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Dennis Ooi




                                1




 ABC CO
 Becoming the Growth Champion
 Dennis Ooi
Dennis Ooi




                                                2



             Agenda:

             1   Industry Trends

             2   Analysis of ABC CO

             3   Becoming the Growth Champion
Dennis Ooi




                                   3




             1   Industry Trends
Dennis Ooi



Major Industry Trends
                                                                                                                              4



                 Distribution        Customer Preference                  Flooring Fashion            Globalisation

             Independent Specialty     Home decorating on
  From              Stores            purchase of new house
                                                                            Narrow Range           Horizontal Integration


                                     Redecorating, Remodeling,                                     Backward and Forward
  To               Big Box              Home improvement
                                                                         Wide Range + Exotic            Integration




                    Growth            Key Success Factors               Social Responsibility      International Import


  From       Narrow Product Lines     Quality, Style, Services              Helping People             Filling scarcity


                                                                        Reclaiming and recycling   Chinese players becoming
  To           Full Product Lines    Co. Size, Technology, Efficiency
                                       => Quality, Style, Services           used products             major competitors
Dennis Ooi



Big Box is gaining control
                                                                                                                       5


Changing nature of the distribution channels     Laminate Flooring -
                                                  Distribution Channel Trends
   Flooring sales have shifted from specialty    by Retail Outlet
    stores to large home center
   The relationships between manufacturers
    and distributors/retailers have been
    strained by the emergence of home center
   Some are challenged to fill up factories,
    must take on high volume/low margin
    business in the home center channel
   The retailers are extracting more value
    from the value chain than manufacturers
   Within 10 years, the number of
    independent floor covering stores in the US
    will decrease to 6,000 from current 12,000
      (Source: Floor Covering Institute blog)     Source: Pfleiderer’s Corporate Presentation, Floor Covering Weekly
                                                  Research, Uniboard Market Intelligence
Dennis Ooi



Changing Customer Preference
                                                                                                           6

                  •   more interest due to popular redecorating, remodeling, and home improvement
                      television programs
                  •   partnerships for branding, labeling, and merchandising are important to the
       Home           industry
     Decorating   •   cooperative advertising programs often cross promote flooring products


                  •   floorcovering shopper is more informed and sophisticated and willing to pay for
                      quality but have higher expectations with a fashions and design focus
                  •   customers want a choice of color and design and many are demanding
       Mass           personalization in their flooring
   Customization •    offer customers a unique product



                  •   home centers now account for 35% of all retail flooring sales and many of their
                      customers seek cash and carry solutions.
   Home Centers •     In new home construction, carpet is losing the dining and living rooms to hardwood
Dennis Ooi



Flooring Fashion = + Exotic
                                                                                                                                 7


    Design Driven                    Raw Beauty                   Simplicity                 Colour Spectrum




  Mannington’s Earth’s Elements   Tigerwood from Johnson   Pinnacle’s Country Classics       Combine Shaw carpet with
                                                                                             Anderson hardwood,
                                                                                             creating a value proposition



                                                                                                  Finish Line

  Sino-Maple’s tile design        Welimade Bamboo          Mannington’s Earth’s Elements




                                                                                              Mullican’s Castillian Collection

                                  Home Legends             Anderson’s Tropical Reflections
  Armstrong unique parquet
Dennis Ooi



Globalization: large players cornering the market
                                                                                                                                                                                 8


                                                > Strong foreign                                                                  > Challenging to develop export markets




                                                                           Mobility and Entry Barriers to
                          Mobility Advantages
   Large Manufacturers’




                                                                                                            Small Manufacturers
                                                  presence (e.g                                                                   > Weak transportation links undermine
                                                  Amstrong, Flooring                                                                distribution and frustrate efforts to
                                                  plants: 15 in US and 7                                                            provide consistent delivery and customer
                                                  outside US)                                                                       service
                                                > Seek to gain                                                                    > Face huge investment costs for
                                                  competitive advantage                                                             transportation, warehousing, and other
                                                  by excelling in                                                                   related costs
                                                  responsiveness through
                                                  their distribution                                                              > Advertising costs for building a brand
                                                  networks with strong                                                              related to new products are costly
                                                  transportation links                                                            > Obtaining new downstream accounts can
                                                                                                                                    be difficult due to existing relationships
                                                                                                                                    and exclusive licensing of some products
                          Backward + Forward                                                                                      > Necessity to sell through third party
                              Integration                                                                                           distributors in order to reach the retail
                                                                                                                                    level (margin suffered)
Dennis Ooi


Growth through Acquisition:
expanding product lines and distribution channel
                                                                                                                   9


             Prior to       2001 - 2003            2004 - 2006           2007 - Present
             2000

             Focus on       Acquired Dal-tile      Acquired Unilin –
                                                                         Acquired Columbia Wood Flooring –
             soft surface   – leading ceramic      leading laminate
                                                                         leading wood position
             acquisitions   position               position

                            Opened state-of-
                            the-art laminate       Acquired the
             Focus on
                            manufacturing          north Georgia
             soft surface                                                Acquired Anderson Hardwood Floors
                            facility, first step   operations of the
             acquisitions
                            into hard surface      Dixie Group
                            flooring

