Enterprise Thinking
Estee Lauder Travel Retail
Hermon Kaur Raju
Spring 2008
“One does not reach greatness through one’s accomplishments, but
through the accomplishments of those whom’s life one has touched.”
OBJECTIVE OF TEAM NAM:
Provide maximum support to our sales force, both branded and generic
by utilizing our resources in the most productive and effective way.
Deliver results to our management and our shareholders. This means
working efficiently, by strengthening our relations both internally and
externally with our retailer and bringing the best out of the people we
touch.
-Carlos Arancibia
Estee Lauder Travel
Retail
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The mission is to “apply and adapt global brand strategies to
consumer needs in the Travel Retailing channel of
distribution.”
Headquarters: Miami, London, and Singapore
Offers 20 of the 26 brands to the traveling public
Provides a convenient shopping alternative for our existing
customers while introducing our brands to new consumers
Characterized by
– Exclusive product offerings
– Unique promotional vehicles
– Innovative merchandising concepts
The Aim: “To serve existing consumers, recruit new consumers, and
enhance brand awareness and equity as we maximize sales and
profits by providing an attractive and inviting shopping
environment and experience” – Olivier Bottrie
The Aim of Enterprise
Thinking…
Moving forward by doing things
 Better
 Faster
 Cheaper
Applying 4 key Initiatives
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Redefining
Managing Projects
Alliances
Time Management
What is Redefining?
A management leadership tool to
always find a better way to discover
new competitive, mega advantages by
redefining challenges, problems and
opportunities.
Step 1.
Challenge Statement
Challenge:
International
Shoppes’s net sales
do not reflect its
retail sales growth.
Test the Statement
through 6 Criteria
Test Questions
1. Is the CS one issue? Yes
2. Is the CS in the present or future tense?
Present
3. Is the CS a problem or solution? Problem
4. Are the CS facts verifiable ? Yes
5. Are the CS assumptions valid ? Yes
6. Is the CS essential to your overall goal? Yes
The Challenge In Depth….
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1st quarter retail sales: 966K
1st Quarter Net sales: 300K, 420K
retail value
Essential items are always out of stock
There is no 6 month inventory
We should be at net 580 K, so
increase sales 100%
Step 2: Should Statement
Judge against criteria again…
How can we verify this?
Ask: Why do the net sales not reflect the retail sales?
Dig deeper…
What is my ultimate end?
International Shoppes should be ordering more stock every month to match their retail
sales growth.
Give myself a goal and convert into a
WHAT WOULD IT TAKE Statement
Step 3:
What Would it Take?
What would it take for
International Shoppes to order
100% more stock in FY 2009?
What I Need to Know:
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Retail Sales
Net Sales
Net vs. Retail for other brands
Stock levels
Relationship Issues
Backorders
Step 4:
Scan the Surface for Solutions
(Put on Different Hats)
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Higher Retail Sales Initiatives: Introduce a Spiff program, Monthly GWP
promotions
Clinique minimum order requirements
Checking warehouse stock levels weekly
Renegotiate stock levels- order more travel sets
HPPS with assigned goals
Reducing backorders on a corporate level to ensure we have stock on shelf
Enlarge warehouse
Analyzing retail sales
Check to see if mins and maxs are set correctly
Increase counter space
Scrutinize sales recording system
Scrutinize Inventory Analysis
Rework personal sales strategy
Redefine Solutions..
Measure each prospective solution against a list of qualifiers to
narrow the list of possibilities to the BEST option.
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Resources required (time, staff hours, money, etc.)
