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.XYZ Consulting .Name of case/firm
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How to develop a new area of the Rotterdam Port (Area A) to
The Challenge How to develop a new area of the Rotterdam Port (Area A) to Attract new activities/companies collect sufficient revenue within the “Business Ecosystem” framework
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PESTLE ... PESTLE ... (iSince tech & environment not important to this case)
● Population 50.6 Million Black Africans – 40.2M White Africans – 4.6M Other – 4.6M Target age group: 15-50 ● Economic Fastest growing economies in Africa carry highest macroeconomic risk 8 of top 10 global vehicle makers 3 of world’s largest manufacturers More than 200 automotive component manufacturers ● Social Brand conscious Black: 49% of middle income, higher disposable income, new vehicles, features are important, suspicious Buyer power is rising White: Earn higher income, spend more, less disposable income, used cars, functional is important ● Legal Motor industry development program Automotive production and development program Import duty rates/discounts Most important in red .Less important in black .allows to emphasize – and perhaps not go through every one Analysis slide Keep a running placeholder on ALL slides, to let them know where you are ... See next slide
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(They had moving placeholder, shading the current SWOT topic)
SWOT Analysis – (They had moving placeholder, shading the current SWOT topic) Strengths Worldwide brand awareness Quality yet affordable products Strong growth in the Chinese Market Ranked number two in global sales for sports retailers Weaknesses Inexperienced in e-commerce and social media Weak online presence Weak virtual storefront Opportunities Large target market Growing popularity of online/mobile shopping Threats Transition of traditional in-store shopping to internet shopping Competive Industry with entrenched competitiors Low margins in retail industry Assets: very deep water, hinterland connetions – 350 million consumers, favorable tax climate, balanced industrial cluster, clear regulations Competing modalities: road, rail, inland shipping, coastal shipping, pipeline Analysis Alternatives Recommendation Implementation
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Value Chain General administration Human resource management
Emphasize step that you will exploit or shore up p. 159 Pearce book General administration Human resource management Procurement Inbound logistics Operations Outbound logistics Marketing and sales Service Margin Strength brick-and-mortar Weakness virtual presence Internal Analysis
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Current Marketing Mix – 4-Ps
Product Sporting goods Table tennis balls Treadmills Sports aparel Price Moderately priced “A good bargain” Placement Retail stores 33 in China 400 in 15 countries Online Taobao Decathlon store Promotion Outdoor billboards Local newspapers Flyers Memberships Sporting events Contests Analysis slide Internal Analysis
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. . Analysis slide .
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Porter’s Five Forces ... (p. 94 Pearce ... P. 79 Thompson)
Supplier Power Moderate Moderate imput on price High differentation of inputs High presence of substitute inputs Moderate supplier concentration Buyer Power Threat of Substitution Competitive Rivalry High Many Alternatives Lowcosts of substitutes Moderate feasibility based on geographical location High High price sensitivity High level of company alternatives Low switching costs High buyer volume High impact on quality High High level of Competitors High concentration of competitors High globalization of industry Analysis slide Threat of New Entry Low High cost barrier High cost barrier High brand identity High Government policy External Analysis
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Key Success Factors (106 – Thompson ... 106 Pearce)
Improve Ecosystem Value (niche creation) Critical mass (robustness) Continous Performance Improvement (productivity) Co-evolution or joint learning and optimization effects Keystone Strategy Create value within ecosystem Share the value with other participants in the ecosystem Mission Statement/Core Values To become the most efficient, safe and sustainable port in the world Passion, collaboration, continuous improvement, reliable Attracting New Companies/Worldwide expansion Strengthen the relationships between businesses, governments, and educational institutions Invest in high quality technological knowledge Sufficient Revenue Analysis slide Analyis
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. . . . . Analysis slide .
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. . Analysis slide .
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SWOT Strategies (p. 155 Pearce book)
Opportunities Turn-araound Aggresive Defensive Diversify Weaknesses Strengths Threats Internal / External Analysis .
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Strategic Group Mapping (p. 100 Thompson)
X .. X X X ..
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Product life cycle (p. 326 marketing book)
x Product life cycle (p. 326 marketing book) x x x Early Growth Growth Late Growth Maturity Saturation Decline Introduction
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. . . Internal Positive ● ● ● ● ● ● ● ● . . ● ● ● ● ● ● ● ● .
Analysis slide ● ● ● ● ● ● ● ● .
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BCG – Matrix (Pearce – 264) “Question Marks” Select a few Remainder
divested “Star” ... Invest, invest Dog - Liquidate or Divest “Cash Cow” ... Milked use for “star” and “?” High Market Growth Rate Analysis slide Low Low High Cash Generation (Market Share)
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Construction site for offshore wind turbines Alternative #2
Alternatives (– different # boxes) Alternative #1 Construction site for offshore wind turbines Alternative #2 Storage facility Alternative #3 New energy plant Analysis slide Alternative #4 Lease to outside client Alternative #5 Research & testing facility Alternatives
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. . . . . Analysis slide .
