BUSINESS PLAN 2007 – 2010 Summary for PR agency SMART VALUE FOOD RETAIL
Objective <ul><li>Seize the opportunity provided by the current market conditions and build a “smart-value’ food retail (a...
1. Introduction
History of the project <ul><li>Orientation meetings with international players; Ahold, Tesco, Wegmans, Waitrose (Nov 2006)...
Project Partners / Azbuka Vkusa <ul><li>Born 1968 in Moscow, Mr Vereshagin is graduated from the Moscow State University 9...
2. Project feasibility
Russian Food market / Characteristics <ul><li>The Russian Food Market is extremely attractive due to: </li></ul><ul><ul><l...
Consumer target audience <ul><li>Family or singles </li></ul><ul><li>Gender. Mostly women, making purchases for the member...
Target audience choice / underlying principles <ul><li>I deserve something better than discount  </li></ul><ul><li>I alway...
Key Success Factor of the Smart Value Concept <ul><li>Marketing positioning </li></ul><ul><ul><li>HILO / EDLP  </li></ul><...
3. Management team
Management team / composition principles <ul><li>Strong retail background, emphasis on FMCG retail experience </li></ul><u...
CEO – Luc de Jong Career  Summary Selected Experience Picture <ul><li>CEO of Disco supermarkets in Argentina (No. 2 foodre...
CMO – Gerard Koning Career  Summary Selected Experience Picture <ul><li>Developed new position & design of C1000 4th gener...
COO – John Rombouts Career  Summary Selected Experience Picture <ul><li>Analyse and Repositioning 16 supermarkets & 32 Non...
PMO – Ghislain Vathelot Career  Summary Selected Experience Picture <ul><li>Supply Chain network strategy and business pro...
Best Practices Smart Value <ul><li>We have more than 70 years of European food retail experience (AH, C1000, Makro, Ikea) ...
SUPPLY CHAIN BUYING & MECHANDISING STORE OPERATIONS MARKETING CEO PMO STRUCTURE IT HR REAL ESTATE FINANCE <ul><li>Concept ...
Supply Chain (by Casper Jansen) Visibility - Transparancy - Monitoring - Tracking & Tracing - Document Imaging - PO Manage...
Supply Chain <ul><li>Competitive edge Supply Chain: </li></ul><ul><li>western approach on standards & quality </li></ul><u...
Supply Chain <ul><li>Supply Chain and ICT: </li></ul><ul><li>smart solutions for planning, forecasting and  replenishment ...
IT Strategy CORE MERCHANDISING SYSTEM (Product, Supplier, Store) Advanced forecasting & replenishment Advanced Merchandise...
4. Concept overview & Positioning
 
Format of retail trading Criteria Description Sales Area 1,000-1,500 sqm. Location Sleeping district of more than 10.000 h...
 
 
 
 
 
 
 
 
 
 
 
 
5. Development forecast
Company in FY2010 <ul><li>Opening 1 st  store July 2008 </li></ul><ul><li>National innovator in smart value food retail </...
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Smart Value Summary For Pr