                                                   Acquired the
                                                                         Acquired Pergo- Group – becoming fully
                                                   engineered wood
             -              -                                            integrated manufacturer of laminated
                                                   activities of Kunz-
                                                                         flooring
                                                   Group

                                                                         Acquired Elegant Living in China, added
                                                                         approx. 550 outlets
             -              -                      -
                                                                         Acquired Brewster in Australia, added 6
                                                                         warehouses and distribution outlets
Dennis Ooi



Key Success Factors (KSF) : Size
                                                                                                   10


   The Industry Giants are slightly affected by US Subprime mortgage crisis and have
    been holding on very well
                2009 Financial Performance
                                         Sales Growth    Profit / (Loss)    GP Margin
           Up
       stream




                    Armstrong                -18%         $78 Million           22%
                    The Dixie Group          -28%        ($42 Million)          26%     Average
                    Mohawk Industries        -22%         ($6 Million)          23%      24%
                    Pfleiderer               -22%        ($86 Million)          24%
                    Tarkett                  -17%         $86 Million           23%
                    Junckers Ltd             -22%        ($4.3 Million)         25%
                    Kingfisher plc           5%          $577 Million           36%
                    Lowe’s Companies         -2%         $1.8 Billion           35%
       stream




                    Home Depot               -7%         $2.6 Billion           34%
       Down




                    Lumber Liquidators       13%          $27 Million           36%

                                                                                        Combined
         Average 35% and the Sales CAGR (1997 – 2007) was 5.3%, the retailers            Average
           are extracting more value from the value chain than manufacturers              51%
Dennis Ooi



KSF : Technology and Efficiency
                                                                 11


                     Continuing investment
    advanced      data processing   marketing     distribution
  manufacturing     equipment        strategy       systems



                  Increasing ability to compete

  performance         quality         style        service
Dennis Ooi


Technology and Efficiency = KSF
Lumber Liquidators (LL)
                                  12

Strategies applied by one of
the most successful retailers
Dennis Ooi


Social Responsibility, Recycling
and Reverse Supply Chain Logistics
                                                                                      13


  Industry is focusing on recycling as well as reuse

  Reclamation to reduce amount of waste entering landfills

  Reducing the production impact on both air and water resources

  Working with the “big box” retailers to recover post-consumer wastes

  Substitutes for current products that offer sustainability include both bamboo
   and cork flooring

  Each market is different in their environmental concerns (e.g. in Europe, buyers
   are concerned about whether products are made in an environmentally friendly
   manner and want to know if products are made with recycled material or
   through other sustainable processes)
Dennis Ooi



International Imports
                                                                                                                               14

 Chinese manufacturers have become the          US Vinyl Flooring Imports
  number one importer and the main
  competitor of U.S.-based flooring
  manufacturers

 The International Trade Commission has
  confirmed that flooring imports into the
  U.S. are growing more quickly than
  domestic production. This means that
  foreign suppliers are growing their market
  share at the expense of U.S.
  manufacturers.

 The growth of imports has been driven by
                                                 US Wood Flooring Imports
  a shift in preferences toward finished
  flooring (which has a higher labor content),
  exotic species and engineered flooring

 Illegal logging, which is more common in
  other countries, also enhances the price
  advantages of foreign suppliers

 The growth in popularity and acceptance of     Source: Foreign Competition Report for the U.S. Building Products Industry,
  laminate flooring benefits flooring            Jordan, Knauff & Company
  importers
Dennis Ooi



Summary
                                                                                            15



   Continuously increased in           Leading players are
                                                                              • Entry of
   • The size of large,                • Aggressively integrating               low cost
     “leading” intermediate              across businesses, activities,         producers
     customer (big box)                  and geographies                        from
   • Knowledge and
     expectation of end
     customers
                                 +     • Continuously investing in
                                         advanced manufacturing,
                                         data processing equipment,
                                                                          +     China

                                                                              • Over
   • The breath of the
                                         marketing strategy and                 supply in
                                         distribution systems                   the
     product range available
     in the market for the end                                                  market
     customers



                                                    =
                                 Limiting the space for ABC CO growth
                                 based on current business model
 15
Dennis Ooi




                                      16




             2   Analysis of ABC CO
Dennis Ooi



Overall Performance
                                                                                            17


  Post Crisis, ABC CO’s growth rate and GP Margin have been affected by
  both economy-driven and competition-driven issues


             Ekowood’s Average Annual Sales Growth and GP Margin
             50%
             40%
             30%
             20%
                                                                             GP Margin
             10%
              0%
             -10%
             -20%
                                      US Subprime
             -30%                     mortgage crisis
             -40%                                                            Sales Growth
             -50%
                    2004      2005      2006            2007   2008   2009
Dennis Ooi



Bargaining Power
                                                                                                               18

ABC CO is dealing with price sensitive expert buyers who have strong bargaining power, low
brand loyalty, plenty of supply alternatives, and is relying on them to promote its brand



                                                                      • Lionvest Trading (UK) Pte Ltd UK,
                                                                        Wholesaler
                                                                      • Vepal A/S, Italy (Now known as Berti
                                                                        Pavimenti Legno), Producer and
                                                                        Wholesaler
                                                                      • RMK Limited Ireland, Wholesaler
                                                                      • Friedrich Klumpp GmbH, Coating
                                                                        Producer
                                                                      • Maderpark 2000 SL Spain, Distributor

