Paradox

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Paradox

  1. 1. Russia: development of new horizons<br />
  2. 2. A bit about the developers<br />Catherine Chudinova<br />The motivator and analyst<br />ArtemKozhemyakin<br />Macro, tech, design<br />E-mail: ekaterinachude@gmail.com<br />ParaDoX<br />E-mail:xenus.t@gmail.com<br />Maria Zhalova<br />The translator and corrector<br />Ivan Lashin<br />The analyst of creative tasks<br />E-mail:zhalovamaria@rambler.ru<br />E-mail:myerto@mail.ru<br />Special thanks to National Research University Higher Scholl of Economics.<br />
  3. 3. STRUCTURE<br />Geographical interpretation<br />Some macro values and prime analyses<br />Problem of functional doubling and marketing analysis<br />Concerning the structure it looks<br />Management economy and chain updates<br />Influence on market<br />Project team and it plans<br />
  4. 4. Russia - key in the expansion of the eastern market<br /><ul><li>Priority status: 5 year growth plan
  5. 5. Increased capabilities in Moscow
  6. 6. Step-up in marketing investment
  7. 7. Reorganize to efficiency
  8. 8. Maximize local marketing</li></li></ul><li>Structure of sales regions in Russia and CIS Food & HPС, 2009<br />West: <br /><ul><li> the most sales volume
  9. 9. the biggest number of retail outlets
  10. 10. the place for retail andkey accounts clients management
  11. 11. enterprises – international importers
  12. 12. the ruling top</li></ul> 43%<br />Moscow<br />27%<br />29%<br />East:<br /><ul><li> big length of the region
  13. 13. the key region in the Uniliver’s strategy of expansion to the eastern countries
  14. 14. remoteness from the management centre</li></ul>Samara<br />South:<br /><ul><li> low competition on the market
  15. 15. high percent ofcompany’s sales
  16. 16. consist of two parts: season market and permanent market
  17. 17. low transports costs
  18. 18. high percent of year growth</li></ul>Novosibirsk<br />
  19. 19. Dependency between Russian gdp and fmcg market volume<br />
  20. 20. Dependency between Russian gdp and fmcg market volume<br />FMCG<br />market volume<br />GDP<br />r=0,997*<br />* Pearson's product-moment coefficient between Russian GDP and FMCG market volume. Data: 2000-2007 in the prices of 2000.<br />
  21. 21. Russian FMCG market growth forecast<br />IMF forecast<br />“Paradox” forecast<br />Average growth: 16% per year<br />
  22. 22. Russian FMCG market growth forecast<br />5 years <br />growth forecast<br />210% <br />(𝟏+𝟎,𝟏𝟔) 𝟓=𝟐,𝟏<br /> <br />
  23. 23. In the enemy camp<br />2008 – restructuring Russian production companies- start of east export politics <br />2008 - restructuring businesses in Russia, buying minority stakes in companies - sales growth of 4-5%<br />2009 – restructuring sales – local management improvement – market share growth 2-3%<br />
  24. 24. BUT…<br />To achieve 210% growth after 5 years<br />You Need to Remain Competitive <br />
  25. 25. UnileverRUSSIAReforms or rebirth?<br />
  26. 26. UnileverRUSSIAReforms or rebirth?<br />Compromise:Rebirth through Reforms<br />
  27. 27. Rebirth through ReformsHow is it possible?<br />The new structure is formed without taking the old one into account<br /><ul><li>Aspiration to maximal efficiency
  28. 28. Lack of affection for the old schemes</li></ul>Analysis of current structure.Clearance of inefficient and useless units <br /><ul><li>Current structure is optimized as if there is a process of smooth reforming
  29. 29. Structure becomes facile and flexible</li></ul>Determination of necessary steps for the full transition from the old structure to the new one<br />
  30. 30. The chain of command<br />Top level<br />National sales director (Field Manager)<br />Regional Sales manager West Food<br />Regional level<br />Territory level<br />Regional center<br />
  31. 31. The chain of command<br />Top level<br />National sales director (Field Manager)<br />Regional Sales manager West Food<br />Regional level<br />Problem of functional doubling and centralization of marketing decisions<br />Why is it dangerous?<br />Territory level<br />Regional center<br />
  32. 32. Problem of functional doubling is:<br />About 10 “different functional”sales managers at the regional level( Food and HPC)<br /><ul><li> Congestion of managerial staff
  33. 33. Increasing costs on personnel wages
  34. 34. Degradation of documents circulation and data exchange
  35. 35. Inefficient use of highly productive human resources