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Smart Value Summary For Pr

  1. 1. BUSINESS PLAN 2007 – 2010 Summary for PR agency SMART VALUE FOOD RETAIL
  2. 2. Objective <ul><li>Seize the opportunity provided by the current market conditions and build a “smart-value’ food retail (a chain of ~35 stores): </li></ul><ul><li>Find additional capital partners necessary for funding a serious Food opportunity: </li></ul><ul><li>Smart Value is not yet known in Russia, but is very successful in Europe; for example C1000 Netherlands, Mercadona Spain. Communicate this to; </li></ul><ul><ul><li>Financial market (sub dued) </li></ul></ul><ul><ul><li>Labor market </li></ul></ul><ul><ul><li>Supplier community </li></ul></ul><ul><ul><li>Future customers (indirectly, this is not advertisement) </li></ul></ul><ul><li>The Company will reach over $300 mln annual sales in 2010 </li></ul><ul><li>The Company will be a very appealing food retail candidate among the retail sector in Russia </li></ul><ul><li>The Company will also attain a strong brand identity and the price/quality leadership position on the market </li></ul>
  3. 3. 1. Introduction
  4. 4. History of the project <ul><li>Orientation meetings with international players; Ahold, Tesco, Wegmans, Waitrose (Nov 2006) </li></ul><ul><li>Evaluation with big consultants McKinsey, BCG, Kurt Salomon associates (Jan-Mar 2007) </li></ul><ul><li>Smart Value proposition spotted in Europe and analyzed for Russian market (May 2007) </li></ul><ul><li>Feasibility study performed by AT Kearney (June- Aug 2007) </li></ul><ul><li>In-depth market quantitative research by AC Nielsen (Aug – Sept 2007) </li></ul><ul><li>Target audience shopping habits study by Focus Plus (Aug – Sept 2007) </li></ul><ul><li>Benchmarks and Financials planning performed (Oct. 2007) </li></ul><ul><li>Project management organization started (Oct. 2007) </li></ul><ul><li>Branding & Design agency started (Oct 2007) </li></ul><ul><li>Building the Management team, IT partners (Nov 2007) </li></ul><ul><li>First store location long rental contract signed (Febr. 2008) </li></ul>
  5. 5. Project Partners / Azbuka Vkusa <ul><li>Born 1968 in Moscow, Mr Vereshagin is graduated from the Moscow State University 91/04, with degree in Mathematics and Management. Mr Vereshagin also has earned an E-MBA of strategic management from IBS Moscow. Mr Vereshagin is a founder of Azbuka Vkusa in 1991, where he has responsibility for finance. Mr Vereshagin is married and has one son. </li></ul>Sergey Vereshagin <ul><li>Born 1968 in Moscow, Mr Koscheenko is graduated from the Moscow institute of foreign languages with degree in teaching. Mr Koscheenko is a founder of Azbuka Vkusa in 1991 where he has responsibility for general management. Mr Koscheenko is married and has three children </li></ul>Maksim Koscheenko <ul><li>Born 1971 in Moscow, Mr Lytkin joined Azbuka Vkusa in 1991, where he has responsibility for IT. Mr Lytkin is married and has one daughter. </li></ul>Oleg Lytkin <ul><li>Born 1967 in Moscow, Mr Trykin is graduated from Moscow institute of Radiotechnic, Electronic & Automatic with degree in Engineering. Mr Trykin joined Azbuka Vkusa in 1991, where he has responsibility for internal audit. Mr Trykin is married and has three children. </li></ul>Oleg Trykin
  6. 6. 2. Project feasibility
  7. 7. Russian Food market / Characteristics <ul><li>The Russian Food Market is extremely attractive due to: </li></ul><ul><ul><li>The size and its growth, estimated at 146 billion U$D in 2006 and estimated to grow CAGR 20% from 2006-2010 overtaking the leading position of Germany by 2010 in Europe (source deutsche bank group) </li></ul></ul><ul><ul><li>The low level of penetration of modern trade (estimated at 60% whereas in developed countries this numbers goes into the 90%’s) and the low amount of selling meters per capita (101 mtrs / capita, and the number of stores per million habitants is the lowest of Europe incl. CEE according to AC Nielsen) </li></ul></ul><ul><ul><li>Limited presence of foreign players and low competitive standards </li></ul></ul><ul><ul><li>The real estate challenges for hypermarkets combined with the low mobility of customers due to very heavy traffic and low car penetration </li></ul></ul>