                                                                      • Shaw Industries Inc USA, Producer
                                                                        and Wholesaler
                                                                      • Long Floor Supply Inc USA,
                                                                        Distributor
                                                                      • GP Embelton and Co Ltd Australia,
                                                                        Producer and Distributor
                                                                      • True Grid Flooring Distributors
                                                                        Australia, Producer and Distributor
                                                                      • Takenaka Corporation Japan,
                                                                        Construction Firm

                                                                     Source: 2004 IPO Prospectus
Dennis Ooi



Product and Service Positioning
                                                                                                            19

                      •Retail Price
   Product Features



                      •Log selection system
                      •Production process
                                                                              US
                      •Texture
                      •Grain
                      •Colour
                                                                                   UK
                      •Ease of Maintenance
                      •Hardness                                                         Australia
                      •Natural Decay Resistance
                      •Durable covering
                      •Dimensional stability                                                        Spain
                      •Surface durability
                      •Workability
                      •Ease in finishing
                      •Moisture content
                                                       ABC                                          Italy
                      •Lifetime
                      •UV-protection
                                                                                                China
                      •Convenience of location    Need to determine the positioning
   Service Features




                      •Consistency of supply
                      •Responsiveness             of ABC CO as compared to the           Germany
                      •Species Education          relevant players in various
                      •Floor Caring Education
                      •Installation Services      countries, my resources are       Malaysia
                      •Web Information
                      •Reputation
                                                  insufficient to do so
                      •Variety of options and
                       upgrades offered
                      •Warranties
Dennis Ooi




                                                20




             3   Becoming the Growth Champion
Dennis Ooi



The Theme
                                                                                                            21




      Competing to                                                                       Competing to
       be the Best                                                                        be Unique


                                         Value Innovation
    The worst error in strategy is       1. Industry
    to compete with rivals on the        Forget industry analysis; many constraints are imaginary
    same dimensions
                                         2. Competition
   Source: Professor Michael E. Porter
   Harvard Business School               Forget what competitors are doing, focus on adding value

                                         3. Markets
                                         Go for big blocks of customers; let some customers go

                                         4. Capabilities
                                         Forget current assets; ask “What if we were starting over?”

                                         5. Products
                                         Forget conventional products; figure out what customers need
                                         Source: Blue Ocean Strategy, Kim and Mauborgne, Harvard Business
                                         Review (Jan/Feb, 1997)
Dennis Ooi



Proposed Transformation
                                                                             22
                  From                        To
         Competing to be the Best   Competing to be Unique
                                    + Mobile Showroom and
                                       Franchising




                                                             Progressively
                                    + ABC CO Floorcovering
                                       Institute

                                    + ABC CO Floor Surface
                                       Treatment and Care
                                       Products

 Currently                          + Creative
 Outsourced
                                       Communications
Dennis Ooi



Proposed Transformation
                                                                                      23

                                Find the attractive customers
       Competing to be Unique   • Large, “leading” customers tend to attract the
                                  most competition and be the most demanding

        + Mobile Showroom
                                Grow alternative channels
           and Franchising
                                • Nurture and support alternative channels that
        + ABC CO                  bypass powerful intermediaries or cultivate new
           Floorcovering          customer groups

           Institute
                                Create end user pull
        + ABC CO Floor          • Temper the power of the immediate customer by
           Surface Treatment      appealing directly to the end consumer
           and Care Products
                                Be different, not better
        + Creative
           Communications       • Strategic positioning to increase unique value to
                                  the customer
Dennis Ooi



Find the attractive customers
                                24




                  Out target
                   + M’sia
Dennis Ooi



Find the attractive customers
                                                      25

                                   High net worth
                                 individuals, HNWI
                                (NW> USD 1 million)




                                          Total
                                          467,000
Dennis Ooi



Find the attractive customers
                                                                                                                                                            26

 Population                        Malaysia          China        India          Indonesia           Total        Source: Capgemini and Merrill
                                                                                                                  Lynch Wealth Management, 2009
 Total                             28,250,000 1,338,612,968 1,183,120,000        229,965,000                      Asia Pacific Wealth Report,
                                                                                                                  IMF, Wiki
 HNWI                                  15,364      364,000         84,000             19,000       482,364
 % HNWI                               0.0544% *     0.0272%       0.0071%            0.0083%
 GDP (nominal) per capita               6,897         3,678         1,031              2,329

                                              Note                                                                       Note
Total Population Targeted                      1              482,364      Forex Rate                                     14                       3.2035
% Potential Sales p.a                          2               1.00%
                                                                           Total Sales (RM) per sq. ft.             12 X 14 = 15                    23.48
No of Installation p.a.                    1X2=3                 4,824
Average sq ft                                4                   2,000     Total Gross Profit (RM) per sq. ft.      13 X 14 = 16                    13.34
Total Installation (sq ft)                 3X4=5             9,647,273
                                                                           Total Revenue (RM)                           15 X 5               226,533,943
Industry Average Price                                                     Total Gross Profit (RM)                      16 X 5               128,719,491
Hardwood (USD) per sq. ft.                   6                   4.83
Retail + Manufacturing GP%                   7                   50%
Gross Profit (USD) per sq. ft.             6X7=8                 2.42      Item 2, 4, 9, 10 : based on personal estimation
                                                                           Item 6 and 7: please refer to previous slide page 10 and 12
Installation Services (USD) per sq. ft.         9                2.50      No of HNWI in Malaysia is not available and it is estimated based on 2 times
GP%                                            10                70%     * the HNWI in China (0.0272% X 2 = 0.0544%)
Gross Profit (USD) per sq. ft.            9 X 10 = 11            1.75

Total Sales (USD) per sq. ft.              6 + 9 = 12             7.33
Total Gross Profit (USD) per sq. ft.      8 + 11 = 13             4.17            Expected additional potential revenue p.a.
                                                                                      of RM226 million in the 5th year
Dennis Ooi



Alternative Channel : Mobile Showroom + Franchising
                                                                                                  27

                 Customer Needs           Distinctive Activities
     Consumers like the idea of          • Numerous station near various luxury residential
     shopping for floor covering when      areas
     it’s convenient to them, in their
     own home, with their own            • Hardware & software program for in home
     lighting and décor.                   measurement and quotes

                                         • Perform demo to customers (hardness and
                 Value Proposition
                                           moisture test)
     Shop at home, bringing personal     • Provide education on wood species, floor caring,
     service closer to customer.           and installation method
                                         • Capture information about prospective
             Risk / benefits to ABC CO
                                           customers preferences, lifestyles, flooring
     (+) 3 layers of GP Margin             interests, etc. useful for further dialogue
        (Manufacturing 24%, Retailing
        35%, Installation 50%)
                                                                                 www.ABC CO.com
     (+) If successful, it will be
        another major channel of
        distribution.
     (-) Payback period for the
        investment in trucks (e.g.
        RM1mill for 4 units) maybe
        stretched (>3 yrs)
Dennis Ooi


Create End User Pulls: ABC CO Floorcovering Institute
CPD Seminars
                                                                                                 28

                 Customer Needs           Distinctive Activities
     Architects need to collect CPD      • Installation of Hardwood Flooring (Seminar)
     points annually
                                         • Maintenance and Finishes for Hardwood Flooring
                                           (Seminar)
                 Value Proposition
                                         • Selecting and Specifying the Correct Hardwood
     Seminars (Accredited Core             Floor (Seminar)
     Curriculum)


                                                             Free CPD Seminar
             Risk / benefits to ABC CO                                            Architects
     (+) Establish a network of
       architects who will recommend                                            Recommendation
       our products                               Buy

     (+) Can be used as referral
       system where architects are                        End Users
       allowed to collect CPD points
       for free if they use our           Same concept can be applied to real estate
       products
                                                agents and interior designers
     (-) Unable to recoup the cost of
        conducting the seminar
Dennis Ooi


Create End User Pulls: ABC CO Floorcovering Institute
Certified Floorcovering Installers (CFI)
                                                                                                        29
                       Issues                                        Value Proposition
  • Short supply of quality wood flooring            • ABC CO is the sole certification provider in
    contractors                                        the Asia Pacific region
  • Existing wood flooring contractors often         • Further increasing the professionalism of
    have their own way of doing things                 the wood flooring industry
  • Installers seldom use knee pads, respirators,    • As a education hub to the Asia Pacific
    ear muffs and glasses                              region for training certified floorcovering
  • The many challenges to a high-quality job-         installers
    site-finished floor have translated into good
    business for factory-finished products (e.g.      Distinctive Activities
    laminate, rug and carpet)
  • Low quality installation and sanding spoil the
                                                     • Be the major source of new trainees for the
    image of the products and manufacturers            trade
                                                     • Ultimately development of post high school
                                                       training program(s) in the Asia Pacific region
                  Customer Needs
                                                     • Facilitate Teacher Training
                                                     • Provide Work Experience
  • Consumers have a high expectations for the
                                                     • Part Time Job Options
    finished product and they want a furniture-
                                                     • Post High School Job Options
    grade finish on a wood floor
                                                     • Referral to Formal Training Programs
  • As floors are becoming more of a design
                                                     • Subsidize Materials and Training
    point, specifiers are looking for that edge
    that will make their floor a little different
Dennis Ooi


Create End User Pulls: ABC CO Floorcovering Institute
Certified Floor Covering Installers
                                                                                                        30




                        Groom CFI to be       Customer get         work with the
                         the manager of      used to the high    local government      ABC CO
       Provide job
                        mobile showroom      quality finishing     to make CFI a    monopolizes the
       opportunity
                           or franchise      and professional      compulsory to       market
                             holders               work          protect consumer




                            Risk / Rewards to ABC CO
      (+) Control the downstream and increase end users willingness to pay

      (+) This business model can work effectively in many countries where             www.ABC CO.com

        installers are not professionally train. (e.g. In China, massive
        amounts of wood flooring being produced, but not being installed)

      (-) Grooming a CFI, take about 3 years, the payback period maybe
         stretched
Dennis Ooi


Create End User Pulls: ABC CO Floor Surface Treatment
and Care Products
                                                                                              31


                 Customer Needs           Distinctive Activities
     Consumers want the floor to look    • Direct customer interaction through direct mail,
     good all the time                     telephone, and the Internet
                                         • Delivers the products to customers’ homes
                 Value Proposition
                                         • Send as free gifts to previous customers and ask
     Provide convenience to the            for referral
     customer in caring and
     maintaining the wooden floor


             Risk / benefits to ABC CO
     (+) Consistently remind customer
        of ABC CO brand                                     Floor Care
     (+) Can be used as free gifts for                      Manual
        first time customer or as part
        the referral system
     (-) Minimal
Dennis Ooi



    Create End User Pulls: Creative Communications
                                                                         32

     The Creative Brief

          Get       Targeted segment, staff, community
          Who       visit, buy, own, enjoy, think about ABC CO
          To        have a better perception about the company
          By        delivering a consistent Brand communication
          Thru      testimonials, PR activities, events sponsorship,
                    positioning statement, employer branding, seminars
          While     retaining a message of Diverse, History and
                    Excellence



3
Dennis Ooi



    Create End User Pulls: Creative Communications
                                                                                                  33
     The Creative Brief

          •      Clear and consistent brand image

          •      Uniform styles

          •      In all forms of written and visual communication




                                                          Colours used with online publications




                                                           Logo appearing in most documents
                                  Should black be used?


3
Dennis Ooi



    Create End User Pulls: Creative Communications
                                                                                                                                              34
                                                                                                                            Events
                                                                        Employer
          Testimonials                  PR Activities                                            Seminars                Sponsorships /
                                                                        Branding
                                                                                                                             CSR


       Obtain satisfaction         Contribute newspaper                                  “Techniques for wood          Give out bags
                                    articles discussing              Becoming the         flooring condition             and T-shirts with
         endorsement from                                             authorized
                                    about                                                  assessments”                   ABC CO logo to
         previous customers                                           employer for                                        orphanage
         (written and video)        1) The latest                     Chartered           “Formulating an                homes
                                    installation method               Accountancy          appropriate corporate real
       Creates corporate
         video, showcase all        used by ABC CO                    Training             estate strategy”              Organise and
                                                                                                                          sponsor major
         the previous floor         2) The house price                                    “Planning your future by       sport events like
         installed                                                   Work with
                                    appreciation enjoyed by                                choosing the right             marathon to be
                                    the previous ABC CO               accredited           flooring”                      held in major
       Create past                                                   schools to train
                                    customers                                                                             private colleges
         success stories in                                           floor covering      “How the design of floor
         the form of articles       3) How the design of              experts              covering could affect your    Sponsor major
         / case studies             floor covering could                                   emotion, hence your life”      transplant
                                    affect your emotion,                                                                  surgery
                                    hence your life                                                                       performed by
                                                                                                                          IJN.


         Targeting people looking for new property, and for us to
         collect name card and build the marketing database


3
Dennis Ooi



    Create End User Pulls: Creative Communications
                                                                                                                                        35



             Private                                      Charter Flight                                       Golf / Japanese
                              5Star Hotels                                                   Banks
            Hospitals                                      Companies                                                 Club

                                                                                           Targeting: Credit
           Targeting: High     Targeting: : High            Targeting: High
                                                                                           Card members          Targeting:
           Net Worth           Net Worth                    Net Worth
                                                                                           and Private           Expatriate
           Medical Patients    Individual                   Individual
                                                                                           Banking clients


           ABC CO              ABC CO                        ABC CO                        ABC CO
                                                             newsletter as a               newsletter as a         Special ABC CO
           newsletter as a     newsletter as a                                                                    Magazine in foreign
           reading material    reading material              reading material              reading material           language
           for patient         for hotel guest               at the waiting                at the waiting
                                                             lounge                        area

           Infomercials for    Infomercials for                                                                     Infomercials
           inpatient           entertaining                 Infomercials for               Infomercials           entertainment at
           entertainment       staying in guests            In-Flight                      entertainment at       the waiting area
                                                            entertainment                  the waiting area


                                              Joint funding of campaigns; training and support




3
Dennis Ooi



    Create End User Pulls: Creative Communications
                                                                              36

      The Client’s Brief

         Get       potential, new and old customers
         Who       visit, ask, own, enjoy, think about ABC CO
         To        realise the brand promise
         By        delivering service, recognising, creating convenience,
                   providing information, being helpful
         Thru      Welcome Kit, Loyalty Communications, Prospect
                   Prioritization/Extending the Dialogue, ABC CO Magazine,
                   ABC CO Owner’s Circle, Cross Sell and Up Sell Marketing,
                   Opportunistic “Quick Win” Programs

         While     retaining a message of Diverse, History and Excellence




3
Dennis Ooi



    Create End User Pulls: Creative Communications
                                                                                                                                 37

    Central system of measurement
                                                                                        Create a central system of
                                                                                        measurement to
                                                 Data Access
                                                  & Analysis                               record a broad range of
                                                  Software                                  information on ABC CO
                                                                                            customer
                                                                      Marketing Staff        Campaign, response, and
             Customer
            Transactions
                                                                                                 lifestyle data
                                                                                             >100 appended individual
                                                                                                 and household data points
                                     Marketing                                             monitors communications and
                                     Database
                                                                                            response from prospects and
                                                                    Customer Service
                                                                                            customers
                                                                                             Measurement includes cost
                                                                                                 per response and cost per
                                                                                                 sale
                                                         Appended
                                                          Data &                           view the full shopper-owner
                                                         Modeling                           cycle from first point of contact,
          Inputs from Frontline,
              Phone, Web
                                                                                            through sale and cross sale


                                   Web Site




3
Dennis Ooi



    Create End User Pulls: Creative Communications
                                                                                                                      38

                 Core Communications Program

                      General Goals:                To new product owners,           > 5 years products
                                                            Goals:                     owners. Goals:
                 • Immersion in the ABC           • Increase the repurchase      • Purchase other ABC CO
                   CO Experience                    rate                           products
                 • Promotion of Owner’s           • Multiple installation in     • Capture information
                   Circle                           each household                 about their preferences,
                 • Refer new customers to         • Refer new customers to         lifestyles, change in
                   ABC CO                           ABC CO                         flooring interests, etc.
                                                                                   useful for further
                                                                                   dialogue

                            ABC CO Loyalty initiatives cover the entire ownership experience




                            Loyalty                                        ABC CO        Multiple     Opportunistic
            Welcome                          Extending
                           Communic                        Newsletter      Owner’s     Installation   “Quick Win”
              Kit                           the Dialogue
                                                                                        Programs       Programs
                             ations                                         Circle




3
Dennis Ooi



    Create End User Pulls: Creative Communications
                                                                  39
    Emphasize on Appealing Design for All Marketing Material
                                                       Example
     The way people see

      • Visual
      • Caption
      • Headline
      • Copy
      • Signature (Advertisers logo, name, contact information)

     Appeal to the need

      • Comfort to walk upon
      •   Need for aesthetic sensation
      •   Hassle free (minimal maintenance required)
      •   Adds to the future value of home
      •   Need for prominence
      •   Need to feel safe
      •   Physiological need


3
Dennis Ooi



Create End User Pulls: Creative Communications
                                                                                       40
First glance focus point in the order numbered
                                                     It should in this order!

                                                                                1st
     1st
                                      Need effort
                                      to focus on
     2nd                                                                         2nd
                                      the flooring


     3rd
                                                                                 3rd

     2nd                             Logo colour
                                     not
                                     consistent
     1st


     3rd
Dennis Ooi



Create End User Pulls: Creative Communications
                                                                                                                 41
Communicating the Green Advantages of Wood to Our Customers

•    It is important to know that cutting one tree provides the opportunity for another to grow and
     that harvesting trees as a part of forestry is not the same as deforestation.

•    Money generated from wood products can help to ensure the continued existence of the forest by
     providing the private landowner an incentive not to convert forestland to another use.

        Personal      • salespeople need to believe in the green story and be well-versed in the
                        environmental aspects of our product as well as environmental issues in general,
         selling        including any differing requirements of certification agencies.


                      • ABC CO advertising should emphasize the core competencies, including those that
       Advertising      are focused on green, such as environmental certification.



         Public       • because green is a hot topic in society, free exposure in the media is easy to obtain.
                        A change in product composition and an accompanying press release can result in
        relations       news coverage and potentially free stories in key trade journals.


        Direct        • mailers and brochures, as well as e-mails, Web pages and other e-based forms of
       marketing        communication should help to carry the green theme.
Dennis Ooi


Be Different, Not Better:
Creating unique value to the customer
                                                                                                                                              42
  Mutually Reinforcing Activities
                                       Free                        Flexible                    Highly                        Mobile
                     Creative          Gifts                      timetable                   adaptable                      sales
                   communicat                                                                   store
                       ions                                                                     model
                                                                                                                             Present in new
                                             Delighted                        Architects                                      and existing
       Care and                              Customer                                                                          residential
       Maintena                               Service                                                                            areas
         nce                                                         Interior                 Specifiers
       Products                                                     Designers
                                                                                                                                  Low
                                                                                                                 CPD             start-
                                                                                                                                   up
                                         Modern
        High quality                                                                                                             costs
                                        flooring
         finishing                       tools /                                              Academy
                                        sanding                                                                        CSR
                                        machines            Certified
                                                            Installer
        Flexible                                                                               Strong brand
       remunera                                                                                 recognition                    Green
          tion                   Lean and                                                                                      effort
                                  highly
                                productive
                                  Crews                                             Premium
                                                                                     Prices                      PR
                     Clear                                                                                    activities
                    career
                     path                                Increase in
                                                            Sales
Dennis Ooi



Growing Strategically
                                                                                           43


1. Make the tested strategy even more distinctive
         - Introduce new technologies, features, products or services that are tailored
           to the chosen strategy and which leverage other distinctive activities within
           the value chain of ABC CO
2. Deepen the selected strategic position rather than broaden it
         - Raise the penetration of chosen customers / needs
3. Expand geographically to tap new regions or countries using the same
   positioning
         - Aggressively reposition foreign acquisitions around ABC CO’s strategy
4. Expand the market for what ABC CO can uniquely deliver
         - Find other customers and segments that would most value the chosen
           strategy
Dennis Ooi



Disclaimer
                                                                                44


       The list of suggestions presented in this presentation were developed
       based on the desk research I have performed and the judgement call I
       have made. As you may know, appropriate strategies could only be
       derived after going through a complete strategic planning process and
       desk research has a lot limitations, the data could be outdated,
       inaccurate and incomplete. My main objective is to convince you that I
       can contribute significantly to the sales growth of ABC CO by bringing
       in creative ways of business development not currently applied by the
       competition and are built on the current practises without over
       elaborating on the background information to justify the options
       selected. It is my intention to keep the information presented in this
       presentation short and concise as not to bore you. The suggestion that
       I have made are designed to exploit the weaknesses in the
       competition in developing countries, creating new competitive
       advantages for ABC CO, and hence, achieving the objective of
       maximising ABC CO growth.
Dennis Ooi




             Dennis Ooi
               +6012 2082 789
             kokpeow@gmail.com                45




                                 Thank You
                                 very much
                                   for your
                                  attention

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Business Growth Strategy for Wood Flooring

  • 1. Dennis Ooi 1 ABC CO Becoming the Growth Champion Dennis Ooi
  • 2. Dennis Ooi 2 Agenda: 1 Industry Trends 2 Analysis of ABC CO 3 Becoming the Growth Champion
  • 3. Dennis Ooi 3 1 Industry Trends
  • 4. Dennis Ooi Major Industry Trends 4 Distribution Customer Preference Flooring Fashion Globalisation Independent Specialty Home decorating on From Stores purchase of new house Narrow Range Horizontal Integration Redecorating, Remodeling, Backward and Forward To Big Box Home improvement Wide Range + Exotic Integration Growth Key Success Factors Social Responsibility International Import From Narrow Product Lines Quality, Style, Services Helping People Filling scarcity Reclaiming and recycling Chinese players becoming To Full Product Lines Co. Size, Technology, Efficiency => Quality, Style, Services used products major competitors
  • 5. Dennis Ooi Big Box is gaining control 5 Changing nature of the distribution channels Laminate Flooring - Distribution Channel Trends  Flooring sales have shifted from specialty by Retail Outlet stores to large home center  The relationships between manufacturers and distributors/retailers have been strained by the emergence of home center  Some are challenged to fill up factories, must take on high volume/low margin business in the home center channel  The retailers are extracting more value from the value chain than manufacturers  Within 10 years, the number of independent floor covering stores in the US will decrease to 6,000 from current 12,000 (Source: Floor Covering Institute blog) Source: Pfleiderer’s Corporate Presentation, Floor Covering Weekly Research, Uniboard Market Intelligence
  • 6. Dennis Ooi Changing Customer Preference 6 • more interest due to popular redecorating, remodeling, and home improvement television programs • partnerships for branding, labeling, and merchandising are important to the Home industry Decorating • cooperative advertising programs often cross promote flooring products • floorcovering shopper is more informed and sophisticated and willing to pay for quality but have higher expectations with a fashions and design focus • customers want a choice of color and design and many are demanding Mass personalization in their flooring Customization • offer customers a unique product • home centers now account for 35% of all retail flooring sales and many of their customers seek cash and carry solutions. Home Centers • In new home construction, carpet is losing the dining and living rooms to hardwood
  • 7. Dennis Ooi Flooring Fashion = + Exotic 7 Design Driven Raw Beauty Simplicity Colour Spectrum Mannington’s Earth’s Elements Tigerwood from Johnson Pinnacle’s Country Classics Combine Shaw carpet with Anderson hardwood, creating a value proposition Finish Line Sino-Maple’s tile design Welimade Bamboo Mannington’s Earth’s Elements Mullican’s Castillian Collection Home Legends Anderson’s Tropical Reflections Armstrong unique parquet
  • 8. Dennis Ooi Globalization: large players cornering the market 8 > Strong foreign > Challenging to develop export markets Mobility and Entry Barriers to Mobility Advantages Large Manufacturers’ Small Manufacturers presence (e.g > Weak transportation links undermine Amstrong, Flooring distribution and frustrate efforts to plants: 15 in US and 7 provide consistent delivery and customer outside US) service > Seek to gain > Face huge investment costs for competitive advantage transportation, warehousing, and other by excelling in related costs responsiveness through their distribution > Advertising costs for building a brand networks with strong related to new products are costly transportation links > Obtaining new downstream accounts can be difficult due to existing relationships and exclusive licensing of some products Backward + Forward > Necessity to sell through third party Integration distributors in order to reach the retail level (margin suffered)
  • 9. Dennis Ooi Growth through Acquisition: expanding product lines and distribution channel 9 Prior to 2001 - 2003 2004 - 2006 2007 - Present 2000 Focus on Acquired Dal-tile Acquired Unilin – Acquired Columbia Wood Flooring – soft surface – leading ceramic leading laminate leading wood position acquisitions position position Opened state-of- the-art laminate Acquired the Focus on manufacturing north Georgia soft surface Acquired Anderson Hardwood Floors facility, first step operations of the acquisitions into hard surface Dixie Group flooring Acquired the Acquired Pergo- Group – becoming fully engineered wood - - integrated manufacturer of laminated activities of Kunz- flooring Group Acquired Elegant Living in China, added approx. 550 outlets - - - Acquired Brewster in Australia, added 6 warehouses and distribution outlets
