Happy customers, Happy partners
A GROWTH PLAN FOR JLP
SA BRA CONSULT I NG TEA M - GGFBM
What can we do for the partnership in the wake
of Brexit & looking forward to 2028
HRMSupply
chainBusiness
Happy customers, Happy partners
Backward
Integration
Increase
Waitrose
market share
Develop
Online
Analysis
Strengths
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Known for service
Known for quality
HRM as a strength
The company has a strong brand that should be utilized
Challenges - Brexit
➢What will happen to the costs of imported goods?
➢Where can the company recruit warehouse workers?
➢What is the best format for the supply chain?
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Brexit imposes multiple threats
Challenges – The future
What will the work force look like in 2028?
Robotics instead of people, online commerce continually growing
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Looking ahead, we must be pro-active and not reactive
Competition – Department stores
Fragmented stores, fragmented competition
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
The competition in department stores is fierce
Mark’s & Spencer’s
Harrods
Dickens
(electronics)H&M (fashion) Nike (sports) Etc.
Competition – Department stores
Online
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Online retail is the place to be
Amazon and Hellofresh heavy competitors
- They have no stores to upkeep
- Both are big enough to endure change
Waitrose
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Waitrose is a good investment for the future
➢ Quality food
➢ Agile store concept
➢ Fitting local sustainable and
healthy trend
66%
34%
Sales in the partnership
Waitrose Others
Waitrose - Competition
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Waitrose has room for growth in this segment
28.10%
16.50%15.60%
10.90%
6.20%
6%
5.30%4.50%
Market share
Tesco Sainsbury Asda Morrisons Aldi The co-operative Waitrose Lidl
“Bricks and Clicks”
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Online is a valuable investment
6%
14%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2011 2014
Growth rate in online sales
➢ Online is growing and expected to continue to grow
➢ Waitrose allow pickup at various
locations
➢ Online requires great customer service
Value Chain
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
There is room to grow within the value chain
Farm
Suppliers
Manufacturing Logistics Stores
Alternatives
Preserve values and expand
Core values
Business fields
Customer service
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Re-think business
ownership
Penetrate new
markets
Integrate core value
with market trends
internal
Core values
Job security for partners
Customer service
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
attr
acti
ven
ess
Happy partners happy customers
alternatives
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
inte
rnal
external
Re-think business
ownership
Changing partnership structure
Not core valueRisk failure
alternatives
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
inte
rnal
external
Penetrate new
markets
Penetrate European markets
Unknown marketNo answer for workers
Not answering tech trends
alternatives
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
inte
rnal
external
Reduce physical D.SOnline shopping
Training low wage workers-manufacturing and C.S
Focus on Waitrose business and increase market share
Backwards integrationWhite label
Sustainability& core values
Integrate core value
with market trends
Recommendation
HRMSupply
chainBusiness
Happy customers, Happy partners
Backward
Integration
Increase
Waitrose
market share
Develop
Online
Implementation
HRMSupply
chainBusiness
Happy customers, Happy partners
Backward
Integration
Increase
Waitrose
market share
Develop
Online
What?
➢ Purchasing manufacturing plants in:
➢ Dairy
➢ Grain
➢ Whine
➢ Veg packaging
Why?
➢Create jobs for the low wage partners:
➢ Manufacturing line
➢ Storage
➢ Packaging
➢ Etc.
Why?
Farms, dairy etc.
Suppliers
Manufacturing
Manufacturing
Logistics Stores
Self sustainable and protected from Brexit
Why?
➢ Creating higher margins
How?
➢ 2018 – 2020: Training of low wage workers
➢ 2018 – 2019: Purchasing 5 dairy and whine manufacturing plants
➢2020 – 2021: Purchasing 3 vegetable packaging plants
➢ 2020 – 2025: Purchasing 4 grain manufacturing plants
What?
➢ Focusing on Waitrose growth
➢ Improving online services
➢ Implementing technological change in stores
➢ Keeping excellent customer service
Why?
➢ New jobs in customer service and customer success
Why?
➢ Waitrose will enjoy strong value chain
➢ Waitrose is not strongly effected by Brexit
Why?
➢ Potential growth in market share 6.4%
➢ Strong revenue channel
How?
➢ 2018 – 2020: Training talents from low wage workers to customer service
➢2018 – 2021: developing online division with 3rd
party company
➢2020 – 2025: implementing technological change
What?
➢Develop online services
➢Decreasing department stores physical shops
Why?
➢ Shifting to jobs that will survive tech disruption
Why?
➢Answering world trend
➢Reducing physical department stores to lower expenses
How?