  8. 8. Consumer target audience <ul><li>Family or singles </li></ul><ul><li>Gender. Mostly women, making purchases for the members of their families </li></ul><ul><li>Middle income: over 1.500 U$ per family per month </li></ul><ul><li>Additional; ‘poor that needs low prices and rich that loves low prices’ </li></ul><ul><li>Frequency of purchases; 2-5 times per week </li></ul><ul><li>Weekly food budget average 50 U$ per person </li></ul>
  9. 9. Target audience choice / underlying principles <ul><li>I deserve something better than discount </li></ul><ul><li>I always find something new to cook that inspires me </li></ul><ul><li>I always find something within my budget </li></ul><ul><li>I always find something that makes me cook better </li></ul><ul><li>I always get the best quality for the lowest price </li></ul><ul><li>The staff in the store is friendly and they know their job </li></ul>
  10. 10. Key Success Factor of the Smart Value Concept <ul><li>Marketing positioning </li></ul><ul><ul><li>HILO / EDLP </li></ul></ul><ul><li>Buying power : </li></ul><ul><ul><li>Sourcing Strategy </li></ul></ul><ul><ul><li>Assortment </li></ul></ul><ul><ul><li>Volume </li></ul></ul><ul><ul><li>Plan growth </li></ul></ul><ul><li>Efficiency : </li></ul><ul><ul><li>No Frill </li></ul></ul><ul><ul><li>Supply Chain </li></ul></ul><ul><ul><li>Productivity (Self service / ISO / HQ main team) </li></ul></ul><ul><li>Value Service : </li></ul><ul><ul><li>People (Hiring / Salaries) </li></ul></ul><ul><ul><li>Assortment </li></ul></ul><ul><ul><li>Freshness </li></ul></ul><ul><li>Promotion </li></ul><ul><li>Average basket </li></ul><ul><li>Experience </li></ul><ul><li>Location </li></ul><ul><ul><li>Expansion </li></ul></ul><ul><ul><li>Location Strategy </li></ul></ul><ul><ul><li>Criteria </li></ul></ul><ul><li>Modern & Efficient : </li></ul><ul><ul><li>m² </li></ul></ul><ul><ul><li>Investment </li></ul></ul><ul><li># Customers / Shoppers </li></ul>
  11. 11. 3. Management team
  12. 12. Management team / composition principles <ul><li>Strong retail background, emphasis on FMCG retail experience </li></ul><ul><li>Mixture of specialized Dutch efficiency and No-Frills with advanced international experience. </li></ul><ul><li>Complementary Food retail careers in mature European markets. </li></ul><ul><li>Access to good network of international food retailers and knowledge </li></ul>
  13. 13. CEO – Luc de Jong Career Summary Selected Experience Picture <ul><li>CEO of Disco supermarkets in Argentina (No. 2 foodretailer in Argentina) during the moving years 2003/2005 when Ahold decided to sell the Latin interest and the business was in need of strategic focus on the new future of Argentina. Early 2005 the sale of Disco became a fact. </li></ul><ul><li>VP Latin support Center (2000/2003) based in Buenos Aires and building a very successful support center realizing sourcing-synergies for all Ahold’s Latin Joint Ventures (food-chains). Amongst all the harmonization and centralization of all private label management for the whole Latin continent. </li></ul><ul><li>Other positions at Ahold implied operational P&L responsibility for an area of AH stores in the eastern part of Holland and commercial responsibility at Etos drugstores when repositioning Etos (300 stores in Netherlands) to family chain. </li></ul><ul><li>Left Ahold in 2005 to join the family owned WE Europe (300 mio EUR sales) as its new CEO focusing on supply chain speed and brand identity. An international expansion program was ignited and the supply chain was made more responsive lowering out of stocks considerably. </li></ul><ul><li>Started in 2007 LUMAG consultancy with focus on international retailing best practices. </li></ul><ul><li>Senior retail executive achieving results and growing the business based on in depth multi disciplinary experience. </li></ul><ul><li>All-round executive with broad hands-on experience and used to managing the P&L through motivating targets and clear controls. (Inspired communicator, people manager, passionate worker) </li></ul><ul><li>Studied business economics in Amsterdam </li></ul>