  36. 36. Lack of system’s dynamics and flexibility
  37. 37. Barriers to company’s expansion on the market</li></ul>Lim {utility} -> 0 per each new person<br />Congestion with unnecessary instances<br />Redundancy of regional problems solved at the territory level prevents from concentrating on real local problems<br />Difficultieswith localization of marketing programs under conditions of severe competition between different regions <br />Growth of doubling in case of market’s expansion<br />
  38. 38. About 10 “different functional”sales managers at the regional level( Food and HPC)<br />In other words<br /><ul><li> Congestion of managerial staff
  39. 39. Increasing costs on personnel wages
  40. 40. Degradation of documents circulation and data exchange
  41. 41. Inefficient use of highly productive human resources
  42. 42. Lack of system’s dynamics and flexibility
  43. 43. Barriers to company’s expansion on the market</li></ul>Lim {utility} -> 0 per each new person<br />Congestion with unnecessary instances<br />Redundancy of regional problems solved at the territory level prevents from concentrating on real local problems<br />Difficultieswith localization of marketing programs under conditions of severe competition between different regions <br />Growth of doubling in case of market’s expansion<br />
  44. 44. Problem of marketing centralization is:<br />Inefficient distribution of marketing budget, poor local strategic planning, MACRO view at regional marketing<br /><ul><li> Weak power of territory and regional promotion managers
  45. 45. Lack of direct relations between marketing departments of different levels
  46. 46. Inflexible system of good’s localization
  47. 47. Geographic distraction of key managers in the regions</li></ul>Poor data exchange, data loss, needs of lower levels are not taken into account<br />Inflexible marketing system and poor data exchange conflict with:<br />A) Promotion of Russia (Moscow) as a key point in east market expansion *<br />B) Uniliver ‘s international policy of good’s localization<br />The lack of real representation in some of the managers about local problems entrusted to them in the region<br />*International program“Uniliver Local Roots” <br />
  48. 48. Concerning the structure it looks :<br />Reorganization at theField Sales level<br />Territory level<br />From 80 000 to120 000 rub.<br />From 78 000 to 112 000 rub.<br />from 50 000 to 89 000 rub.<br />Base units<br />Marketing cosulting Volgograd<br />Reports to: Territory Sales Manager<br />Department / unit: Territory Sales Manager,TerritoryN<br />Responsibilities and tasks: control and adaptation of sales programs and conceptions, relations with local retailers,registration of the market conditions at the territory level<br />Interrelation: Regional Marketing Department, Channel Development and Modern Trade Account<br />From 90 000 to 15 000 rub.<br />Local<br />Adaptation Manager ( LAM)<br />Why is this replacement necessary?<br />There is a small effort at the territory level but multifunctionality is necessary<br />Flexibility of decentralization programs is guaranteed<br />Does the work of 3 units<br />Controls the situation, has advantages of “close relation with the market”<br />Replacement is justified by the successful experience of such international companies asNestle,P&G, KraftFood , etc.<br />Economy <br />from 118 000 <br />to 206 000 rub.<br />Information about wages - http://www.headhunter.com/<br />
  49. 49. Concerning the structure it looks :<br />Reorganization at theField Sales level<br />Regional level<br />Regional Sales manager<br />Uniliver usually works with the major retailers and retail chains,that is why transactions are mostly closed in the Moscow head office – KEY ACCOUNTS CLIENTS<br />Direct relation<br />Сustomer Marketing Directors ( Food& HRC)<br /> – Customer Marketing Executive ( Regional) – <br /> Local Adaptation Managers<br />Information about the major retailers working with Unilever look up at the Attachment<br />Flexible promotion<br />Corresponds with the international Unilever’s program of local market’s adaptation<br />From 111 000 to130 000 rub.<br />From 108 000 to 127 000 rub.<br />Trade connections specialist<br />Economy <br />from 76 000 <br />to88000 rub.<br />From 143 000 to 168 500 rub.<br />Why is this replacement necessary?