A case study of
The Netherlands
NRCC 2012
1
2
3
4
Strategies for
increasing
market share
5
History
goes
back to
1891
6
A tour through history
Around 1970
Coop Netherlands, a national organisation of
Dutch co-operatives (market share 7.5%) with:
• mainly small sized supermarkets,
• distribution centers,
• a few restaurants and hotels,
• bakeries and some other food production
facilities and furniture and textile shops.
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A tour through history
Co-operative downturn
1970-1975
• Dutch co-operatives failed to concentrate and to cooperate, national co-operation was frustrated out of
perceived own interest of individual co-operatives:
umbrella organisation Coop Netherlands was dissolved
• Mismanagement: If concentrated, management was unable
to respond to the needs caused by the increased
complexity and growth
• Failure to timely adapt to rapid changes in competition and
economic circumstances
8
A tour through history
Co-operative downturn
1975-1990
• Most Dutch co-operatives were sold to commercial
enterprises, were dissolved or went bankrupt
• The only 2 surviving regional co-operatives merged into the
present Coop organisation
• Disposal of all other business segments than supermarkets
BUT
• Again, mismanagement in late eighties, due to an internal
focus rather than an consumer based orientation
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Rather tough times
10
Market share dropped and so did the
results
11
Coop needed reconstruction
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Back on track
Co-operative turnaround
Around 1990
Around 1990 Coop’s market share only was 0.75%
• Hiring of a turn`around manager and board
professionalisation
• External focus: extensive shop redesigning and equal
marketing/advertising activities (Coop Club Card)
• Switch from joint purchasing group
• Significantly increased level of cost consciousness resulted in
an efficiency and reorganization program
• Acquisition of bigger locations was key
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Strategy map - 4 supporting pillars
Slogan:
At Coop, you’re the boss
Mission: ‘Coop is a service oriented, clearly positioned, independent
co-operative that, whilst it is fully conscious of its position in society,
deliveres an optimal variety of food and related products/services to its
consumer and franchise members.
Core values: Co-operation, Entrepreneurial, Trustworthy,
1
Coop distinctive power
2
Using economies of scale
3
Sound growth
4
Excellent operations
A. Growth initiatives:
Project development &
store /chain acquisitions
B. Find growth
opportunities in existing
locations
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Continuous and ongoing fight for position on service and price level, a lot of
players ‘in the middle’
Cheap
Discount /
Price
Low
service
High
service
Service
Middle
Expensive
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Continuous battle in the playing field
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Fragmented landscape, market leader 34% market share, hard discounters
14% market share and show steady growth
Stores #
Average size m2
33.6%
850
1,261
₤ 9,406
Service
12.0%
406
986
₤ 3,360
Value for money
10.0%
222
1,124
₤ 2,800
Quality discount
6.0%
263
920
₤ 1,680
Service
4.2%
99
1,041
₤ 1,176
Quality discount
2.5%
125
1,025
₤ 722
Value for money
2.7%
207
680
₤ 757
Service and
value for money
1.4%
285
305
₤ 392
Service
2.1%
61
1,027
₤ 588
Value for money
1.6%
56
1,113
₤ 448
Value for money
1.0%
55
1,039
₤ 280
Value for money
0.7%
34
959
₤ 210
Quality discount
1.0%
29
1,064
₤ 280
Quality discount
Market share
Gross Sales (in ₤ mln)
Buying
Market segment
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Price is a hot issue in the Netherlands
Source: Eurostat
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Case studies
• Merger Coop and Codis, 2001
• Acquisition of:
11 stores of DeWitKom@rt, 2005
18 EDAH stores, 2006
24 SuperdeBoer stores, 2010
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5 D’s
Dream
Discipline
Differ
Do
Dare
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What’s your dream?
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Opportunity
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Do it!
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Edge upwards
Co-operative growth 1995 - 2011
Merger
Coop
• Consumer co-operative
with own Coop shops:
• Outsourced logistics
• Member of a purchasing
co-operative, Superunie
• Mid Netherlands
Codis
• Franchise based co-operative,
outdated formats/concepts
• In house warehousing/logistics
• Member of a privately owned
purchasing company
• North East and South West
Netherlands
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Dare
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International business opportunity?
Consumer Co-operatives Forum
2012 AND BEYOND:
BUSINESS STRATEGY OF CONSUMER CO-OPERATIVES
London, 29th & 30th September 2011
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Competion Authorities
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Edah acquisition case
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If necessary, create a consortium
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Monster multi member consortium
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Discipline is essential
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Store allocation, bidding, financial
backing
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Road show for franchisees turned out
to be a brilliant idea
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Mergers of consumer co-operatives
6 recommendations
1. Separate commercial from governance integration in
implementation stage
2. Make a plan to achieve rapid commercial integration
3. Early establish clearness about leadership of merged society
4. Ensure transparency in decision making process
5. Get all stakeholders’ support
6. Provide stakeholders opportunity to help shape governance
of new co-operative society
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Acquisitions made by co-operatives
6 recommendations
1. Evaluate financial resources
2. Make a good commercial integration plan
3. Raise new employees’ awareness on co-operative principles
and values
4. Make sure employees understand growth through
acquisition is beneficial
5. Secure members’ particular advantages
6. Stress co-operative differences in the retail market
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Immediately deal with leadership issue
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Execute as military operations
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Buddies are here to help
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Stress the co-operative difference
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Wrap up
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