贝恩Bain-零售行业分析课件.ppt
32页
bcCompiler:Reviewer:Retail Co.Created: August 26, 1999Copyright© 1998 Bain & Company, Inc. Seva RozanovThomas Shannon1RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit•Background•Approach•Conclusion•Implementation•ResultsAgendaAgenda2RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit• Retail Co is $10+B “speciality retail” conglomerate whose financial Retail Co is $10+B “speciality retail” conglomerate whose financial performance has deteriorated since 1990performance has deteriorated since 1990BackgroundBackground3RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit•Achieve top quartile performance-market/book value: 2.8x-return on equity: 17-18%-annual earnings growth: 10-12%•Divest businesses that are poor fits•Prepare the company to weather challenging industry conditions•Create a compelling vision and growth strategyFinancial ObjectivesFinancial ObjectivesStrategic ObjectivesStrategic ObjectivesBackgroundBackgroundRetail Co ObjectivesRetail Co Objectives4RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitAgendaAgenda•Background•Approach•Conclusion•Implementation•Results5RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit•Define the characteristics of a successful strategy •Develop a range of viable strategic alternatives•Assess and prioritise the strategic alternatives•Build consensus around the preferred strategy•Fully quantify the impact of appropriate action steps•Gain final approval•Launch implementationApproachApproach6RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitComponents of Successful StrategyComponents of Successful StrategyDoable:Doable:•Evolves from current business mix•Fits Retail Co’s core competencies•Is fundable•Develops significant competitive advantages•Capitalizes on the volatility of retail cyclesUnderstandable:Understandable:•Communicates a clear and compelling approach to the business•Will be fully valued by analysts and shareholdersDesirable:Desirable:•Creates clear economic value and top-quartile financial results–builds a portfolio of high-potential businesses–makes business units more valuable to Retail Co than to others•Avoid excessive layers, overheads, and decision processes•Is attractive to key managers in targeted businesses and functionsApproachApproach7RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit• •Market size•Market growth•Segment returns•Segment profitability trends•Competitive intensity•Supplier power•Segment stabilityMarket AttractivenessMarket Attractiveness•Market share•Market share trend•Geographic coverage•Current profitability/EVA•Earnings trend•Management team•Retail brand equity•Infrastructure and systems•Customer value propositionStrategic PositionStrategic Position•Corporate experience, skills, and values•Corporate functional support•Corporate portfolio development•Cross-divisional sharingFitFitRetail Co businesses were evaluated along three groups Retail Co businesses were evaluated along three groups of criteriaof criteriaApproachApproachRevising the Mix of BusinessesRevising the Mix of Businesses8RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitFact BaseFact Base•How structurally attractive is this market segment? (projected)–industry size–industry growth–industry profitability–competitive intensity–buyer concentration/power–supplier concentration/power–committed capital requirements–stage in market evolution–acquisition opportunities•How does the stock market value this segment?–industry volatility–market valuation multiple and timing–value transparency to stock market•Do we have a strong position today?–market share (local/regional)–market share growth trends–profitability–relative cost position–brand equity–condition of assets•Do we have the key success factors to achieve a strong position tomorrow? (or can we acquire/build them)–functional process capabilities–cost structure–new product/concept development–human resources/people skills–capital resources•How does this business fit with other Retail Co divisions and capabilities?–cash flow generations/requirements–common functional processes–common customer profiles–linkage to central resources–unique people skillsThe five questions approach was used to build fact base The five questions approach was used to build fact base on every business of Retail Coon every business of Retail CoApproachApproach9RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitAgendaAgenda•Background•Approach•Conclusion•Implementation•Results10RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitBusiness Unit Evaluations (1 of 2)Business Unit Evaluations (1 of 2) DivisionDivisionConclusionConclusionStrategic Strategic PositionPositionMarket Market AttractivenessAttractivenessFitFitNorth•Large market ready for consolidation, good profitability, very strong positionHolland•Large potential market with opportunity to boost growth and profitability through acquisitions and improved operating efficiencyItaly•Rapidly growing channel with high returns. Need to invest to capture market share and improve operating efficiencyHong Kong•Large overall market with slow growth. Cash provider capable of funding growth businessesLuxembourg•Reevaluate growth plans. Economies of scale not yet achieved but segment extremely profitableConclusionConclusion11RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitBusiness Unit Evaluations (2 of 2)Business Unit Evaluations (2 of 2) Britain•Moderate size segment with good profitability but strong competition; declining market share, low relative operating marginsIreland•Declining market segment, poor position, little opportunity for sale, potential for savings by folding into Hong KongFrance•Overcapacity in segment, losing market share, below average profitabilitySweden•Large overall market but requires substantial investment to develop new products and achieve scale to improve cost position; business has poor fit with Retail Co skillsSpain•Small segment, low growth, high volatility, and seasonalityDivisionDivisionConclusionConclusionStrategic Strategic PositionPositionMarket Market AttractivenessAttractivenessFitFitConclusionConclusion12RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitBusiness Unit RecommendationsBusiness Unit Recommendations DivisionDivisionStrategic Strategic PositionPositionMarket