<br />Peculiarities of development of RussianFMCG market requires not only traditional European modern trade relationships but also work with traditional markets – striking example is theeast region<br />Positioning of Uniliver Russian as a junction of cluster for company’s expansion to the east market needs the consolidation of sales on both directions<br />Reports to: Regional Sales Manager<br />Department / unit : Regional Sales Department,Territory N<br />Responsibilities and tasks :manages the development of the key clients: international, local (including chains), outlets in the all cities of current region<br />Interrelation :Territory Sales Managers,Regional Sales Managers, Key Account Department<br />Information about wages - http://www.headhunter.com/<br />
  50. 50. Management economy<br />Before<br />50% <br />50% <br />Food& HPC<br />Food<br />HPC<br />manager<br />manager<br />manager<br />After<br />60 %<br />Wage economy = 40%!<br />
  51. 51. Concerning the structure it looks :<br />At the top level management reorganization of Field Sales means integration ofFood & HPC departments.However, marketing departments should be left divided.<br />Top level<br />Customer Development Regional Council<br />Same<br />Same<br />Same<br />Regional Sales Manager (Food)<br />Regional Sales Manager (HPC)<br />
  52. 52. Concerning economy it looks:<br />15 TSM<br />+<br />5 TCS+<br />27 MTE<br />+<br />3 DS<br />+<br />52 SCSS<br />+<br />63 CSS<br />+<br />16 CDAE<br />=<br />11318333rub./month <br />6 RSM<br />+<br />30 TSM<br />+<br />5 MTAE+<br />59 MTE<br />+<br />6 DS<br />+<br />82 SCSS<br />+<br />100 CSS<br />+<br />32 CDAE<br />=<br />20928333rub./month <br />Wage Economy – 9 mln.<br /> rubbles in a month<br />
  53. 53. The chain of command - ManagmeNt UPDATE<br />Top level <br />Customer Development Regional Council<br />Same<br />Same<br />Same<br />Regional Sales Manager (Food)<br />Regional Sales Manager (HPC)<br />Regional Sales manager<br />Regional level<br />Trade connections specialist<br />Territory level<br />Local<br />Adaptation Manager ( LAM)<br />
  54. 54. Influence on demand<br />More active marketing policy <br />more consumers want to buy a brand <br />sales growth<br />Faster distribution <br />consumer always can find the good in the store <br />brand become more popular sales growth<br />The effect of known changes people can see, how company deal with workers, notice the company brand in the mass media <br />sales growth<br />
  55. 55. Influence on supply<br />More complicated stuff <br />no posts, where people doing the same work <br />costs degree <br />prime cost decrease<br /> sales growth<br />Geographical position <br />regional centres located in same regions <br />logistic costs degree<br /> prime cost decrease<br /> sales growth<br />More powerful medium management <br />local management make local decisions <br />company need less top managers <br />costs degree<br />prime cost decrease<br /> sales growth<br />
  56. 56. <ul><li>Representatives of all the company’s departments</li></ul>Customer Development Department<br />Supply Chain Department<br />Strategic Brand Development Department<br />Brand Building Department<br />HR Department<br />Finance and IT Department<br />Legal Department<br />PR Department<br />Supply Chain Department<br />Corporate Affairs Department<br />Foodsolutions Department<br /><ul><li>Representatives of key clients
  57. 57. Psychologists
  58. 58. Invitees from BRIC&CIS countries 5 potential markets experts</li></ul>Project realization Team<br />Directions leaders<br />11 specialists<br />5 key clients representatives <br />optional<br />21 different and engaged specialists <br />
  59. 59. Using principles of International Uniliver Talent manager program <br /><ul><li>Local VS consultants</li></ul> 11 locals managers + 5 foreign experts<br /><ul><li>Nationality</li></ul>Russia - great opportunities to multicultural view<br /><ul><li>Gender differentiation</li></ul>10 women – 11 men<br /><ul><li>Internal vs. external</li></ul>11 internal – 10 external<br />Project team’s working plan<br />2 month,team forming<br />01.01.2011-01.03.2011<br />01.03.11- 01.07.11<br />01.11.12- 01.12.12<br />West, head<br />01.07.11- 01.12.11<br />01.04.12- 01.11.12<br />South<br />East<br />Less than 3 years<br />01.01.12- 01.04.12<br />CIS<br />
  60. 60. 01.03.11- 01.07.11<br />01.07.11- 01.12.11<br />01.01.12- 01.04.12<br />01.04.12- 01.11.12<br />
  61. 61. Thank you for attention!<br />

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