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Potential impact
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Strategic fit/core competency
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Market conditions
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Time to implement
Step 5: Redefining produced
the following solutions:
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Adjust Min and Max
Renegotiate stock levels by increasing
travel sets
Eliminate backorders corporately
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Reworking Personal Sales Strategy
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Renegotiate stock levels- increase travel sets
Adjust Min and Max
Rework Personal Sales Strategy
Step 5 and 6:
Test Solutions
Small and Large Scale
Small Scale Testing:
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Focus group with other Senior Account Coordinators
Run proposals by upper management and International
Shoppes management
Discuss with Beauty Consultants
Large Scale Testing:
 Compare quantifiable sales output regarding an account
which buys in exactly in ratio to what it sells out
 Test market solution by increasing stock for one month
and comparing retail sales compared to LY
 Offering a more customized selling approach, enhancing
value sets and bargains and comparing results after one
month
Managing Projects
Prioritizing Selected Projects
Putting Projects First Based on R0I
Project
Generic
Staff
Training
Time
Impact
R0I $
Money
Invested
Priority
Selected
$20 K
$5,000
3
$7000
2
50 hrs
80
Event
Strategy
16 hrs
75
Online
picture
database
20 hrs
20
$1K
$50
5
Online
Focus
Forum
6 hrs
30
$50K
$0
4
Assortment
Updates
30 hrs
65
$100K
$0
1
$45K
The Right Number of Projects
You can only do two projects at a time and assist other people occasionally
with their two projects
Hermon
Dealing with two
projects at one
moment usually
results in an
80% efficiency
Eduardo
Hermon
Project Bank
Annamaria
Annamaria
Eduardo
Time Management
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Institute time management approach
with to do lists the day before
2 projects at a given moment
Focus on priority projects
Our job as managers is to think
strategically and develop systems and
procedures
CPM Chart
Activity
A.
Receive Plannograms
B.
Order Visuals
C.
Create Assortment
D.
Order Open Service
E.
Order Testers
F.
Merchandising Date
G.
SOH Clinique
H.
SOH Estee Lauder
I.
SOH Aramis
J.
Arrange Security Clearance
K.
Schedule BAS to work
L.
Confirm open service
M.
Confirm all visuals
N.
Confirm all testers
O.
Buy misc. elements
P.
Confirm with Shop Fitter
Q.
Store Merchandising
Immediately Prec
None
A
A
A
BCD
BCD
EF
EF
EF
GHI
GHI
GHIJK
GHIJK
GHIJK
LMN
0
P
Time (days)
7
2
2
2
3
3
3
3
3
3
3
3
3
3
1
3
3
Critical Path MethodNew Installations
ES: 7 EF: 9
ES: 12 EF:15
B
ES: 0 EF: 7
A
ES: 7 EF:9
C
G
ES: 9 EF: 12
ES: 12 EF: 15
E
ES: 7 EF:9
D
ES: 15 EF: 18
L
ES: 15 EF: 18
H
M
ES: 12 EF: 15
ES: 15 EF: 18
I
N
ES: 12 EF: 15
ES:9 EF: 12
J
F
ES: 12 EF: 15
ES: 16 EF: 19
P
ES: 19 EF: 22
Q
K
ES: 15 EF: 16
O
Alliances
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Optimize resources and strategies
Through Alliances seek new ventures
and opportunities
Alliance Requirements
Clear understanding of goals of each party
(e.g., student recruitment for each school)
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Benefits to each party (e.g., shared costs,
expanded reach, etc.)
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Clear definition of roles of all parties
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Definition of resources expended by each
party
Types of Alliances
Ad Hoc
Short Term
Minimum
Resources
Consortium
Long Term
Low Resources
Project Joint
Venture
Short Term
Medium
Resources
Joint Venture
Long Term
High Resources
Merger
Long Term
High Resources
Acquisition
Long Term
High Resources
Various Terms
Low Resources
Affiliate
Joint Venture: Estee Lauder
and International Shoppes
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Goals: Ensure Sell through of products
Benefits: Shared costs
Roles:
International Shoppes:
Internal support structure
Estee Lauder:
External Support Structure
Definition of Resources: wages, commission
base, merchandising tools, store design,
product
In conclusion….
We never want to lose by a nose, only
win by a mile!