Market AttractivenessAttractivenessFitFitGrowGrow(Spin Off)(Spin Off)North*HollandItalyHong KongLuxembourgHoldHold Britain DivestDivest Ireland France Sweden Spain *SpinOffConclusionConclusion13RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitStrategic AlternativesStrategic Alternatives Long-term Long-term vision:vision:Corporate Corporate profile:profile:•The leader in selected business lines–chain drug–apparel–footwear–home–toys•Business line competencies•Cost and experience sharing in the groups•Acquisitions to achieve business line dominance•Group-based organisation•A balanced portfolio of speciality retailers•Resource allocation competencies•Lean corporate structure•Decentralised management•Grow and keep successful businesses. Divest the unsuccessful•A leading developer of targeted growth-stage retailers•Selection and expansion competencies•Corporate expertise in critical growth functions–business development (R&D and research)–real estate–systems–logistics•Cost and experience sharing in key activities across all businesses•Acquire and grow promising concepts. Divest when value-added peaksConclusionConclusionGroup SpecialistRetail ConglomeratesGrowth-stage greenhouse (Retail Co. “Classic”)14RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit•Revise the mix of businesses in the portfolio-allow North to pursue an independent strategy-sell France, Spain and Sweden at the right price and time•Ensure remaining businesses address the most important strategic issues-establish clear strategies for growth businesses (Holland, Luxembourg, Hong Kong, Italy)-finalise turnaround plans for businesses which can't be sold at reasonable prices-take write-offs as required•Consider acquisitions•Reduce corporate expenses•Add value to the businesses in the portfolio-build R&D capabilities-leverage costs-upgrade the organisationConclusionConclusionAction RecommendationsAction Recommendations15RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit•Chain drug industry is consolidating–economies of scale in systems investments–relationships with third-party payers•An independent North generates significantly more shareholder value as it participates in the evolution of the industry•North makes minimal use of corporate functions; there is little cost-sharing among North and the other divisions•Market timing is attractive•North's value is not being fully recognized in the marketplaceConclusionConclusionExample: Rationale For an Independent NorthExample: Rationale For an Independent North16RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit•Planned capacity additions will result in industry-wide negative comp store sales through 1998•Consolidation is essential to eliminate excess capacity–lowers costs–allows comp store sales growth•Retail Co is better suited to be a seller than a buyer–synergy is equal whether France chooses to acquire or be acquired–leading competitor's market value is higher–management group at France has several significant holesConclusionConclusionExample: Rationale for the Sale of FranceExample: Rationale for the Sale of France17RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit•Continue to pursue opportunities to consolidate and reduce over-capacity•Fill key executive openings•Restore the historical bargain edge with core customers–increase the mix of opportunistically-purchased goods–deliver values averaging 20% below department store sale prices•Reduce costs to support price reductions–reduce overhead costs by approximately $60MM–reduce investment cost for new stores and remodels•Close unprofitable locations and exit several markets which France cannot dominateIf the sale of France takes longer than anticipated, several actions will If the sale of France takes longer than anticipated, several actions will be taken to improve France's performance:be taken to improve France's performance:ConclusionConclusionExample: France - Strategic ImperativesExample: France - Strategic Imperatives18RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitVision:Vision:•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 reach a 10% share of the national widget retail market by the year 2000Financial Financial Goals:Goals:•To reach and maintain ROIC levels of 20%•To grow sales by 5% per year and net earnings by 10% per year81998 sales objective: $1,225MM81998 net earnings objective: $47MMStrategy Summary (1 of 2)Strategy Summary (1 of 2)ConclusionConclusion19RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitKey ImperativesKey ImperativesInitiativesInitiatives•Develop our new concept, Widget Factory, into the second-largest non-mall based widget retailer•Retail Co Real Estate audit of potential new sites•Widget Factory rapid deployment initiative (opening of 30 new stores per year•Close non-performing stores•Closing of the 10 worst performing mature stores (both XYZ and Widget Factory) each year•Improve margins by changing mix and reducing costs•Mix change based on GMROI approach•Implementation of 4-Walls system•Redesign of logistics flow based on Retail Co study•Improve density of markets by backfillling five markets•Modify our image in the eyes of the customer•Assortment redesign based on demand and profitability•Sales force training initiative on customer service•Launch of a new advertising campaign•Focus new stores in Southern geographies•Acquire and integrate Southern Widget by end of 1996•Retail Co Real Estate audit of potential new sites•Proposed partnership with Southern Malls, Inc.Strategy Summary (2 of 2)Strategy Summary (2 of 2)ConclusionConclusion20RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit•Fit with Retail Co-clear opportunity for value creation-potential to maximize sharing with related divisions•Market attractiveness-substantial market potential-dominant market position opportunity-concept in early stages of a long lifecycle•Financial opportunities-affordable within target capital structure-meets minimum return and growth hurdles•Limited risk factors-existing management talent or supplementable-low to moderate volatilityConclusionConclusionCriteria for AcquisitionCriteria for Acquisition21RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitCorporate Cost Reduction OpportunitiesCorporate Cost Reduction Opportunities *Excluding