.XYZ Consulting
.Name of case/firm
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
● Population
• 50.6 Million
• Black Africans – 40.2M
• White Africans – 4.6M
• Other – 4.6M
• Target age group: 15-50
Most important in red
.Less important in black
.allows to emphasize – and perhaps not go
through every one
● Economic
• Fastest growing economies in Africa carry highest macroeconomic risk
• 8 of top 10 global vehicle makers
• 3 of world’s largest manufacturers
• More than 200 automotive component manufacturers
● Social
• Brand conscious
• Black: 49% of middle income, higher disposable income, new vehicles, features are
important, suspicious
• Buyer power is rising
• White: Earn higher income, spend more, less disposable income, used cars, functional is
important
● Legal
• Motor industry development program
• Automotive production and development program
• Import duty rates/discounts
Keep a running placeholder on ALL slides, to let them know where you are ... See next slide
Strengths
•
•
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•
Weaknesses
Worldwide brand awareness
Quality yet affordable products
Strong growth in the Chinese Market
Ranked number two in global sales for
sports retailers
•
•
•
Inexperienced in e-commerce and
social media
Weak online presence
Weak virtual storefront
Opportunities
•
•
Threats
Large target market
Growing popularity of online/mobile
shopping
Analysis
Alternatives
• Transition of traditional instore shopping to internet
shopping
• Competive Industry with
entrenched competitiors
• Low margins in retail industry
Recommendation
Implementation
General administration
Margin
Human resource management
Procurement
Inbound
logistics
Operations
Outbound
logistics
Service
Strength
• brick-and-mortar
Weakness
• virtual presence
Internal Analysis
Product
• Sporting
goods
• Table tennis
balls
• Treadmills
• Sports aparel
Price
• Moderately
priced
• “A good
bargain”
Placement
• Retail stores
• 33 in
China
• 400 in 15
countries
• Online
•Taobao
•Decathlon
store
Promotion
• Outdoor
billboards
• Local
newspapers
• Flyers
• Memberships
• Sporting events
• Contests
Internal Analysis
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Supplier Power
-Moderate
-Moderate imput on price
-High differentation of inputs
-High presence of substitute inputs
-Moderate supplier concentration
Buyer Power
-High
-High price sensitivity
-High level of
company alternatives
-Low switching costs
-High buyer volume
-High impact on quality
Competitive
Rivalry
-High
-High level of Competitors
-High concentration of
competitors
-High globalization of industry
Threat of Substitution
-High
-Many Alternatives
-Lowcosts of substitutes
-Moderate feasibility based
on geographical location
Threat of New Entry
-Low
-High cost barrier
-High cost barrier
-High brand identity
-High Government policy
External Analysis
• Improve Ecosystem
• Value (niche creation)
• Critical mass (robustness)
• Continous Performance Improvement (productivity)
• Co-evolution or joint learning and optimization effects
• Keystone Strategy
• Create value within ecosystem
• Share the value with other participants in the ecosystem
• Mission Statement/Core Values
• To become the most efficient, safe and sustainable port in the world
• Passion, collaboration, continuous improvement, reliable
• Attracting New Companies/Worldwide expansion
• Strengthen the relationships between businesses, governments, and
educational institutions
• Invest in high quality technological knowledge
• Sufficient Revenue
Analyis
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Opportunities
Turnaraound
Aggresive
Weaknesses
Strengths
Defensive
Diversify
Threats
Internal / External Analysis.
.
Strategic Group Mapping
(p. 100 Thompson)
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X
X
X
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x
Product life cycle
x
(p. 326 marketing book)
x
x
Introduction
Early
Growth
Growth
Late
Maturity
Growth
Saturation
Decline
.
.
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Internal Positive
●
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BCG – Matrix
“Question Marks”
High
(Pearce – 264)
“Star” ... Invest, invest
Select a few
Remainder
divested
Market
Growth
Rate
Dog - Liquidate or Divest
“Cash Cow” ... Milked
use for “star” and “?”
Low
Low
High
Cash Generation (Market Share)
Alternative #1
Alternative #2
Construction site
for offshore wind
turbines
Storage facility
Alternative #3
New energy plant
Alternative #4
Alternative #5
Lease to outside
client
Research & testing
facility
Alternatives
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Construction site for offshore wind
turbines
Advantages
Disadvantages
Established market
Does little to add to business
ecosystem
Aligned wth sustainability goals
Logistically complicated
Close to public areas
Alternatives
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Alternatives
Advantages
Disadvantages
Alternative #1:
Sample
Maintain Normal Course
of Business
•Growing market
•No increased risk
•Little to no extra costs
•Potential missed growth
opportunities
•Potential loss of competitive
advantage and market share
•Current decreased growth
rates
Alternative #2:
Sample
Aggressive expansion
into
intraregional/
international markets
•Growing market
•In line with company’s goals
•Increase market share
•Meet customer demands
•Harmonized regulations
•Knowledge of expansion
markets
•High associated costs
•Higher risk
•Little strategic implementation
time
•Few low-cost satellite airports
in place
•Negative government relations
Alternative #3:
Sample
Expand intraregional with
a strong focus on profit
•Growing market
•Cost benefits
•Increase market share
•In line with company’s goals
•Meet customer demands
•Harmonized regulations
•Knowledge of expansion markets
•Focus on profits means:
-Increase Shareholder Value
-Stimulated external investment
-Increase capital expenditures
-Growth within business operations
•Few low-cost satellite airports
in place
•High associated costs
•Higher risk
•Little strategic implementation
time
•Negative government relations
.
