The Merchants Category: Number of different industries. Macro-eco: Important to mention those factors Individual/Industries: Other impact the different.

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Presentation transcript:

The Merchants Category: Number of different industries. Macro-eco: Important to mention those factors Individual/Industries: Other impact the different industries. - Just include it in the different factors how to relate Company: What’s most important – convincesly Chose a geografic area or country. – as long as we can tell /ague for why we chose.. Mec Group 2: Alex S. Chemali, Amalie Rasmussen, Mads Vangsgaard, Sofie Reland & Sandra Beenfeldt-Hansen Mak Group 8: Mie, Neele, Monika, Irina

Uniqueness for the Category Buy products from a supplier to sell them Constantly seeking for best deals Lower their own costs = cheaper prices/products for customers Long-term & trustful relationship to customer and suppliers Strong business acumen (streamlined) Creating value across borders How do we excel? Danish corporation has mastered business plan & management style that functions internationally/ globally. Examples for Industries/Companies: Fashion Clothing Bestseller 10.000 stores in 38 countries H&M IC Group a/s Zara Tourism NOVOSOL Energy Danske Commodities Home furniture JYSK Acumen → the ability to make good judgements and take quick decisions Generally about Merchant category: Some of the factors for the category The Merchants is buying products from a supplier to sell them to customers. The Merchant is always seeking for the best deals from the suppliers - so they can lower their own costs and at the same time offer cheaper prices/products for the customers. As well this means they are creating a long-term and trustful relationship to the customer and suppliers. They are strong business acumen people - so they are good at making judgements and making quick decisions. They are creating value across borders by delivering the same concepts and products at roughly the same price. In addition what makes danish merchants excel within their industries are their ability to maintain and practice their retail approach, value chain approach, and supply chain approach across borders. Danish merchant companies who succeed internationally usually have a strong founder who has adopted business acumen into their guiding principles of their business. The business acumen should be practiced by all employees. Good business acumen is not just about buying cheap and selling with a sizable markup, it is more about product innovation, service provisions and physical presence in growing markets.

How Denmark Excels in the Home Furniture Industry Having a strong brand (Scandinavian design) Innovative products Create value for customers Meeting customers needs Delivering products at a perceived fair price Having economies of scale Good relationships with suppliers Vertical integration (both backwards and forwards)

Home Furniture industry in Indonesia! Opportunities Middle class growing Property growth Home Furnishing industry growing (12% in 2013) Storage furniture fastest growth LED bulbs increasing Free trade - ASEAN, Japan, Switzerland, proposed to US Threats Other home furniture stores entering the market Nationalism: Law investment change in May 2014 Trade activities → ASEAN CEPA Indonesia and EU GDP (if economy operates good or not) Trade activitites Financial Opportunities: Indonesia has a growing middle class where they account for 32% of the population (74 million ppl) - the growth in economy and rising disposable income. The growth in property in Indonesia is increasing where apartment buildings are expanding due to lack of land. With the rise in household income there is a demand for housing and home furnishing. Home furnishing has a healthy and consistent value of 5% CARG in Indonesia where with the increasing property, home furnishing is a strong industry to remain in based on the forecast to 2018. Smaller home furnishings such as bed sheets, bath textiles is more frequently brought as these are at a lower price point therefore more people are able to afford these items and larger home furnishings are not a high replacement purchase. Due to smaller compact apartment buildings the need for storage furniture in particular plastic storage has the fastest growth at 7% CAGR, where these are affordable and durable to consumers. An opportunity for the home furnishing industry is the fast growth in LED bulbs where the value is at 12% value CARG. The percent of LED growth is 150% from 2008 and is set to reach 25% of the total value sales in light soures by 2018. Indonesia has free trade in place with ASEAN, Japan, Switzerland and proposed to have a free trade agreement in US. This means any manufacturers in these countries will be less cost for the company in regards to goods tax etc. Threats: Home furniture stores entering the market such as Ikea has an impact on the market share. Nationalism: In May 2014 the Indonesian government changed the law in regards to foreign investment where they have barred investment in retail stores that sell electronics, footwear, textiles, toys and food. With the free trade within ASEAN, Japan and Switzerland this can put pressure on trade with other countries http://www.reuters.com/article/2014/05/14/indonesia-economy-investment-idUSL3N0NV3L920140514

