KPMG Case Competition 2011

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This is from the Wake Forest preliminary round for the KPMG case competition for 2011. Our group was given roughly 48 hours to read, analyze, and present the case.

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KPMG Case Competition 2011

  1. 1. October 3, 2011<br />KPMG International Case CompetitionRise to the occasion.Push yourself.Go beyond.<br />Nicholas Martino, Chief Consultant<br />Josh Barber, Operations Director<br />Amanda Tarlton, Marketing Analyst<br />Amy Andreasen, Financial Advisor <br />
  2. 2. Agenda<br />
  3. 3. Situational Context<br /><ul><li>Younger generations in Japan do not associate with brand
  4. 4. Counterfeiting, and the lack of regulations regarding the practice, is a concern
  5. 5. Enhance image and reputation without diluting the brand
  6. 6. Counter market stagnation while upholding core values</li></ul>Louis Vuitton in the Japanese Market<br />2007- Expansion strategy results in 250 stores in Japan<br />1977- LV introduced in department stores in Tokyo & Osaka<br />1981- First LV retail store opens in Ginza<br />2010- LV faces need for new growth in Japan<br />2006- Kiyotaka Fujii elected new CEO of LV<br />
  7. 7. Recommendation<br />
  8. 8. Enter the Beauty Industry<br />
  9. 9. Risk-Response Evaluation<br />High production costs<br />Increased revenue<br />Market saturation<br />Create unique product<br />Industry experience<br />Customer loyalty<br />Brand reputation<br />Maintain values<br />
  10. 10. Implementation <br />
  11. 11. Market Entry Strategy<br />Enter the Beauty Industry<br />Makeup<br />Perfume<br />Cologne<br />
  12. 12. Makeup<br />
  13. 13. Makeup<br />
  14. 14. Product Breakdown <br />
  15. 15. Product Timeline<br />Oct. 2011<br />Facility complete<br />Feb. 2012<br />Launch advertising campaign<br />Oct. 2010<br />Start facility construction and R&D<br />Dec. 2011<br />Begin production<br />Aug. 2012<br />Release products in stores<br />Aug. 2013<br />Assess product profitability<br />Research & Development:<br /><ul><li>Finding right raw material mix i.e. high quality inputs</li></ul>Facility<br /><ul><li>$200 million estimated construction cost
  16. 16. Hire plant workers and managers
  17. 17. 10 million unit capacity (based on industry averages)</li></ul>Product Release<br /><ul><li>Direct distribution within Louis Vuitton retail stores
  18. 18. Indirect distribution within high-end department stores</li></li></ul><li>Perfume & Cologne<br />
  19. 19. Product Timeline<br />July 2011<br />Packaging facility complete<br />Sep. 2011<br />Launch advertising campaign<br />Oct. 2010<br />Contract with supplier and begin packaging facility construction<br />Dec. 2011<br />Release products in stores<br />Aug. 2011<br />Begin packaging phase<br />Dec. 2012<br />Assess product profitability<br />Supplier<br /><ul><li>Contracting with highest quality fragrance producer in France
  20. 20. Purchase in excess of 73,000 liters</li></ul>Packaging Facility<br /><ul><li>Package according to customized bottle and box
  21. 21. 1 million unit capacity
  22. 22. $85 million construction cost</li></ul>Product Release<br /><ul><li>Released as an “ice-breaker” product
  23. 23. Indirect & direct distribution</li></li></ul><li>Product Differentiation <br />
  24. 24. Distinguishing Factors<br />
  25. 25. Marketing Strategy <br />
  26. 26. Product Appearance & Display: Makeup<br />Appearance<br /><ul><li>Compact cases embossed with Louis Vuitton logo
  27. 27. Classic color scheme of chocolate brown and gold</li></ul>Display<br /><ul><li>Products displayed on vintage French-inspired vanity
  28. 28. Creates unique buying experience
  29. 29. Aura of sophisticated glamour</li></li></ul><li>Product Appearance & Display: Perfume & Cologne<br />Appearance<br /><ul><li>Perfume - Crystal Victorian-style bottle with vintage spritzer bulb and gold Louis Vuitton logo charm
  30. 30. Cologne- Glass bottle with gold hue and cap embossed with Louis Vuitton logo
  31. 31. Both packaged in velvet lined box with history of the designer</li></ul>Display<br /><ul><li>Vintage velvet-lined armoire that resembles inside of box
  32. 32. Similar to makeup display</li></li></ul><li>Makeup Advertising Campaign<br />
  33. 33. Perfume & Cologne Advertising Campaign<br />
  34. 34. Financial Analysis<br />
  35. 35. Cost Analysis<br />
  36. 36. Revenue by Product <br />
  37. 37. Financial Timeline<br />Dec. 2014<br />Fragrance break-even<br />(@ $ 159,636,363.60)<br />Aug. 2012<br />Begin makeup sales<br />Dec. 2012<br />Year 2 NOI<br />$ 130,738,442.75<br />Oct. 2010<br />Construction costs<br />($285,000,000)<br />Dec. 2012<br />Year 1 NOI<br />$ 87,141,017.81<br />Dec. 2011<br />Begin fragrance sales<br />Aug. 2014<br />Makeup break-even<br />(@ $ 369,194,603.18)<br />
  38. 38. Revenue Projections<br />
  39. 39. Looking Ahead<br />
  40. 40. Future Prospects<br /><ul><li>Introduce in other markets  United States, Europe, India, China
  41. 41. Expand product line to include new fragrances and cosmetics
  42. 42. Grow market share</li></li></ul><li>Summary <br />
  43. 43. Summary <br /><ul><li>Problem:
  44. 44. Regressing growth in Japanese market
  45. 45. Recommendation:
  46. 46. Enter the beauty industry
  47. 47. Makeup, perfume, and cologne
  48. 48. Key points
  49. 49. Expand brand name recognition
  50. 50. Target larger consumer base
  51. 51. Keep up with competitor strategy
  52. 52. Diversify product mix
  53. 53. Enhance position as market leader </li></li></ul><li>Thank youNicholas Martino, Chief Consultant Josh Barber, Operations DirectorAmanda Tarlton, Marketing AnalystAmy Andreasen, Financial Advisor<br />
  54. 54. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.<br />The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International").<br />

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