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GERMANOS GROUP OF COMPANIES April 2003 1. Business Segments Retain 26% 3.6% 4%-5% growth Strong growth in prepaid cards 30% mshare“Toshiba”Wholesale Expand.

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Presentation on theme: "GERMANOS GROUP OF COMPANIES April 2003 1. Business Segments Retain 26% 3.6% 4%-5% growth Strong growth in prepaid cards 30% mshare“Toshiba”Wholesale Expand."— Presentation transcript:

1 GERMANOS GROUP OF COMPANIES April 2003 1

2 Business Segments Retain 26% 3.6% 4%-5% growth Strong growth in prepaid cards 30% mshare“Toshiba”Wholesale Expand 4.5% 7.4% Replacement cycle (3-5yr) Oligopoly “ Sunlight”Industrial 66% 89% % of Sales % of Gross Profit Cellular Penetration Key Drivers Expand 60% of net adds 65% Top of Mind awareness “Germanos ”Retail Strategic Direction PositionBrand

3 1980 Foundation First Germanos Outlet (Athens-Greece) selling batteries was founded. Foundation 1990 1991 The first franchise outlet was founded Sunlight factory Acquisition of Factory producing batteries and autonomous energy solutions Sunlight factory Acquisition of Factory producing batteries and autonomous energy solutions 1994 Mobile Telephony Mobile Telephony in Greece. Germanos was among the first retailers. Mobile Telephony Mobile Telephony in Greece. Germanos was among the first retailers. 1999 2000 International Expansion Retail Activities started in 3 Countries International Expansion Retail Activities started in 3 Countries I.P.O.I.P.O. 2001 Expansion in Poland 1 Shop 50 100 200 450 BulgariaBulgaria RomaniaRomania CyprusCyprus PolandPoland GreeceGreece History 2002 Expansion in FYR Macedonia MacedoniaMacedonia

4 Historical Performance

5 Other Achievements Financial Times – 2001 List of top 500 European companies at delivering results

6 POWER ON Germanos Retail Network

7 Connecting the consumer with technology Vision We focus on our personnel to implement our philosophy (Skills, Knowledge, Training). A consumer should always find a solution entering a Germanos Shop

8 Telesystems Cordless Phones Simple Phones Accessories (Original & Own) Telefax Machines Consumables Answering Machines Service In-store level 2 Authorized Service for handsets Service for cordless phones Service for batteries Small appliances service Accessories Hands-Free Batteries; Chargers; Cases / Fascial Microdigital Personal Audio Digital Image Calculators (simple/scient) PDAs Laptops Games Mobile Telephony Post-paid connections Pre-paid connections Pre-paid Packs Recharging Cards Handsets Internet Connections Renewals Fixed Telephony Connections ISDN lines - other lines Other Product & Services Mix

9 International Presence Germanos outlets present Outlets Currently Operating 28515446412018

10 Target Target within 2003… …700 stores in Greece and abroad

11 Greece – The results… Stores today: 285 Company operated: 25 Franchise operated: 260 MOBILE TELEPHONY è 35% m. share in new subscribers è 40% m. share in mobile terminals è 60% m. share in cellular accessories è 70% m. share in handset repairs OTHER PRODUCT CATEGORIES è 30% market share in cordless phones market è 15% market share in fax terminals market è 80% market share in specialized batteries market è 15% market share in Video Games Cooperation with 3 operators: Telestet Cosmote Vodafone

12 Greece – The results… More than 6,000,000 customers annually; Outstanding consumer awareness in mobile telephony:  Top of Mind awareness 65%(2 nd choice: 11%)  Spontaneous awareness85%(2 nd choice: 50%) Most likely source of purchase of a new mobile phone:  Germanos: 50%  All operators together:23%  Germanos customers loyalty:88% - 90% Where would consumers go for handset repair?  Germanos:51%  All operators together:22%  Manufacturer:10% National Country Coverage All prefectures are covered;All prefectures are covered; All cities above 10,000 inhabitants are covered;All cities above 10,000 inhabitants are covered; Each outlet covers ~ 35.000 people.Each outlet covers ~ 35.000 people.

13 Poland Stores today: 120 Company operated: 55 Cooperation with 1 operator: ERA GSM Comments: Operations started in February 2001 via acquisition of a local chain (Eko-Contel Poland - a chain with 54 outlets - was acquired) Second acquisition in November 2001 (TCM Poland - a chain with 40 outlets - was acquired) Already the biggest retailer in the country. Country Information: Population:39 mil Penetration of Mobile Telephony:35 %

14 Romania Stores today: 64 Company operated: 58 Franchise 6 Performance: Market leader (10% share of new post paid connections) MOBILE TELEPHONY è 36% top of mind awareness (January 2002) è 1 st independent dealer to cooperate with Connex and another operator Cooperation with 2 operators: Connex CosmoRom Comments: Germanos Telecom Romania founded in 2000 Country Information: Population:23 mil Penetration of Mobile Telephony:22%

15 Bulgaria Stores today: 44 Company operated: 33 Franchise operated: 11 Performance: The biggest independent retailer MOBILE TELEPHONY 17% current market share in connections (leading position among independent dealers) 26% top of mind awareness 98% total awareness Cooperation with 1 operator: Globul Comments: Germanos Telecom Bulgaria founded in 2000 Cooperation with local operator started in September 2001 Country Information: Population:8.2 mil Penetration of Mobile Telephony:28%

16 Cyprus Stores today: 18 Company operated: 18 Comments: Operations started in 1999, via a joint-venture agreement with a local company; Infotel is the country distributor of Motorola and Epson Cooperation with 1 Operator (Only 1 operator in the country) Performance Indicators: Market Share - Handsets:28% Consumer Survey:  Top of Mind Awareness:50%  Consumer Awareness of Germanos Outlets:96%  Intention to buy handset from Germanos:49% Country Information: Population:700.000 Penetration of Mobile Telephony:60%

17 FyroM Store Evolution - FyroM 14 2 2 0 5 10 15 20 200020012002 Stores today: 15 Company operated: 15 Under Negotiation for Cooperation with one or two operators: Mobimak OTE Comments: Germanos operating company founded in Mar 2002 Already 14 stores in operation Market leader in mobile handset sales

18 International Expansion Criteria for Entering a Market Low Penetration of Mobile Telephony Low Penetration of Mobile Telephony Low Barriers to Entry Low Barriers to Entry Expansion Operational Plan Expansion Operational Plan Delta Force Team for the establishment period Delta Force Team for the establishment period Development of local Personnel Development of local Personnel Matrix Organization supports on going training Matrix Organization supports on going training Consistent Strategy Applied to all Countries

19 Country Selection Criteria  Operators Attitude (2 or more operators)  Geographic Proximity  Market size - population  Mobile telephony penetration - future projections  Politico-Economical Landscape  Distributors / Retailers Landscape (no dominant Retailer)  Scope for market leadership strategy  Distributors remuneration schemes  Investment and Entry Costs Decision Procedure: Evaluation Alternative Tactics Feasibility Study Decision Implementation Penetration Tactics: Green Field Joint Venture Acquisition Master Franchise

20 International Expansion STRATEGY Mass purchasing 4. Increase Margins and Returns: Renegotiation of terms Franchising 3. Expansion: Advertising 2. Building the brand: Educating local management Own stores 1. Learning period:

21 Transfer of Know-How Business Concept Store format Product mix Marketing principles Methods Values Adjust model though to the local conditions

22 Transfer of Know-How Organizational Elements The organization is built on the patterns of mother company Common values/methods - Strong local decision making Development of local personnel Re-allocation of mother company staff Successful staff are initially re-allocated in new companies Central Support Team Responsible for continuous knowledge transfer and communication Marketing, Product Mgnt, Service, Logistics, IT, Finance/accounting, Procurement Know-How documentation Manuals produced - updated Training Transfer of Best Practices and Key Learnings

23 How you transfer Franchise Issues to consider Time to adopt model to local conditions Time to build the brand Flexibility of individual businessman (franchisee) Penetration of franchise as concept Level of local business maturity and entrepreneurial attitude Investment level per franchisee vs GDP

24 Germanos Core Values Knowledge Trust Friendliness Service EXPERTISE How do you transfer values ? How do you achieve common Culture?

25 Some Tips for Success 1. We are No 1, We act like No1 2. Lean and Thin Back Office 3. Few people highly qualified, highly paid upon performance 4. Performance = achievement of objectives 5. Invest time and effort in Front Office (stores) 6. Aggressive and consistent action plan to support high sales 7. Aim over achievement, reward over achievement

26 Presentation to Aegean Univerity THINK GLOBAL ACT LOCAL


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