Indonesia Economic Climate Average monthly salary in Indonesia: 8,400 kr Monthly disposable income: 2,380 kr Exchange rate is stable over a 10 year period GDP is stable slightly increasing Employment rate is down, GDP is up - economy is expanding exchange rate is stable good environment for investors (Rupiah not gonna drop suddenly!) Economy expanding - investment in the country is increasing which creates job + people spend more money. (Unemployment rate going down as well!) = more disposable income

The Fashion and Apparel Industry One of the world’s largest consumer goods markets Danish fashion is third biggest export industry in Denmark Biggest markets: Germany (25 %) , Sweden and Norway 600 brands (1200 brands before crisis) Total export in 2012 : 22.697 mio DKK Total turnover in 2012 : 38.299 mio DKK Export growth with 8 % in 2014 ( with 2 % in 2013) Overview over 5 biggest companies within fashion and apparel industry

How Denmark Excels in the Fashion Industry Characteristics of the clothes of danish fashion industry is: Chic and trendy yet affordable Footsteps begins in the 1950th at the copenhagen fashion week Focus på design, development, sales, distribution and service Good combination of quality and price Difficult for new players to enter the industry Overview over 5 biggest companies within fashion and apparel industry

Threats and Opportunities Fashion risk (brands are heavily influenced by fashion trends/change in collections) Business cycles of the countries they export to Big competition between companies Opportunities: Online sales Business development in emerging markets CEPA - http://en.wikipedia.org/wiki/Indonesia%E2%80%93European_Union_trade_relations#Free_Trade_Agreement.2FCEPA

Fashion and Apparel Industry in Japan Population: 127 millions Reason: There is a great demand for Malene Birger and the others brands Total import of clothing: 2,6 billion Yen (2011) High GDP: 4,92 billion USD (2013)

Thanks for your awesome attention!

Group 2: Alex S. Chemali, Amalie Rasmussen, Mads Vangsgaard, Hi, we are JYSK! Concept: We want to be cheap. Group 2: Alex S. Chemali, Amalie Rasmussen, Mads Vangsgaard, Sofie Reland & Sandra Beenfeldt-Hansen

Competitive Advantages Strong history/ brand and royal supplier Opened first store in DK in 1979 by Lars Larsen Jysk has a manual of their processes that are followed when they are developing or penetrating in the market. 2200 stores worldwide - 37 countries 419 suppliers in China (2 in Indonesia) → so close to Indonesia Wide assortment Economies of scale Competitive prices Effective supply chain - using local suppliers

Growth Strategies Main growth strategies: Market development strategy - Geographic expansion to new market and offering existing products Market penetration strategy - entering a new market their strategy then shifts to the in order to gain a greater market share in these markets. Related diversification - buys up shares in ILVA, Unrelated/Conglomerate diversification - investing in “Travel Rejser” Why is Jysk a Merchant? Jysk is an International retail company that is known as a leading merchant in the Danish market. Jysk has over 500 suppliers and are located in 37 countries, 19,000 employees. Opened first store in 1979 in Aarhus by Lars Larsen. Jysk Group contains of Jysk Nordic and Danishes Bettenlager and Franchises (Greenland, Faeroisland, island, Canada, Leatvia, Indonesia, What growth strategies are Jysk currently using: Jysk is currently not using the product development strategy, as they are focusing on conquering new markets with their current product portfolio, which is called market development strategy. One of Jysk’s main growth strategies is geographic expansion to new markets by implementing the market development strategy. When they have entered a new market their strategy then shifts to the market penetration strategy in order to gain a greater market share in these markets. Jysk tried to use unrelated diversification or the conglomerate growth strategy, by expanding into the traveling industry with their brand “Larsen’s rejser”, which went bankrupt and was subsequently bought by the swiss company “Kuoni”. They still use this growth strategy but to a lesser extent than the related diversification strategy. Some of the current unrelated diversified companies are “Letz Sushi”, “Backtee”, “Eovendo”, “Garia”, “Ferdinand” and “Himmerland”. A lot of these stores are managed separately. Jysk uses both backwards and forwards vertical integration, as they own “Scancom” and “Interstil” who supply goods to the jysk stores. They utilize forward vertical integration by having DOS. In some countries they have outsourced or franchised some of their Jysk stores. Their growth strategies are based on the desire to conquer market share from Ikea which is the market leader and their main competitor. Jysk realized that it would be best for them to use the related diversification growth strategy, and they own many different retail merchants such as, Idemøbler, Ilva, Bolia, Jysk Acquired Danish bed company Seng Specialisten in 2014 which is a market development strategy to take a larger share in the bed industry in Denmark.