  14. 14. CMO – Gerard Koning Career Summary Selected Experience Picture <ul><li>Developed new position & design of C1000 4th generation. Led operational steering of pilot stores </li></ul><ul><li>Transformed A&P formula to C1000 formula </li></ul><ul><li>Managed C1000 formula </li></ul><ul><li>Applied category management in stores </li></ul><ul><li>Managed marketing mix, communication and promotion streams </li></ul><ul><li>Organized and managed marketing department </li></ul><ul><li>2003-Today Schuitema NV Marketing Director </li></ul><ul><li>2001-2003 A&P Holding Head of Commercial Management </li></ul><ul><li>1998-2001 Schuitema NV Head of Marketing Development </li></ul><ul><li>1997 Etos / Ahold Commercial Manager </li></ul>
  15. 15. COO – John Rombouts Career Summary Selected Experience Picture <ul><li>Analyse and Repositioning 16 supermarkets & 32 Non Food stores Center Parcs Europe (Belgium, Netherlands, France and Germany): </li></ul><ul><li>By adapting the offer of food retail towards the specific needs of the Center Parcs Guests and in the meantime declining the costs and increasing the productivity. </li></ul><ul><li>Profitability activities Food departments Makro Netherlands; </li></ul><ul><li>As Makro Netherlands became too much a retailer instead of a wholesaler. Rombouts’ role was to create better balance in the concept by declining the “retail” approach & intensify the “wholesaler function”. </li></ul><ul><li>Launching Batavia Stad Factory Outlet Centre; </li></ul><ul><li>Rombouts launched this first Factory Outlet Centre in the Netherlands (65 stores, 5 restaurants, marketing & leisure campaigns, internal and external PR, recruitment tenants, management of operations) In the first (opening) year 1 ½ million customers visited Batavia Stad). </li></ul><ul><li>Mr Rombouts had the opportunity to work in different management positions in many professional retail chains. </li></ul><ul><li>Senior Management experience concerning Food & Beverage, retail, sales, operations, distribution, logistics, Business to Business. </li></ul><ul><li>Experienced in operations within small, mid-sized and large scaled local, European- and global organisations and market leaders. </li></ul><ul><li>This way he became very experienced in different working methods, cultures, branches, target groups and company philosophy's . </li></ul><ul><li>Independent thinker with strong interpersonal skills, proven analytical skills, self-motivating, proactive, results- and target driven, well developed change management- and launching skills. </li></ul>
  16. 16. PMO – Ghislain Vathelot Career Summary Selected Experience Picture <ul><li>Supply Chain network strategy and business process definition from Sourcing to store operations for a fashion retailer start-up company in Russia </li></ul><ul><li>Software selection to support the product development processes, forecasting and replenishment optimisation. </li></ul><ul><li>Centralization project for a leading apparel brand – Logistics and back office function centralization </li></ul><ul><li>Defined the target visual merchandising processes of a leading French hypermarket chain </li></ul><ul><li>Managed a team of consultant to deploy a first CPFR project for a Japanese retailer, with two leading suppliers (one for juice, one for napers) </li></ul><ul><li>Product development cycle acceleration involving sales process to retailers for a Dutch fashion retailer and managed the implementation of a PLM tool in Russia for a leading fashion brand </li></ul><ul><li>Ghislain Vathelot is a partner and founder of Accentis CIS. He can conduct business in Russian, French, English and German. His professional experience is focused on Supply Chain Management, at both strategic as well as operational level with a strong link to IT solutions. </li></ul><ul><li>Before Accentis CIS, Ghislain spent seven years with Kurt Salmon Associates in France, where he headed the fashion practice and the development of business in Russia. </li></ul><ul><li>The projects realized so far have given Ghislain a deep understanding of processes and issues in the following areas of the retail industries: budgeting and financial planning/assortment planning and allocation to stores /forecasting/replenishment </li></ul><ul><li>Among recent projects Ghislain has also help new retailers to establish successfully a retail chain in Russia </li></ul>
