1. SIMPLIFY profitability Efficiency streamline COST-SAVINGS
Streamline, Efficiency, Cost-Savings, Profitability. All of these words describe the goals of a firm looking to create and sustain profitability. One way to do that is to SIMPLIFY business operations.
streamline
COST-SAVINGS

2. PEPPERFRY.COM: TURNING THE TABLES ON DISRUPTION
Good morning everyone, we are Odette Consulting. Introduce ourselves. And today we would like to share with you our analysis of Pepperfry.com along with a recommendation for how your company can simplify and generate greater profit.
ODETTE CONSULTING: Brandon Lalonde, Jacob McCourt, Jordan Neposlan, Sahi Veeraraghavan
PRESENTING TO: PEPPERFRY.COM EXECUTIVE TEAM

3. THE CHALLENGE
How can the company increase profitability and what would that profitability look like over the next five years?

4. Agenda Situational Analysis Key Issues Alternatives Recommendation
Financial Overview
Implementation Plan

5. Agenda Situational Analysis Key Issues Alternatives Recommendation
Financial Overview
Implementation Plan

6. SWOT Analysis of Pepperfry.com
Strengths
-Large product variety
-Geographic spread-98% of orders are shipped in less than 48 hours; hub and spoke model
-Physical retail driving high average sales
Weaknesses
-Low profitability
-Very complex business structure-a lot of business units
-Highly reliant on the co-founders of the business
Opportunities
-Expand by opening up physical stores in other major cities
-Promote private label house brands
-Expand operations in Malaysia and China
Threats
-IKEA entering the market
-Highly fragmented business (a lot of suppliers)
SWOT Analysis

7. PEST Analysis of Pepperfry.com
Less regulations compared to North American companies = Ease of foreign investment
Rupee value tied to United States dollar
-Varying cultures in each city in India
-Average Furniture rental = years
-Average Family keeps their Furniture for 30 years
- TV advertising and influencer marketing is very popular
- Use of technology among teenagers is low in rural areas
- Only 20% of the country is online P E S T

8. Porter’s Five Forces Analysis of Pepperfry.com
Some unique items but high competition
Assists business with logistics and other support
High capital bar for entry
Consumers can meet their needs offline or online
Buyer Bargaining Power
HIGH
Threat of New Entrants
LOW-MEDIUM
Threat of Substitution
Supplier Bargaining Power
LOW
Competitive Rivalry
HIGH
Large number of competitors (i.e. Walmart and IKEA)

9. Agenda Situational Analysis Key Issues Alternatives Recommendation
Financial Overview
Implementation Plan

10. Key Issues Current Issues Future Risks
New Revenue Channels are lacking
Competitors will explore untapped markets for growth
Decreasing Profitability
Do not reach profitability goals and the business is liquidated and/or sold
Degree of Competition
Competitors may expand into the market and cause limited growth
Need for Innovation
If the company does not innovate with new products or programs, they remain stagnant
Main Take-away: The firm must find new revenue channels to remain profitable. Competitor entry risk must be mitigated.

11. Key Issues Future Risks Risk Avoidance Plan
Competitors will explore untapped markets for growth
Explore new revenue streams but avoid more complexity
Do not reach profitability goals and the business is liquidated and/or sold
Simplify business operations
Competitors may expand into the market and cause limited growth
Solidify profitability plan and then expand
If the company does not innovate with new products or programs, they remain stagnant
Continue to monitor and look for new opportunities
Main Take-away: The firm must mitigate risks by simplifying the business and monitoring profitable growth opportunities.

