong focus on profitGrowing marketCost benefitsIncrease market shareIn line with companys goalsMeet customer demandsHarmonized regulationsKnowledge of expansion marketsFocus on profits means:-Increase Shareholder Value-Stimulated external investment-Increase capital expenditures-Growth within business operations Few low-cost satellite airports in placeHigh associated costsHigher riskLittle strategic implementation timeNegative government relations.

..Contract AssemblyImprove margins - reduces cost of shipping by 25%No major upfront investmentOption for companies with low volumeMust assemble 50,000 vehicles per annum and export to be eligible for tradeable certificateImport duty for CKD components: 20% 3-months lead time to commence operations10 day vehicle ordering cycleBuild manufacturing facilityStandard for setting up own facility is annual sales of 6,000 units with a single brand selling 1,500Must manufacture 50,000 vehicles per annum and prove content localization to be eligible for tradable certificateHave to maintan high production levels to break evenWait-and-watchGlobal automotive market has not fully recovered from recessionIndustry has just recovered from a sharp decline in new-vehicle sales in three consecutive yearsImport duty for CBUs: 25%Not eligible for tradeable certificateUse South Africa as a hubIndividual markets have to be developed over timeNone of the 54 African countries has a sizeable middle classPolitical turmoilExit StrategySell assetsDivert resources to SsangYongAlternativesOverview of Alternatives 1-4Analysis slide28Contract AssemblyManufacturing FacilityWait-and-WatchRe-Export HubExit StrategyKey Success FactorWeightRankWeightRankWeightRankWeightRankWeightRankWeightExposure to Risk,353*1,051*,354*1,41*,3551,75Financial Feasability,253,752,5041,01*,255*,75Alligned with Mission of Parent Company,2541,0051,252,5051,253,75Competitive Advantage,102,204,402,203,303,10Presense in South Africa,053,154,202,105,251,05Total1,003,152,703,202,403,35.Ranking Scale1: The alternative does not effectively address this criterion2: The alternative may contribute to addressing this criterion3: The alternative provides an average solution to this criterion4: The alternative provides an above-average solution to this criterion5: The alternative effectively addresses this criterion***Weighted Competetive Strength AnalysisAlternatives29Decision Gate Approach (develop-step-by-step)30Alternative #5

Exit Strategy

RecommendationRecommendation.

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..Useful for Financials.Pro Forma ProjectionsRevenue growthProfit marginLease expenseOperating expensesTax BenefitPro Forma Income Statement(in RM millions)RevenueCOGSGross Profit

Lease ExpenseOperating ExpensesPre-Tax Profit

Tax Benefit

Net IncomePro Forma EBITDAREBITDAR marginEBITDAR (RM millions)Financial Projections (examples)Analysis slide34WhatWhoDevelop strategy for transition of resources to SsangYongBoard / CEODevelop PR/marketing strategy to mitigate negative brand reputationPR/MarketingFulfill current obligations in South AfricaM&M (SA)Prepare Egyptian facility to accomodate additional demand if necessaryManagementCreate marketing plan to increase sales from other locationsMarketingSell assetsFinance / ManagementAssist displaced workersHuman ResourcesTransitionManagementImplementation PlanImplementation . . . . . . .. 1 month3 months6 monthsDevelop strategy for transition of resources to SsangYongDevelop PR/marketing strategy to mitigate negative brand reputationFulfill current obligations in South AfricaCreate marketing plan to increase sales from other locationsPrepare Egyptian facility to accomodate additional demand if necessarySell assetsAssist displaced workersMilestone ReviewImplementationImplementation Timeline

(enough for short-medium-long term)Milestone reviews... P. 395 - Pearce..................RiskProbabilityMitigation/ContingencySouth Africa/Africa market grows faster than expectedLowGenerate sales through imports from India and EgyptParent Company does not approve of exit planLowAdopt a wait and watch approachImplementationMitigations/Contingency.ContingencyAnalysis slide43.ContingencyAnalysis slide44

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