L/O/G/O Group No.7 20061001 기 영민 20090933 손 수민 20090517 하 시현 Contents 1 Lotte Department Store 2 Electronic Data Interchange 3 SWOT Analysis 4 Value Chain 5 Porter’s Five Forces 6 Hammer’s Reengineering Principles LOGO 1 Lotte Department Store • Lotte Department Store is a Korean retail company established in 1979 and headquartered in Sogong-dong Jung-gu, Seoul, Korea. • Lotte Department Store offers retail consumer goods and services and is one of eight business units of Lotte shopping. • Lotte Department Store has opened thirty four branches as the largest firm in Korea. LOGO 1 Current Market Situation Lotte Department Store has the highest market share, 42% in 2010. Lotte, Hyundai and Shinsegae are the nation’s top 3 companies. The Concentration Ratio of 3 Companies is 82%. LOGO 1 Visions Lotte Shopping including Lotte Department Store ranked sixth in department store section of ‘Global 2000’ which is selected by Forbes, the U.S. business magazine. ‘Global 2000’ is the international ranking determines by Forbes based on assets, sales, net profit and market capitalization of each company. LOGO 2 SCM & EDI Supply Chain Management Electronic Data Interchange Strong Relationship between the retailer and suppliers Place right amount of products in the right position LOGO 2 Advantages of EDI Cost Saving EDI save a company money by providing an alternative to, or replacing information flows that require a great deal of human interaction and materials such as paper documents, meetings, faxes, etc. Error Reducing All transactions are accomplished in network systems, so it prevents occurrence of errors and makes fast and correct information exchanges possible. Time Saving The trading partner receives and incorporates the information into their system thus greatly reducing cycle times. LOGO 2 Lotte EDI system WEB-EDI serving information like delivery, sales, price and tax in 2003. Lotte EDI system to reduce office hour times and cost for document organization and optimization Lotte EDI system sharing the information with online market LOGO 2 Lotte EDI system Item information Order information Registration of product numbers Present condition of product numbers in branch stores Registered information about each product Supply information Deliver information on date and margin Concrete delivery condition information Registration and Correction of delivery and delivery condition Information statement or TAG. QR processing Lotte EDI System Account information Information payment breakdown on each item and margin Information about delayed, deducted payment breakdown LOGO 2 Innovation of Lotte EDI system Product Order to Stock Time to Check Data: 70 minutes Office Hour: 97 minutes Time to Check Merchandise: 4 hours Monthly Bookkeeping Deadline: 6 hours Only 3 days taken to Ordet and Stock Product Time to Check Data: 30 minutes Office Hour: 54minutes Time to Check Merchandise: 1 hours Monthly Bookkeeping Deadline: 3 hours LOGO 3 SWOT Analysis Strengths Weaknesses The nation’s No.1 highstreet retailer High dependence on Main store Strong brand power The largest total number of stores in Korea The largest distribution network Well equipped with merchandise of various types and prices Exaggerated weight on clothes among overall sales Low ratio on direct purchase below 10 percents High dependence on the sales of masterpiece made in foreign country LOGO 3 SWOT Analysis Opportunities Threats Possibility of consumption activation by connecting online and offline Intense chase of rival companies Increased demand on high-priced article Appearance of new customer base (LOHAS, BOBOS, slow food, downshifts etc The sudden increase in competitive 20 to 30 young people The rise of home shopping industry and discount industry Deepening price competition by internet or online trade Deepening competition by saturated domestic distribution market. LOGO 4 Value Chain LOGO 4 Value Chain &Technology Inbound Logistics Transportation Material handling Material Storage Communication Testing Information System Firm Infrastructure Human Resource Management Technology Development Procurement Operation Outbound Marketing Logistics &Sales Process Materials Machine Tools Material Handling Packaging Maintenance Testing Building Design Information System Transportation Material Handling Packaging Communication Information Systems Media Audio Video Communication Information Systems Service Testing Communications Information Systems LOGO 5 Porter’s Five Forces Database Customization Easier Access Satisfaction Customer Trend Brand Image Distribution Channel High Scale Threshold Short Supply of Good Quality Products Discount Stores Home shopping Online Shopping Malls After the financial turmoil in 1997, High Concentration Ratio Customized Strategy Differentiated Product LOGO 6 Hammer’s Reengineering Principles High Dependence on Main Store ↓ ↓ Bridge the Gap between Main Store and Chain Stores LOGO L/O/G/O Thank You!