12. Agenda Situational Analysis Key Issues Alternatives Recommendation
Financial Overview
Implementation Plan

13. Alternatives
Alternative #1: Simplify and expand private label house brands strategy
Alternative #2: Simplify and geographically expand physical store location
Alternative #3: Simplify and explore the furniture rental market

14. Alternatives
Decision Criteria
Simplify + Expand House Brands Strategy
Simplify + Expand Physical Stores Geographically
Simplify + Explore Furniture Rental Market
Risk 8 6 4
Complexity
Profitability 5 7
Unique and Innovative
TOTALS 29 23
1-3
4-6
7-10
Data was collected via an independent poll by Odette Consulting

15. Agenda Situational Analysis Key Issues Alternatives Recommendation
Financial Overview
Implementation Plan

16. Making a Decision
Decision Criteria
Simplify + Expand House Brands Strategy
Simplify + Expand Physical Stores Geographically
Simplify + Explore Furniture Rental Market
Risk 8 6 4
Complexity
Profitability 5 7
Unique and Innovative
TOTALS 29 23
1-3
4-6
7-10
Data was collected via an independent poll by Odette Consulting

17. Simplify Operations and Expand House Brands Strategy
Recommendation
Create simpler operations
Increase profitability
Simplify Operations and Expand House Brands Strategy

18. Agenda Situational Analysis Key Issues Alternatives Recommendation
Financial Overview
Implementation Plan

19. Assumptions Revenue Growth will plateau at 25%
Tax Depreciation and Amortization are not taken into account
Assumptions
We have moved out of the utility industry
Projected Decrease in COGS
Revenue Growth will plateau at 25%

20. Financial Overview INR Millions 2012/13 2013/14 2014/15 2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
Revenue ₹ ₹ ₹
₹ 2,001.00
₹ 2,580.00
₹ 2,838.00
₹ 3,121.80
₹ 3,433.98
₹ 3,777.38
₹ 4,155.12
COGS ₹ ₹
₹ 2,247.00
₹ 4,993.00
₹ 5,066.00
₹ 4,306.10
₹ 4,090.80
₹ 3,886.26
₹ 3,691.94
₹ 3,507.35
Profit/(Loss) ₹ ₹
₹ -1,255.00
₹ -2,992.00
₹ -2,486.00
₹ -1,468.10 ₹ ₹ ₹ ₹
Projected Revenue Growth
10%
Projected Decrease in COGS
15%

21. Financial Overview INR Millions 2012/13 2013/14 2014/15 2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
Revenue ₹ ₹ ₹
₹ 2,001.00
₹ 2,580.00
₹ 3,225.00
₹ 4,031.25
₹ 5,039.06
₹ 6,298.83
₹ 7,873.54
COGS ₹ ₹
₹ 2,247.00
₹ 4,993.00
₹ 5,066.00
₹ 4,306.10
₹ 4,090.80
₹ 3,886.26
₹ 3,691.94
₹ 3,507.35
Profit/(Loss) ₹ ₹
₹ -1,255.00
₹ -2,992.00
₹ -2,486.00
₹ -1,081.10 ₹
₹ 1,152.81
₹ 2,606.89
₹ 4,366.19
Projected Revenue Growth
25%
Projected Decrease in COGS
15%

22. Agenda Situational Analysis Key Issues Alternatives Recommendation
Financial Overview
Implementation Plan

23. Implementation Plan Simplify Rationalize SKU count
Décor – reduce from 70,000 SKU’s to 5,000 SKU’s
Utilities – Stop selling
House Brands
10 brands to 2 brands
Pepperfry (13-tier brand) – sold online and catalogue
Sold to other suppliers
Implement quality assurance model
Process improvement
Return to Profitability and Expand
Continue to rationalize SKU’s
Create targeted marketing campaigns for under-penetrated areas
Seek opportunities to sell second brand into adjacent markets
Evaluate success of house brand strategy
Formulate contingency plans
Explore furniture rental or expand geographically
Create mobile app
Growth and Prepare for I.P.O.
Prepare for Initial Public Offering
Implementation Plan

24. Project Timeline Work with category managers to rationalize SKU's
2018
2019
2020
2021
2022
Work with category managers to rationalize SKU's
Work on new house brands
Launch new house brands
Implement new sourcing strategy
Explore other opportunities for process improvement
Develop new marketing campaigns
Develop new app
Evaluate SKU rationalization process
Launch mobile app
Launch digital COE for digitization
Launch new marketing campaigns around major holidays
Prepare for IPO
IPO

25. Conclusion Issue Recommendation
Lack of new revenue channels to increase profitability
Recommendation
Simplify business operations by expanding house brand strategy

26. We now welcome any questions.
THANK YOU
We now welcome any questions.