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Contract Assembly
•
•
•
•
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•
•
Build
manufacturing
facility
•
•
•
Improve margins - reduces cost of shipping by 25%
No major upfront investment
Option for companies with low volume
Must assemble 50,000 vehicles per annum and export to be eligible
for tradeable certificate
Import duty for CKD components: 20%
3-months lead time to commence operations
10 day vehicle ordering cycle
Standard for setting up own facility is annual sales of 6,000
units with a single brand selling 1,500
Must manufacture 50,000 vehicles per annum and prove content
localization to be eligible for tradable certificate
Have to maintan high production levels to break even
•
•
Global automotive market has not fully recovered from
recession
Industry has just recovered from a sharp decline in new-vehicle
sales in three consecutive years
Import duty for CBUs: 25%
Not eligible for tradeable certificate
Use South Africa as
a hub
•
•
•
Individual markets have to be developed over time
None of the 54 African countries has a sizeable middle class
Political turmoil
Exit Strategy
•
•
Sell assets
Divert resources to SsangYong
Wait-and-watch
•
•
Alternatives
.
Contract
Assembly
Manufacturi
ng Facility
Wait-andWatch
Re-Export
Hub
Exit
Strategy
Key Success
Factor
Weight
Rank
Weight
Rank
Weight
Rank
Weight
Rank
Weight
Rank
Weight
Exposure to
Risk
,35
3*
1,05
1*
,35
4*
1,4
1*
,35
5
1,75
Financial
Feasability
,25
3
,75
2
,50
4
1,0
1*
,25
5*
,75
Alligned with
Mission of
Parent
Company
,25
4
1,00
5
1,25
2
,50
5
1,25
3
,75
Competitive
Advantage
,10
2
,20
4
,40
2
,20
3
,30
3
,10
Presense in
South Africa
,05
3
,15
4
,20
2
,10
5
,25
1
,05
Total
1,00
3,15
2,70
3,20
2,40
3,35
Ranking Scale
1:
2:
3:
4:
5:
The alternative does not effectively address this criterion
The alternative may contribute to addressing this criterion
The alternative provides an average solution to this criterion
The alternative provides an above-average solution to this criterion
The alternative effectively addresses this criterion
Alternatives
Decision Gate Approach
(develop-step-by-step)
Monsoon as is
Amazon
Yes
Yes
Self-made
Remain the
Same
No
Online Sales
Monsoon
Modified
No
Pricing Structure
Change
Alternative #5
Exit Strategy
Recommendation
.
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• .
• .
• .
• .
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Financial Projections
Pro Forma Projections
Revenue growth
Profit margin
Lease expense
Operating expenses
Tax Benefit
Pro Forma Income Statement
(in RM millions)
Revenue
COGS
Gross Profit
Lease Expense
Operating Expenses
Pre-Tax Profit
Tax Benefit
Net Income
Pro Forma EBITDAR
EBITDAR margin
EBITDAR (RM millions)
(examples)
What
Who
Develop strategy for transition of resources to SsangYong
Board / CEO
Develop PR/marketing strategy to mitigate negative brand
reputation
PR/Marketing
Fulfill current obligations in South Africa
M&M (SA)
Prepare Egyptian facility to accomodate additional demand
if necessary
Management
Create marketing plan to increase sales from other
locations
Marketing
Sell assets
Finance /
Management
Assist displaced workers
Human Resources
Transition
Management
Implementation
.
.
.
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.
.
1 month
3 months
6 months
Develop strategy for transition of
resources to SsangYong
Develop PR/marketing strategy to
mitigate negative brand reputation
Fulfill current obligations in South
Africa
Create marketing plan to increase
sales from other locations
Prepare Egyptian facility to
accomodate additional demand if
necessary
Sell assets
Assist displaced workers
Milestone Review
Implementation
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Risk
Probability
Mitigation/
Contingency
South Africa/Africa
market grows faster than
expected
Low
Generate sales through imports
from India and Egypt
Parent Company does
not approve of exit plan
Low
Adopt a wait and watch approach
Implementation
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M-E
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