This is a project that I presented in my early years at Lottemart. Data has been reprinted with permission from Zenith Management Consulting

1. 8-1
Value Management
as a Strategy For Global
Competitiveness
2010.12.09
Daedeok Branch
Sung Ung Choi

2. 8-2
1. Challenges and
Value Management
2. Business Strategies of
Value Management
Contents

3. 8-3
■ Challenges
1. Complex Customer Expectations
2. Globalization Challenge
Convenient Location
Basic Expectations
Membership Benefit
NEW EXPECTATIONS
Broad Scope of Goods in stock
High Quality products
Customer Service
Convenient Shopping
Old Challenge
Local Market Targeting
NEW CHALLENGE
Global Culture Mix
Decentralized Management
Homogeneous Culture
Centralized Efficiency
Customer Expectations
at Global Standards
FUTURE
POINT
Case-by-case approach to business problems
→ Store level decision making
→ The “Best Practice” is the “Only Practice”
Low Price
Easy Parking

4. 8-4
■ Challenges
3. Paradigm Shift
Conventional Retailing
Stock – To – Sell Strategy
NEW CONCEPT
→ Customers select stores
based on geological
aspects
→ Customers are patient
→ Little is spent for information
seeking
Flow – And – Sell Strategy
→ Customers shop for
multiple reasons
→ Customers “Need for Speed”
has grown
→ Intensive search for
“Value” products
→ Multiple “Selling Points”
Value
Management
Customers shop for “VALUE”FUTURE
POINT

5. 8-5
0%
20%
40%
60%
80%
100%
Wal-mart Target Avg. Grocercy
Chain
How Well Core Expectations are Met
Convenience Price
Service Quality
Scope
■ Challenges
※ reprint permission from Zenith Management Consulting
Setting the Value Result of Value Management
4. Value Management as a Solution
Future
POINT
• Value Management is managing the business operations to
create a value position within the mind of customers
FUTURE
POINT
Leading
Retailer
Price
Attraction
Low
Price
Image
Customer Producer
Low
Cost

6. 8-6
■ Value Management as a Business Strategy
Expectation Strategy Estimated Benefit
Price
Presentation
• Cheap products on end
and/or island displays
• Exclusive Merchandising
Product
Quality
• PB Defect Management
• Accept high quality
products
• Customer Review
Management
Broad
Scope
• POG on On-line Shop
• Keyword Management
• VMD for VALUE
products
• Price Appeal
• “Only at LotteMart”
Effect
• Learn
quality expectations
• Refund rate
• Cost of Refund
• Accurate Trend
Accuracy
• User Friendly website
• Merchandizing Cost

7. 8-7
■ Value Management as a Business Strategy
Customer
Service
Convenience
• Mediation of B2C
communication via
Web 2.0
• Offline-Order Service
• Selectable Direct Mail /
Message Service
• Shop-It-Yourself
Incentive
• Shopping Cart
Upgrade
• Mobile Store Map App
• Handheld Payment
Devices
• Efficient A/S
registration
• Reduced Customer
Rejection rate of
direct marketing
• SCM at the individual
level
• Bookstore level
Convenience
• Faster Payment
• Reduced Waiting Time
Expectation Strategy Estimated Benefit

8. 8-8
■ Goal of Value Management in Retail
No.1 Retailer in Asia
• Broad scope + Value Products = Ready to Shop
• Fast Purchase + Easy Shopping = Happy Shopping
“Value”
Shopping
• Scope : Merchandise for Every Customer
• Service : Quick and Precise Customized Service
• Quality : Customer-Directed-Quality
• Price : Great Prices At Every Point Of Shopping
• Convenience : Non-Stop shopping
Value
Management