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Construction site for offshore wind turbines
Alternative #1 Construction site for offshore wind turbines Advantages Disadvantages Established market Does little to add to business ecosystem Aligned wth sustainability goals Logistically complicated Close to public areas Analysis slide Alternatives
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. . . Analysis slide .
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. . Analysis slide .
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Alternatives Advantages Disadvantages Alternative #1: Sample
Maintain Normal Course of Business Growing market No increased risk Little to no extra costs Potential missed growth opportunities Potential loss of competitive advantage and market share Current decreased growth rates Alternative #2: Sample Aggressive expansion into intraregional/ international markets In line with company’s goals Increase market share Meet customer demands Harmonized regulations Knowledge of expansion markets High associated costs Higher risk Little strategic implementation time Few low-cost satellite airports in place Negative government relations Alternative #3: Sample Expand intraregional with a strong focus on profit Cost benefits Focus on profits means: -Increase Shareholder Value -Stimulated external investment -Increase capital expenditures -Growth within business operations
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Overview of Alternatives 1-4
Contract Assembly Improve margins - reduces cost of shipping by 25% No major upfront investment Option for companies with low volume Must assemble 50,000 vehicles per annum and export to be eligible for tradeable certificate Import duty for CKD components: 20% 3-months lead time to commence operations 10 day vehicle ordering cycle Build manufacturing facility Standard for setting up own facility is annual sales of 6,000 units with a single brand selling 1,500 Must manufacture 50,000 vehicles per annum and prove content localization to be eligible for tradable certificate Have to maintan high production levels to break even Wait-and-watch Global automotive market has not fully recovered from recession Industry has just recovered from a sharp decline in new-vehicle sales in three consecutive years Import duty for CBUs: 25% Not eligible for tradeable certificate Use South Africa as a hub Individual markets have to be developed over time None of the 54 African countries has a sizeable middle class Political turmoil Exit Strategy Sell assets Divert resources to SsangYong Analysis slide Alternatives
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Manufacturing Facility
***Weighted Competetive Strength Analysis Contract Assembly Manufacturing Facility Wait-and-Watch Re-Export Hub Exit Strategy Key Success Factor Weight Rank Exposure to Risk ,35 3* 1,05 1* 4* 1,4 5 1,75 Financial Feasability ,25 3 ,75 2 ,50 4 1,0 5* Alligned with Mission of Parent Company 1,00 1,25 Competitive Advantage ,10 ,20 ,40 ,30 Presense in South Africa ,05 ,15 1 Total 3,15 2,70 3,20 2,40 3,35 . Ranking Scale 1: The alternative does not effectively address this criterion 2: The alternative may contribute to addressing this criterion 3: The alternative provides an average solution to this criterion 4: The alternative provides an above-average solution to this criterion 5: The alternative effectively addresses this criterion Alternatives
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Decision Gate Approach (develop-step-by-step)
Remain the Same Yes No Online Sales Monsoon as is Amazon Self-made Monsoon Modified Pricing Structure Change
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Recommendation Alternative #5 Exit Strategy Recommendation
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Useful for Financials .
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Financial Projections (examples)
Pro Forma Projections Revenue growth Profit margin Lease expense Operating expenses Tax Benefit Pro Forma Income Statement (in RM millions) Revenue COGS Gross Profit Lease Expense Operating Expenses Pre-Tax Profit Tax Benefit Net Income Analysis slide Pro Forma EBITDAR EBITDAR margin EBITDAR (RM millions)
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Implementation Plan What Who
Develop strategy for transition of resources to SsangYong Board / CEO Develop PR/marketing strategy to mitigate negative brand reputation PR/Marketing Fulfill current obligations in South Africa M&M (SA) Prepare Egyptian facility to accomodate additional demand if necessary Management Create marketing plan to increase sales from other locations Marketing Sell assets Finance / Management Assist displaced workers Human Resources Transition Implementation
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Develop strategy for transition of resources to SsangYong
Implementation Timeline (enough for short-medium-long term) Milestone reviews... P Pearce 1 month 3 months 6 months Develop strategy for transition of resources to SsangYong Develop PR/marketing strategy to mitigate negative brand reputation Fulfill current obligations in South Africa Create marketing plan to increase sales from other locations Prepare Egyptian facility to accomodate additional demand if necessary Sell assets Assist displaced workers Milestone Review Implementation
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Mitigations/Contingency
Risk Probability Mitigation/ Contingency South Africa/Africa market grows faster than expected Low Generate sales through imports from India and Egypt Parent Company does not approve of exit plan Adopt a wait and watch approach Implementation
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Contingency Analysis slide .
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