1. Enterprise Thinking Estee Lauder Travel Retail Hermon Kaur Raju Spring 2008

2. “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

3. Estee Lauder Travel Retail The mission is to “apply and adapt global brand strategies to consumer needs in the Travel Retailing channel of distribution.” 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 Headquarters: Miami, London, and Singapore Offers 20 of the 26 brands to the traveling public 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 Provides a convenient shopping alternative for our existing customers while introducing our brands to new consumers Characterized by 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

5. The Aim of Enterprise Thinking… Moving forward by doing things  Better  Faster  Cheaper

6. Applying 4 key Initiatives Redefining Redefining Managing Projects Managing Projects Alliances Alliances Time Management Time Management

7. 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.

8. Step 1. Challenge Statement Step 1. Challenge Statement Challenge: Challenge: International Shoppes’s net sales do not reflect its retail sales growth. International Shoppes’s net sales do not reflect its retail sales growth.

11. Test the Statement through 6 Criteria 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

12. The Challenge In Depth…. 1 st quarter retail sales: 966K 1 st quarter retail sales: 966K 1 st Quarter Net sales: 300K, 420K retail value 1 st Quarter Net sales: 300K, 420K retail value Essential items are always out of stock Essential items are always out of stock There is no 6 month inventory There is no 6 month inventory We should be at net 580 K, so increase sales 100% We should be at net 580 K, so increase sales 100%

13. 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

14. Step 3: What Would it Take? What would it take for International Shoppes to order 100% more stock in FY 2009? What would it take for International Shoppes to order 100% more stock in FY 2009?

15. What I Need to Know: Retail Sales Retail Sales Net Sales Net Sales Net vs. Retail for other brands Net vs. Retail for other brands Stock levels Stock levels Relationship Issues Relationship Issues Backorders Backorders

16. Step 4: Scan the Surface for Solutions (Put on Different Hats) Higher Retail Sales Initiatives: Introduce a Spiff program, Monthly GWP promotions Higher Retail Sales Initiatives: Introduce a Spiff program, Monthly GWP promotions Clinique minimum order requirements Clinique minimum order requirements Checking warehouse stock levels weekly Checking warehouse stock levels weekly Renegotiate stock levels- order more travel sets Renegotiate stock levels- order more travel sets HPPS with assigned goals HPPS with assigned goals Reducing backorders on a corporate level to ensure we have stock on shelf Reducing backorders on a corporate level to ensure we have stock on shelf Enlarge warehouse Enlarge warehouse Analyzing retail sales Analyzing retail sales Check to see if mins and maxs are set correctly Check to see if mins and maxs are set correctly Increase counter space Increase counter space Scrutinize sales recording system Scrutinize sales recording system Scrutinize Inventory Analysis Scrutinize Inventory Analysis Rework personal sales strategy Rework personal sales strategy

17. Redefine Solutions.. Measure each prospective solution against a list of qualifiers to narrow the list of possibilities to the BEST option. Measure each prospective solution against a list of qualifiers to narrow the list of possibilities to the BEST option. Resources required (time, staff hours, money, etc.) Resources required (time, staff hours, money, etc.) Potential impact Potential impact Strategic fit/core competency Strategic fit/core competency Market conditions Market conditions Time to implement Time to implement

18. Step 5: Redefining produced the following solutions: Adjust Min and Max Adjust Min and Max Renegotiate stock levels by increasing travel sets Renegotiate stock levels by increasing travel sets Eliminate backorders corporately Eliminate backorders corporately Reworking Personal Sales Strategy Reworking Personal Sales Strategy Renegotiate stock levels- increase travel sets Adjust Min and Max Rework Personal Sales Strategy

19. Step 5 and 6: Test Solutions Small and Large Scale Small Scale Testing : Small Scale Testing :  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

20. Managing Projects Prioritizing Selected Projects Prioritizing Selected Projects

21. Putting Projects First Based on R0I Project Project Time Time Impact Impact R0I $ R0I $ Money Invested Priority Selected Generic Staff Training 50 hrs 50 hrs 80 80 $20 K $20 K$5,000 3 Event Strategy 16 hrs 16 hrs 75 75 $45K $45K$7000 2 Online picture database 20 hrs 20 hrs 20 20$1K$50 5 Online Focus Forum 6 hrs 6 hrs 30 30$50K$0 4 Assortment Updates 30 hrs 30 hrs 65 65$100K$0 1

22. The Right Number of Projects Project Bank HermonEduardoAnnamariaEduardoAnnamariaHermon You can only do two projects at a time and assist other people occasionally with their two projects Dealing with two projects at one moment usually results in an 80% efficiency

23. Time Management Institute time management approach with to do lists the day before Institute time management approach with to do lists the day before 2 projects at a given moment 2 projects at a given moment Focus on priority projects Focus on priority projects Our job as managers is to think strategically and develop systems and procedures Our job as managers is to think strategically and develop systems and procedures

24. CPM Chart Activity Immediately Prec Time (days) A. Receive Plannograms None 7 B. Order Visuals A 2 C. Create Assortment A 2 D. Order Open Service A 2 E. Order Testers BCD 3 F. Merchandising Date BCD 3 G. SOH Clinique EF 3 H. SOH Estee Lauder EF 3 I. SOH Aramis EF 3 J. Arrange Security Clearance GHI 3 K. Schedule BAS to work GHI 3 L. Confirm open service GHIJK 3 M. Confirm all visuals GHIJK 3 N. Confirm all testers GHIJK 3 O. Buy misc. elements LMN 1 P. Confirm with Shop Fitter 0 3 Q. Store Merchandising P 3

25. Critical Path Method- New Installations F H M P L I G J K D B A E N Q O C ES: 0 EF: 7 ES: 7 EF: 9 ES: 9 EF: 12 ES: 12 EF:15 ES: 15 EF: 18 ES: 15 EF: 16ES:9 EF: 12 ES: 12 EF: 15 ES: 16 EF: 19 ES: 19 EF: 22

26. Alliances  Optimize resources and strategies  Through Alliances seek new ventures and opportunities

27. Alliance Requirements Clear understanding of goals of each party Clear understanding of goals of each party (e.g., student recruitment for each school) Benefits to each party (e.g., shared costs, expanded reach, etc.) Benefits to each party (e.g., shared costs, expanded reach, etc.) Clear definition of roles of all parties Clear definition of roles of all parties Definition of resources expended by each party Definition of resources expended by each party

28. 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 Affiliate Various Terms Low Resources

29. Joint Venture: Estee Lauder and International Shoppes  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

30. In conclusion…. We never want to lose by a nose, only win by a mile!