Export Knowledge Jysk has been in the export game since 1984 Jysk now operates in 37 countries These experiences have given jysk extensive knowledge about these countries and it has also given Jysk a template of what factors a company needs to look into before opening a store in a given country Jysk has extensive export knowledge as they have been expanding outside of Denmark since 1984. Today Jysk operates in 37 countries all around the world.

Jysk Indonesia comparison to DK Comparison between Denmark and Indonesia prices Denmark / Indonesia Bedlinen 250 / 195 DKK Bedlinen 229 / 180 DKK Matras 1,499 /1,325 DKK Average monthly income Denmark / Indonesia 27,000 / 8,400 DKK Disposable monthly income Denmark / Indonesia 17,500 / 2,380 DKK

Recommendations in Indonesia market Product Development: Plastic storage containers specifically for apartment organisation Supplier or develop own brand in LED bulbs Market Penetration Increase stores in Indonesia Market Development: Going into other Asian countries

IC GROUP A/S BRAND PORTFOLIO SIZE OF OPERATIONS Revenue of DKK 2.6b and approx. 1,000 employees DISTRIBUTION CHANNELS Wholesale, e-commerce, own retail, franchise and outlets

Growth strategy Merger & Acquisitions Divestment 2001 Merger between InWear Group A/S and Carli Gry International A/S forms IC Companys A/S. 2002 Acquisition of the brand Saint Tropez. 2003 Joint venture with the brand Malene Birger. Acquisition of the brand Tiger of Sweden. 2013 The brands Jackpot and Cottonfield are divested. 2014 The four brands InWear, Matinique, Part Two and Soaked in Luxury are divested. Core business Non-core business - Market penetration - Market penetration - Market development - Divestment - No acquisition plans, vertical integration plans

Competitive advantages Multi-branding strategy Outsourcing Top competitors: Bestseller A/S Friis Co. Signal Clothing A/S DK Company A/S

Export Knowledge more than 4,300 distributors in more than 25 countries group's total turnover is 80% outside Denmark main markets are concentrated mostly in the countries of Northern Europe, primarily Scandinavia, Benelux countries, the UK and Germany most earnings comes from Nordic countries only 6 % of earnings comes outside Europe

Future growth strategies Market penetration Market development Verical integration

Sources http://www.business.dk/detailhandel/ic-companys-ser-muligheder-i-asien http://www.thaigarment.org/Report/050555/THE%20JAPANES%20APPAREL%20MARKET%20AND%20IMPORTS%202012.pdf http://borsen.dk/nyheder/virksomheder/artikel/1/279721/ic_companys_saelger_fra_igen_-_rival_overtager_maerker.html

Thank you for your attention

things to look into Thursday: buying so much get cheaper in indo taxes investors - exchange rate how many in city? Who buys? Average salary Smart phone (merchants docs) increasing - customers attend to come back 485 suppliers (500+) 419 in China

Sources uhttp://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm%3A12-129295 u http://www.nationalbanken.dk/da/statistik/valutakurs/Sider/Default.aspx http://politiken.dk/oekonomi/virksomheder/ECE2201940/dyne-larsen-tager-konkurrencen-op-med-ikea/ http://www.lowyinterpreter.org/post/2014/02/19/Meet-Indonesias-middle-class.aspx?COLLCC=3027266224& http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-129295 http://www.worldometers.info/world-population/indonesia-population/ http://www.oxfordbusinessgroup.com/overview/taking-it-next-level-purchasing-power-and-consumer-spending-are-rise http://www.salaryexplorer.com/salary-survey.php?loc=101&loctype=1 http://cekindo.com/rupiah-exchange-rate-volatile-indonesian-economy-stability-early-2014.html The merchant presentation: The merchant category: How Denmark excels at that: Threats: Opportunities: growing middle class, more people are moving into the urban areas, Jysk presentation: Short introduction: Competitive advantages: Growth strategies: Export knowledge: Descriptive economics: