咨詢行業(yè)分析-RetailCo1課件

1、貝恩咨詢行業(yè)分析-RetailCo12022/9/30貝恩咨詢行業(yè)分析-RetailCo1貝恩咨詢行業(yè)分析-RetailCo12022/9/27貝恩咨BackgroundApproachConclusionImplementationResultsAgenda貝恩咨詢行業(yè)分析-RetailCo12BackgroundAgenda貝恩咨詢行業(yè)分析-Retai Retail Co is $10+B “speciality retail” conglomerate whose financial performance has deteriorated since 1990Background貝恩咨

2、詢行業(yè)分析-RetailCo13 Retail Co is $10+B “specialitAchieve top quartile performancemarket/book value: 2.8xreturn on equity: 17-18%annual earnings growth: 10-12%Divest businesses that are poor fitsPrepare the company to weather challenging industry conditionsCreate a compelling vision and growth strategyF

3、inancial ObjectivesStrategic ObjectivesBackgroundRetail Co Objectives貝恩咨詢行業(yè)分析-RetailCo14Achieve top quartile performanAgendaBackgroundApproachConclusionImplementationResults貝恩咨詢行業(yè)分析-RetailCo15AgendaBackground貝恩咨詢行業(yè)分析-RetaiDefine the characteristics of a successful strategy Develop a range of viable

4、strategic alternativesAssess and prioritise the strategic alternativesBuild consensus around the preferred strategyFully quantify the impact of appropriate action stepsGain final approvalLaunch implementationApproach貝恩咨詢行業(yè)分析-RetailCo16Define the characteristics of Components of Successful StrategyDo

5、able:Evolves from current business mixFits Retail Cos core competenciesIs fundableDevelops significant competitive advantagesCapitalizes on the volatility of retail cyclesUnderstandable:Communicates a clear and compelling approach to the businessWill be fully valued by analysts and shareholdersDesir

6、able:Creates clear economic value and top-quartile financial resultsbuilds a portfolio of high-potential businessesmakes business units more valuable to Retail Co than to othersAvoid excessive layers, overheads, and decision processesIs attractive to key managers in targeted businesses and functions

7、Approach貝恩咨詢行業(yè)分析-RetailCo17Components of Successful Strat Market sizeMarket growthSegment returnsSegment profitability trendsCompetitive intensitySupplier powerSegment stabilityMarket AttractivenessMarket shareMarket share trendGeographic coverageCurrent profitability/EVAEarnings trendManagement tea

8、mRetail brand equityInfrastructure and systemsCustomer value propositionStrategic PositionCorporate experience, skills, and valuesCorporate functional supportCorporate portfolio developmentCross-divisional sharingFitRetail Co businesses were evaluated along three groups of criteriaApproachRevising t

9、he Mix of Businesses貝恩咨詢行業(yè)分析-RetailCo18 Market sizeCompetitive intensFact BaseHow structurally attractive is this market segment? (projected)industry sizeindustry growthindustry profitabilitycompetitive intensitybuyer concentration/powersupplier concentration/powercommitted capital requirementsstage

10、 in market evolutionacquisition opportunitiesHow does the stock market value this segment?industry volatilitymarket valuation multiple and timingvalue transparency to stock marketDo we have a strong position today?market share (local/regional)market share growth trendsprofitabilityrelative cost posi

11、tionbrand equitycondition of assetsDo we have the key success factors to achieve a strong position tomorrow? (or can we acquire/build them)functional process capabilitiescost structurenew product/concept developmenthuman resources/people skillscapital resourcesHow does this business fit with other R

12、etail Co divisions and capabilities?cash flow generations/requirementscommon functional processescommon customer profileslinkage to central resourcesunique people skillsThe five questions approach was used to build fact base on every business of Retail CoApproach貝恩咨詢行業(yè)分析-RetailCo19Fact BaseHow struc

13、turally attrAgendaBackgroundApproachConclusionImplementationResults貝恩咨詢行業(yè)分析-RetailCo110AgendaBackground貝恩咨詢行業(yè)分析-RetaiBusiness Unit Evaluations (1 of 2) DivisionConclusionStrategic PositionMarket AttractivenessFitNorthLarge market ready for consolidation, good profitability, very strong positionHolla

14、ndLarge potential market with opportunity to boost growth and profitability through acquisitions and improved operating efficiencyItalyRapidly growing channel with high returns. Need to invest to capture market share and improve operating efficiencyHong KongLarge overall market with slow growth. Cas

15、h provider capable of funding growth businessesLuxembourgReevaluate growth plans. Economies of scale not yet achieved but segment extremely profitableConclusion貝恩咨詢行業(yè)分析-RetailCo111Business Unit Evaluations (1 oBusiness Unit Evaluations (2 of 2) BritainModerate size segment with good profitability bu

16、t strong competition; declining market share, low relative operating marginsIrelandDeclining market segment, poor position, little opportunity for sale, potential for savings by folding into Hong KongFranceOvercapacity in segment, losing market share, below average profitabilitySwedenLarge overall m

17、arket but requires substantial investment to develop new products and achieve scale to improve cost position; business has poor fit with Retail Co skillsSpainSmall segment, low growth, high volatility, and seasonalityDivisionConclusionStrategic PositionMarket AttractivenessFitConclusion貝恩咨詢行業(yè)分析-Reta

18、ilCo112Business Unit Evaluations (2 oBusiness Unit Recommendations DivisionStrategic PositionMarket AttractivenessFitGrow(Spin Off)North*HollandItalyHong KongLuxembourgHold Britain Divest Ireland France Sweden Spain *SpinOffConclusion貝恩咨詢行業(yè)分析-RetailCo113Business Unit Recommendations Strategic Altern

19、atives Long-term vision:Corporate profile:The leader in selected business lineschain drugapparelfootwearhometoysBusiness line competenciesCost and experience sharing in the groupsAcquisitions to achieve business line dominanceGroup-based organisationA balanced portfolio of speciality retailersResour

20、ce allocation competenciesLean corporate structureDecentralised managementGrow and keep successful businesses. Divest the unsuccessfulA leading developer of targeted growth-stage retailersSelection and expansion competenciesCorporate expertise in critical growth functionsbusiness development (R&D an

21、d research)real estatesystemslogisticsCost and experience sharing in key activities across all businessesAcquire and grow promising concepts. Divest when value-added peaksConclusionGroup SpecialistRetail ConglomeratesGrowth-stage greenhouse (Retail Co. “Classic”)貝恩咨詢行業(yè)分析-RetailCo114Strategic Alterna

22、tives Long-teRevise the mix of businesses in the portfolioallow North to pursue an independent strategysell France, Spain and Sweden at the right price and timeEnsure remaining businesses address the most important strategic issuesestablish clear strategies for growth businesses (Holland, Luxembourg

23、, Hong Kong, Italy)finalise turnaround plans for businesses which cant be sold at reasonable pricestake write-offs as requiredConsider acquisitionsReduce corporate expensesAdd value to the businesses in the portfoliobuild R&D capabilitiesleverage costsupgrade the organisationConclusionAction Recomme

24、ndations貝恩咨詢行業(yè)分析-RetailCo115Revise the mix of businesses iChain drug industry is consolidatingeconomies of scale in systems investmentsrelationships with third-party payersAn independent North generates significantly more shareholder value as it participates in the evolution of the industryNorth mak

25、es minimal use of corporate functions; there is little cost-sharing among North and the other divisionsMarket timing is attractiveNorths value is not being fully recognized in the marketplaceConclusionExample: Rationale For an Independent North貝恩咨詢行業(yè)分析-RetailCo116Chain drug industry is consoliPlanne

26、d capacity additions will result in industry-wide negative comp store sales through 1998Consolidation is essential to eliminate excess capacitylowers costsallows comp store sales growthRetail Co is better suited to be a seller than a buyersynergy is equal whether France chooses to acquire or be acqu

27、iredleading competitors market value is highermanagement group at France has several significant holesConclusionExample: Rationale for the Sale of France貝恩咨詢行業(yè)分析-RetailCo117Planned capacity additions wilContinue to pursue opportunities to consolidate and reduce over-capacityFill key executive openin

28、gsRestore the historical bargain edge with core customersincrease the mix of opportunistically-purchased goodsdeliver values averaging 20% below department store sale pricesReduce costs to support price reductionsreduce overhead costs by approximately $60MMreduce investment cost for new stores and r

29、emodelsClose unprofitable locations and exit several markets which France cannot dominateIf the sale of France takes longer than anticipated, several actions will be taken to improve Frances performance:ConclusionExample: France - Strategic Imperatives貝恩咨詢行業(yè)分析-RetailCo118Continue to pursue opportuni

30、tiVision:To consolidate our position as the leading widget retailer to our target customers (high-volume purchasers of trendy widgets in their 20s and 30s) To be recognized by our target customers as the leader in product assortment and customer service for widget retail (our unique positioning)To r

31、each a 10% share of the national widget retail market by the year 2000Financial Goals:To reach and maintain ROIC levels of 20%To grow sales by 5% per year and net earnings by 10% per year1998 sales objective: $1,225MM1998 net earnings objective: $47MMStrategy Summary (1 of 2)Conclusion貝恩咨詢行業(yè)分析-Retai

32、lCo119Vision:To consolidate our posiKey ImperativesInitiativesDevelop our new concept, Widget Factory, into the second-largest non-mall based widget retailerRetail Co Real Estate audit of potential new sitesWidget Factory rapid deployment initiative (opening of 30 new stores per yearClose non-perfor

33、ming storesClosing of the 10 worst performing mature stores (both XYZ and Widget Factory) each yearImprove margins by changing mix and reducing costsMix change based on GMROI approachImplementation of 4-Walls systemRedesign of logistics flow based on Retail Co studyImprove density of markets by back