  17. 17. Best Practices Smart Value <ul><li>We have more than 70 years of European food retail experience (AH, C1000, Makro, Ikea) + 10 years of consultancy experience (KSA + Modis) </li></ul><ul><li>Best Practices of big European chains will be Russianalized and implemented </li></ul><ul><li>Our network gives access to wide variety of best practices and reliable partners </li></ul><ul><li>We will also build on the experience of the Azbuka Vkusa team </li></ul><ul><li>Western Knowledge, Technologies & culture </li></ul><ul><li>+ </li></ul><ul><li>Azbuka Vkusa (un)succesfull experiences </li></ul><ul><li>= </li></ul><ul><li>Best of both worlds </li></ul>
  18. 18. SUPPLY CHAIN BUYING & MECHANDISING STORE OPERATIONS MARKETING CEO PMO STRUCTURE IT HR REAL ESTATE FINANCE <ul><li>Concept </li></ul><ul><li>Organization </li></ul><ul><li>Process </li></ul><ul><li>KPIs </li></ul><ul><li>IT </li></ul>Projects Operations Projects Operations Projects Operations CUSTOMER SATISFACTION QUALITY STANDARDS PLANNING BUDGET Project Launch Organization - PMO Structure
  19. 19. Supply Chain (by Casper Jansen) Visibility - Transparancy - Monitoring - Tracking & Tracing - Document Imaging - PO Management - Event Mangement - Direct Response Suppliers Port of Origin Global/ regional transport Port of Destination DC Distribution Store Customer driven supply chain requiring high standard of supply chain support in terms of integrated ICT-platform and -applications Vendor Management Container/Truck loading Consolidation Road Sea (Air) Customs clearance Deconsolidation Direct Shop Deliverie s In-/outbound logistics Pre-retail services Reverse logistics Crossdocking Store deliveries Network optimization Innovative store replenishment Goods receiving Shelf filling Inventory control ECR Customization Promotions Smart Value Supply Chain Reverse Logistics
  20. 20. Supply Chain <ul><li>Competitive edge Supply Chain: </li></ul><ul><li>western approach on standards & quality </li></ul><ul><li>night distribution </li></ul><ul><li>swap bodies/city boxes </li></ul><ul><li>rolling containers </li></ul><ul><li>IT & mechanization </li></ul><ul><li>planning & replenishment ‘just on shelve’ </li></ul><ul><li>think & act ‘out of the box’ </li></ul>
  21. 21. Supply Chain <ul><li>Supply Chain and ICT: </li></ul><ul><li>smart solutions for planning, forecasting and replenishment </li></ul><ul><li>order and demand management </li></ul><ul><li>warehouse and transport management </li></ul><ul><li>labor, yard and slotting management </li></ul><ul><li>trade partner and carries management </li></ul><ul><li>reverse logistics management </li></ul>
  22. 22. IT Strategy CORE MERCHANDISING SYSTEM (Product, Supplier, Store) Advanced forecasting & replenishment Advanced Merchandise & Assortment Advanced Price management WMS TMS & Advanced planning STORE FRONT OFFICE (POS) STORE BACK OFFICE DWH FINANCE Other (Web, …) Phase I Phase II or latter/never HR (Payroll) In order to support the operations and the growth of the company, a best-in-class application will be selected to support the retailer operations. A phased implementation approach will be used to initially support basic transactional needs and then support more advanced and more complex operations
  23. 23. 4. Concept overview & Positioning
  24. 25. Format of retail trading Criteria Description Sales Area 1,000-1,500 sqm. Location Sleeping district of more than 10.000 habitants in 500 meters (or 15.000 in 800 meters) Core Principles Combination of aggressive pricing on known food brands with a very modern store experience Product lines Food; Dry Groceries, Perishables self-service and basic non food Price segment Lower-middle Pricing Emphasis on price/quality. Compete with all existing formats on their weaknesses
  25. 38. 5. Development forecast
  26. 39. Company in FY2010 <ul><li>Opening 1 st store July 2008 </li></ul><ul><li>National innovator in smart value food retail </li></ul><ul><li>Retail chain will include ~37 stores in primarily Moscow region </li></ul><ul><li>Sales FY2010 ~$350mln (normalized $580 mln) </li></ul><ul><li>Opportunities for further growth: </li></ul><ul><ul><li>Continue expansion out of own cash flow </li></ul></ul><ul><ul><li>Increase expansion speed ‘filling in the green spot’ </li></ul></ul><ul><ul><li>further expansion of the format outside Moscow into Russia </li></ul></ul><ul><ul><li>growth through acquisitions </li></ul></ul>

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