➢2018- 2021: improving online services through 3rd party company
➢ 2018-2028: gradually closing department stores and reducing them from 34 to 10
Financials
Financial management
We want to be as financially stable as we possibly can be
Labor employs capital, feel in control of our future
Make decisions in the long-tern, not reacting in short-term
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Financial record2017 2016 2015 2014 2013
Gross sales total 11,374 11,018 10,942 10,171 9,541
Waitrose 6,633 6,461 6,508 6,119 5,763
John Lewis 4,741 4,557 4,433 4,059 3,777
Revenues total 10,026 9,748 9,701 9,027 8,465
Waitrose 6,245 6,086 6,135 5,753 5,416
John Lewis 3,780 3,662 3,565 3,274 3,049
Operating profit before
Bonus & items
(18.5) (80.7) (45.6) (65.3) (55.6)
Waitrose 253 232 237 310 292
John Lewis 243 250 250 226 216
Net finance costs (107) (96) (99) (94) (110)
Exceptional items 171 129 79 (43)
Profit for the year 353.5 223.2 143.5 101.6 101
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Financial record
5,7356,111
470101.6
9701
10942
442 143
9748
11081
402 223
10026
11374
478 353
0
2,000
4,000
6,000
8,000
10,000
12,000
revenues gross sales oporating profit profit of year
2014-2017, in millions of pounds
2014 2015 2016 2017
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Balance sheet
5,5245,857
6211 6,286
3,742
4,3334146 4230
485721
372 250
17811,518
2065 2055
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2014 2015 2016 2017
2014-2017, in millions of pounds
total assets total liabilities net debt net assets
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Financial record
15% 11% 10% 6%
202
156145
89
0%
5000%
10000%
15000%
20000%
25000%
2014 2015 2016 2017
2014-2017, in millions of pounds
% of eligible pay partnership bonus
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Financial recordCompany’s CAGR 2013-2017
37%
84700
9100093800
91500
86700
80000
85000
90000
95000
2013 2014 2015 2016 2017
no. of employees
no. of employees
Downward in profit 2015-2016 due to exceptional items
Fluctuations- decrease in partnership bonus
decrease in full-time employees
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Financial time-line2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Backward
integration
3 dairy
farms
+ 1 wine
2 dairy
farms
Backward
integration
- 2
vegetable
farms
Backward
integration
- 3
vegetable
farms
Backward
integration
2 grain
fields and
processing
Backward
integration
2 grain
fields and
processing
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
White label
Move to customer services
Move to manufacturing
On-line dev.
32 30 25 20 10
Financial expenses time-lineexpense How much amount Time line
Dairy farm manufacturing acquisition- 1 unit 10,000,000 pound 5 units 2018-2019
Vegetable packaging acquisition- 1 unit 6,000,000 pound 5 units 2020-2021
Grain products manufacturing and processing
acquisition- 1 unit6,000,000 pound 4 units 2022, 2024
Winery acquisition- 1 unit 5,000,000 pound 1 unit 2018
Costumer service training - yearly 4,000,000 pound 3 years, 20,000 employees 2018-2020
On-line development and training- yearly 8,000,000 pound 2 years, 100 employees 2018-2019
Manufacturing training- yearly 8,000,000 pound 5 years, 1600 employees 2018-2022
White label design and development- yearly 4,000,000 pound Every year 2018-2028
Tech development and implementation 6,000,000 pound 5 years 2020-2024
total
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Financial expenses time-line2018 What? 2019 2020 2021 2022
30000000 dairy 20000000 dairy 12000000 veg. pack 18000000 veg. pack 12,000,000 grain
5000000 winery 6000000 veg. pack 4000000 c.s training 8,000,000manufacturing training 4000000 c.s training
4000000 c.s training 6000000 grain 8,000,000
manufacturing training 4,000,000
white label developme
nt 8,000,000
manufacturing trainig
8,000,000 online dev. 4000000 c.s training 4,000,000
white label developme
nt 6,000,000 tech dev. 4,000,000
white lable developme
nt
8,000,000manufacturing training 8,000,000 online dev. 6,000,000 tech dev. 6,000,000 tech dev.
4,000,000
white label developme
nt 8,000,000
manufacturi
ng training
4,000,000
white label developme
nt
59,000,000 total 56,000,000 total 34,000,000 total 36000000 total 34,000,000 total
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Financial expenses time-line
2023 What? 2024
4,000,000white lable
development 12,000,000 grain
6,000,000 tech dev. 4,000,000white lable
development
6,000,000 tech dev.
10,000,000 total 22,000,000 total
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Reducing 24 physical stores-
Saving 10,000,000 yearly
selling 24 physical stores-
Earning – 120,000,000
(each store 5,000,000)
Financial expenses time-line
6557 7211 8294 9953 1244216175
22645
32835
48596
72894
112986
6061 6018 5936 5938 5836 5712 5624 4499 3149 1889
94448
496 1194 2358 4015 4606 660610463
17021
28336
45447
71005
0
20000
40000
60000
80000
100000
120000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Chart Title
revenues expenses net profit
Risk Mitigation
Risks
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Impact
Probability
Conflict with
workers
Loss of customers
New competition
Risk Mitigation
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Impact
Probability
Conflict with
workers
- Incentivise workers with additional
benefits- Alternative jobs
through training
Risk Mitigation
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Impact
Probability
Loss of customers - Offer discounts and
promotions- Strengthen marketing efforts
Risk Mitigation
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
Impact
Probability
New competition
- JV with competitors- Penetrate new
markets
HRMSupply
chainBusiness
Happy customers, Happy partners
Backward
Integration
Increase
Waitrose
market share
Develop
Online
Q&A
Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A
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