34、fillling five marketsModify our image in the eyes of the customerAssortment redesign based on demand and profitabilitySales force training initiative on customer serviceLaunch of a new advertising campaignFocus new stores in Southern geographiesAcquire and integrate Southern Widget by end of 1996Ret

35、ail Co Real Estate audit of potential new sitesProposed partnership with Southern Malls, Inc.Strategy Summary (2 of 2)Conclusion貝恩咨詢行業(yè)分析-RetailCo120Key ImperativesInitiativesDeveFit with Retail Coclear opportunity for value creationpotential to maximize sharing with related divisionsMarket attractiv

36、enesssubstantial market potentialdominant market position opportunityconcept in early stages of a long lifecycleFinancial opportunitiesaffordable within target capital structuremeets minimum return and growth hurdlesLimited risk factorsexisting management talent or supplementablelow to moderate vola

37、tilityConclusionCriteria for Acquisition貝恩咨詢行業(yè)分析-RetailCo121Fit with Retail CoConclusionCrCorporate Cost Reduction Opportunities *Excluding interestConclusion貝恩咨詢行業(yè)分析-RetailCo122Corporate Cost Reduction Oppor Primary Levers:Corporate Roles:Corporate portfolio developmentKeep aware of market and cust

38、omer trends driving potential opportunitiesDevelop criteria for screening acquisitions and partnerships or alliancesIdentify and evaluate new concepts and consolidation opportunitiesDevelop a network of deal contactsStructure, negotiate and close dealsCoordinate effective integration planningEvaluat

39、e opportunities to spin-off/exit businessesFinancial controlsDefine primary measures of financial performanceSet specific financial return and earnings growth targetsDevelop financial planning and control systemsAllocate capital and other resourcesBusiness oversightDefine management decision-making

40、processesCoach divisional managementfocus managers on measurable resultsquestion assumptions and challenge thinkingProvide leadership on critical issues (e.g., division strategy, value disciplines, and priority and resource conflicts)Identify opportunities to improve operations and set specific impr

41、ovement goalsPrimary Levers Available to Add Value (1 of 2)Conclusion貝恩咨詢行業(yè)分析-RetailCo123 Primary Levers:Corporate Role Primary Levers:Corporate Roles:Expertise sharing and operational improvementInstill company wide commitment to spreading best practicescoordinate regular experience sharing at all

42、levelsfacilitate communication among divisions and functionsDrive value disciplines to improve operations across all processes, functions and divisionsProvide leadership and expertise to support improvements in performanceManagement allocation and developmentAttract, motivate and retain the best man

43、agementrecruit top tier candidatesreward based on performancepromote based on abilityProvide strong, profit- related incentives linked to corporate objectivesRotate managers across functions and divisionsDevelop formal training programsStrategydevelopmentPerform analysis to support strategic decisio

44、n-making (corporate and divisional)Define corporate strategic directionAssess market attractiveness, performance, position and fit of divisionswork with divisions to build high-quality, fact-based strategic plansIntegrate division plans with corporate strategyCentralservices and infrastructure shari

45、ngProvide scale services and functions to achieve lower cost and higher qualityLeverage infrastructure across businessesPrimary Levers Available to Add Value (2 of 2)Conclusion貝恩咨詢行業(yè)分析-RetailCo124 Primary Levers:Corporate RoleProjected Earnings NorthNew Retail Co*From Monte Carlo analysisNote: Earni

46、ngs equals net income after taxes and interestConclusion貝恩咨詢行業(yè)分析-RetailCo125Projected Earnings NorthNew R*With $300MM share repurchaseGap vs. SBP ProjectionsGap vs. RealisticROE target:ROE*:(Gap)/surplus:11.1%12.0%$10.8MM15.9%19.2%$35.6MM17.0%21.6%$61.3MM11.1%9.4%($22.4MM)15.9%13.4%($28.6MM)17.0%14.

47、9%($30.2MM)ConclusionGap Analysis貝恩咨詢行業(yè)分析-RetailCo126*With $300MM share repurchaseGAgendaBackgroundApproachConclusionImplementationResults貝恩咨詢行業(yè)分析-RetailCo127AgendaBackground貝恩咨詢行業(yè)分析-RetaiCorporate GovernanceThe decisions of the Board will be evaluated under the traditional business judgement rule s

48、tandardThe distribution of North should not require shareholder approvalthe distribution is a dividend which requires only board approvalAT&T precedentThe potential divestitures should not be considered a sale of substantially all of Retail Co remaining assetsNew Retail Co will be a substantial entity with estimated sales of $4.2B, net income of approximately $119, and assets of $2.1BImplementation貝恩咨詢行業(yè)分析-RetailCo128Corporate GovernanceThe decisiNote: Distribute North stock dividend at appropriate time3Q954Q951Q962Q963Q964Q961997Approve all components of