interestConclusionConclusion22RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit Primary Primary Levers:Levers:Corporate Corporate Roles:Roles:Corporate Corporate portfolio portfolio developmentdevelopment•Keep aware of market and customer trends driving potential opportunities•Develop criteria for screening acquisitions and partnerships or alliances•Identify and evaluate new concepts and consolidation opportunities•Develop a network of deal contacts•Structure, negotiate and close deals•Coordinate effective integration planning•Evaluate opportunities to spin-off/exit businessesFinancial Financial controlscontrols•Define primary measures of financial performance•Set specific financial return and earnings growth targets•Develop financial planning and control systems•Allocate capital and other resourcesBusiness Business oversightoversight•Define management decision-making processes•Coach divisional management–focus managers on measurable results–question assumptions and challenge thinking•Provide leadership on critical issues (e.g., division strategy, value disciplines, and priority and resource conflicts)•Identify opportunities to improve operations and set specific improvement goalsPrimary Levers Available to Add Value (1 of 2)Primary Levers Available to Add Value (1 of 2)ConclusionConclusion23RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit Primary Primary Levers:Levers:Corporate Corporate Roles:Roles:Expertise Expertise sharing and sharing and operational operational improvementimprovement•Instill company wide commitment to spreading best practices–coordinate regular experience sharing at all levels–facilitate communication among divisions and functions•Drive value disciplines to improve operations across all processes, functions and divisions•Provide leadership and expertise to support improvements in performanceManagement Management allocation and allocation and developmentdevelopment•Attract, motivate and retain the best management–recruit top tier candidates–reward based on performance–promote based on ability•Provide strong, profit- related incentives linked to corporate objectives•Rotate managers across functions and divisions•Develop formal training programsStrategyStrategydevelopmentdevelopment•Perform analysis to support strategic decision-making (corporate and divisional)•Define corporate strategic direction•Assess market attractiveness, performance, position and fit of divisions–work with divisions to build high-quality, fact-based strategic plans•Integrate division plans with corporate strategyCentralCentralservicesservices and and infrastructure infrastructure sharingsharing•Provide scale services and functions to achieve lower cost and higher quality•Leverage infrastructure across businessesPrimary Levers Available to Add Value (2 of 2)Primary Levers Available to Add Value (2 of 2)ConclusionConclusion24RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitProjected EarningsProjected Earnings NorthNorthNew Retail CoNew Retail Co*From Monte Carlo analysisNote: Earnings equals net income after taxes and interestConclusionConclusion25RetailCo2 bcRetail CoRetail CoCorporate Strategy Toolkit*With $300MM share repurchaseGap vs. SBP ProjectionsGap vs. SBP ProjectionsGap vs. RealisticGap 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%14.9%($30.2MM)ConclusionConclusionGap AnalysisGap Analysis26RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitAgendaAgenda•Background•Approach•Conclusion•Implementation•Results27RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitCorporate GovernanceCorporate Governance•The decisions of the Board will be evaluated under the traditional business judgement rule standard•The distribution of North should not require shareholder approval–the distribution is a dividend which requires only board approval–AT&T precedent•The potential divestitures should not be considered a sale of substantially all of Retail Co remaining assets–New Retail Co will be a substantial entity with estimated sales of $4.2B, net income of approximately $119, and assets of $2.1BImplementationImplementation28RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitNote: Distribute North stock dividend at appropriate time3Q954Q951Q962Q963Q964Q961997•Approve all components of Strategic Review•Close France transaction•Close Spain transactionlClose Sweden transaction•Reorganize Corporate office•Close loss stores•Close North IPO•Complete merger of Ireland/Hong Kong•Complete MIS and telecommunications outsourcing projects•Pilot centralization of Accounts Payable, General Accounting, and Sales AuditSpin-off North•Initiate merger of Ireland and Hong KongImplementationImplementationTimingTiming29RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitStrategyStrategy•Corporate management•Corporate employees•Division presidents•Division employees•Media•Financial community•Retail industry consultants•Individual shareholders•Landlords•Vendors/factors•Local officials•Initiate all communications from Retail Co headquarters in order to maintain controlled, consistent messages•Fully explain the rationale of the plan and how it will enable Retail Co to take advantage of its unique strengths, skills, and opportunities over the long term•Define a clear strategy and vision for "Classic Retail Co" going forward•Explain how the plan is expected to enhance shareholder value•Assure employees in divisions slated to be spun off or sold that Retail Co will do everything possible to ensure an orderly transition and communicate potential benefits of the plan for these divisions•Initiate direct contact with all landlords who will be affected by store closings on announcement dayTarget AudiencesTarget AudiencesImplementationImplementationCommunications PlanCommunications Plan30RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitAgendaAgenda•Background•Approach•Conclusion•Implementation•Results31RetailCo2 bcRetail CoRetail CoCorporate Strategy ToolkitIncrease in Shareholder ValueIncrease in Shareholder ValueResultsResultsMarket capitalisation has increased by 60% upon the Market capitalisation has increased by 60% upon the implementation of the recommended strategyimplementation of the recommended strategyNote: Excludes over $1 per share (105 MM shares) in dividend payment over the period32RetailCo2 。
