Jotun case analysis

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The project led by Doan Quynh Trang to be presented to chief of consultant and Sale director of Jotun Thailand in 2007

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Jotun case analysis

  1. 1. Jotun case analysis Doan Quynh Trang Rattana Soe Alongkorn Heng Atchara
  2. 8. Financial crisis
  3. 9. Divisions Where Who Dekorativ Scandinavia DIY Paints Outside Scandinavia All segments Coatings Scandinavia, Europe, Asia Industrial users, Marine offshore projects Powder coatings Global Industrial users
  4. 10. Dekorativ Coatings Paints Production lines Powder coatings
  5. 11. 80% of Scandinavia market Mainly DIY BLUE! Maintain the leading position Divisions Where Who Dekorativ Scandinavia DIY Paints Outside Scandinavia All segments Coatings Scandinavia, Europe, Asia Industrial users, Marine offshore projects Powder coatings Global Industrial users
  6. 12. Increasing in increasing rate Decorative paint take 69% 69% decorative Divisions Where Who Dekorativ Scandinavia DIY Paints Outside Scandinavia All segments Coatings Scandinavia, Europe, Asia Industrial users, Marine offshore projects Powder coatings Global Industrial users
  7. 13. Marine coatings Divisions Where Who Dekorativ Scandinavia DIY Paints Outside Scandinavia All segments Coatings Scandinavia, Europe, Asia Industrial users, Marine offshore projects Powder coatings Global Industrial users
  8. 14. 64% industrial Divisions Where Who Dekorativ Scandinavia DIY Paints Outside Scandinavia All segments Coatings Scandinavia, Europe, Asia Industrial users, Marine offshore projects Powder coatings Global Industrial users
  9. 16. SWOT - Company <ul><li>STRENGTHS </li></ul><ul><li>Global network with international references </li></ul><ul><li>Good MC and MCI technology </li></ul><ul><li>Modern factory with high capacity </li></ul><ul><li>Good ICT systems </li></ul><ul><li>Well qualified technical service teams </li></ul><ul><li>Good training programs </li></ul><ul><li>Good financial standing </li></ul><ul><li>WEAKNESSES </li></ul><ul><li>Gaps in distribution with low number of MC and MCI dealers </li></ul><ul><li>Poor internal communication </li></ul><ul><li>Inexperienced sales teams and sales managers </li></ul><ul><li>Lack of total product package to compete in medium range markets </li></ul><ul><li>Low brand awareness </li></ul><ul><li>Slow to change and implement </li></ul><ul><li>OPPORTUNITIES </li></ul><ul><li>Property market is growing </li></ul><ul><li>Investments in oil, gas and infrastructure </li></ul><ul><li>Economy is growing and paint consumption per capita is increasing </li></ul><ul><li>Up country markets developing quickly </li></ul><ul><li>Export markets of Cambodia and Laos </li></ul><ul><li>have high growth potential </li></ul><ul><li>THREATS </li></ul><ul><li>Instability in Thailand government </li></ul><ul><li>Strengthening of Baht vs other major currencies </li></ul><ul><li>Price war in market will reduce prices and margins </li></ul><ul><li>Metal and other raw material prices increase further </li></ul><ul><li>Local producers move faster than Jotun </li></ul>
  10. 17. Jotun Thailand
  11. 18. Jotun Thailand
  12. 19. <ul><li>Five main points to be done </li></ul><ul><li>Increase sales up country by driving new MC dealers and greater activity on project sales </li></ul><ul><li>Increase multi color centers in Thailand market to develop the dealer penetration of the market </li></ul><ul><li>Increase sales in Medium range products as we have lost market share in this area </li></ul><ul><li>Improve competences in dealer sales team Coach, train, identify weaknesses and fix/replace </li></ul><ul><li>Reverse trend of lost sales in key dealers </li></ul>
  13. 20. Set tailor made campaigns by product in selective dealer in each region Increase activities on Premium Bases for Jotashield and Majestic Increase activities on Medium Bases for Jotatough, Jotamatt and Jotaprimer Implement deco product incentive in Q3 Extra incentive trip for target in July-Dec 07 Set dealer incentive schemes and rewards by quarter Roll over incentives to reduce year stock up syndrome Plan both sell in and sell out campaigns to move stock to the user Be better than the competition at putting money in dealers pocket Implement new MC package to dealer Drive MC through sales teams Educate Sales teams on how to sell MC concept Keep hunting & specify projects in up country Assign projects by sales rep Follow SMT principle and provide on job coaching by ASM/GSM Drive sales in all areas Build budgets and targets from bottom up Enforce Responsibility, authority and accountability in Branch Offices Monitor by analysis of sales statistics per month Dig into reasons for success and non success Reward efforts Implement loyalty program for painter in every region in conjunction with Deco Project Team Build relations in regions with key painting contractors Focus on bringing value to both dealers and painting contractors Action Plan
  14. 22. Perceived specificity Low cost Mass Niche No niche market as cost and sales trade off Low cost Differentiation Mass Nich Each product line has specification and designation for certain customers
  15. 23. Conglomerate Diversification Similar Different Technology Introducing new products is mainly used Not applicable
  16. 24. Price / Quality Brand Image JBP Beger Jotun Nippon TOA ICI
  17. 26. Serve all demand of customers and reduce cost Service cost reduced Sales get better incentives
  18. 27. Financial analysis <ul><li>7.5% sales increased in 2007 </li></ul><ul><li>Gross Profit Margin 47.7% </li></ul><ul><li>Net profit <10% </li></ul><ul><li>ROA was 12.8% </li></ul><ul><li>ROC (18.4%) </li></ul><ul><li>ROE (13.0%). </li></ul><ul><li>Asset increased 8% </li></ul><ul><li>ROE increased .5% </li></ul><ul><li>High investment but not yet return </li></ul>
  19. 28. Problems <ul><li>2 ERPs at the same time and not link together </li></ul><ul><li>No TVC to save costs </li></ul><ul><li>Push too much pull little </li></ul><ul><li>Internal communication is weak </li></ul><ul><li>Long time to launch new products </li></ul><ul><li>Difficult to open more shops </li></ul><ul><li>Balanced scorecard is imbalanced </li></ul><ul><li>Shops 700 <4000 </li></ul>
  20. 29. Recommendation
  21. 32. Don’t push like this JOTUN Competitors Customers
  22. 33. Pull like this,
  23. 34. Balance scorecard
  24. 35. They don’t talk Outdoor activity to build team
  25. 36. Do TVC at certain level by balancing the IMC Budget Do consumer research to know them
  26. 37. Recommendation <ul><li>Improve ERP and create web service to serve end customers </li></ul><ul><li>TVC to build brand awareness </li></ul><ul><li>Balanced scorecard to address learning and growth perspective and internal business process </li></ul><ul><li>Outdoor activities to improve internal communication </li></ul><ul><li>Should know consumer behavior </li></ul><ul><li>Share commission between old and new shops </li></ul>
  27. 38. Thanks and Questions Pls.

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