  • 10. Dennis Ooi Key Success Factors (KSF) : Size 10  The Industry Giants are slightly affected by US Subprime mortgage crisis and have been holding on very well 2009 Financial Performance Sales Growth Profit / (Loss) GP Margin Up stream Armstrong -18% $78 Million 22% The Dixie Group -28% ($42 Million) 26% Average Mohawk Industries -22% ($6 Million) 23% 24% Pfleiderer -22% ($86 Million) 24% Tarkett -17% $86 Million 23% Junckers Ltd -22% ($4.3 Million) 25% Kingfisher plc 5% $577 Million 36% Lowe’s Companies -2% $1.8 Billion 35% stream Home Depot -7% $2.6 Billion 34% Down Lumber Liquidators 13% $27 Million 36% Combined Average 35% and the Sales CAGR (1997 – 2007) was 5.3%, the retailers Average are extracting more value from the value chain than manufacturers 51%
  • 11. Dennis Ooi KSF : Technology and Efficiency 11 Continuing investment advanced data processing marketing distribution manufacturing equipment strategy systems Increasing ability to compete performance quality style service
  • 12. Dennis Ooi Technology and Efficiency = KSF Lumber Liquidators (LL) 12 Strategies applied by one of the most successful retailers
  • 13. Dennis Ooi Social Responsibility, Recycling and Reverse Supply Chain Logistics 13  Industry is focusing on recycling as well as reuse  Reclamation to reduce amount of waste entering landfills  Reducing the production impact on both air and water resources  Working with the “big box” retailers to recover post-consumer wastes  Substitutes for current products that offer sustainability include both bamboo and cork flooring  Each market is different in their environmental concerns (e.g. in Europe, buyers are concerned about whether products are made in an environmentally friendly manner and want to know if products are made with recycled material or through other sustainable processes)
  • 14. Dennis Ooi International Imports 14  Chinese manufacturers have become the US Vinyl Flooring Imports number one importer and the main competitor of U.S.-based flooring manufacturers  The International Trade Commission has confirmed that flooring imports into the U.S. are growing more quickly than domestic production. This means that foreign suppliers are growing their market share at the expense of U.S. manufacturers.  The growth of imports has been driven by US Wood Flooring Imports a shift in preferences toward finished flooring (which has a higher labor content), exotic species and engineered flooring  Illegal logging, which is more common in other countries, also enhances the price advantages of foreign suppliers  The growth in popularity and acceptance of Source: Foreign Competition Report for the U.S. Building Products Industry, laminate flooring benefits flooring Jordan, Knauff & Company importers
  • 15. Dennis Ooi Summary 15 Continuously increased in Leading players are • Entry of • The size of large, • Aggressively integrating low cost “leading” intermediate across businesses, activities, producers customer (big box) and geographies from • Knowledge and expectation of end customers + • Continuously investing in advanced manufacturing, data processing equipment, + China • Over • The breath of the marketing strategy and supply in distribution systems the product range available in the market for the end market customers = Limiting the space for ABC CO growth based on current business model 15
  • 16. Dennis Ooi 16 2 Analysis of ABC CO
  • 17. Dennis Ooi Overall Performance 17 Post Crisis, ABC CO’s growth rate and GP Margin have been affected by both economy-driven and competition-driven issues Ekowood’s Average Annual Sales Growth and GP Margin 50% 40% 30% 20% GP Margin 10% 0% -10% -20% US Subprime -30% mortgage crisis -40% Sales Growth -50% 2004 2005 2006 2007 2008 2009
  • 18. Dennis Ooi Bargaining Power 18 ABC CO is dealing with price sensitive expert buyers who have strong bargaining power, low brand loyalty, plenty of supply alternatives, and is relying on them to promote its brand • Lionvest Trading (UK) Pte Ltd UK, Wholesaler • Vepal A/S, Italy (Now known as Berti Pavimenti Legno), Producer and Wholesaler • RMK Limited Ireland, Wholesaler • Friedrich Klumpp GmbH, Coating Producer • Maderpark 2000 SL Spain, Distributor • Shaw Industries Inc USA, Producer and Wholesaler • Long Floor Supply Inc USA, Distributor • GP Embelton and Co Ltd Australia, Producer and Distributor • True Grid Flooring Distributors Australia, Producer and Distributor • Takenaka Corporation Japan, Construction Firm Source: 2004 IPO Prospectus
  • 19. Dennis Ooi Product and Service Positioning 19 •Retail Price Product Features •Log selection system •Production process US •Texture •Grain •Colour UK •Ease of Maintenance •Hardness Australia •Natural Decay Resistance •Durable covering •Dimensional stability Spain •Surface durability •Workability •Ease in finishing •Moisture content ABC Italy •Lifetime •UV-protection China •Convenience of location Need to determine the positioning Service Features •Consistency of supply •Responsiveness of ABC CO as compared to the Germany •Species Education relevant players in various •Floor Caring Education •Installation Services countries, my resources are Malaysia •Web Information •Reputation insufficient to do so •Variety of options and upgrades offered •Warranties
  • 20. Dennis Ooi 20 3 Becoming the Growth Champion
  • 21. Dennis Ooi The Theme 21 Competing to Competing to be the Best be Unique Value Innovation The worst error in strategy is 1. Industry to compete with rivals on the Forget industry analysis; many constraints are imaginary same dimensions 2. Competition Source: Professor Michael E. Porter Harvard Business School Forget what competitors are doing, focus on adding value 3. Markets Go for big blocks of customers; let some customers go 4. Capabilities Forget current assets; ask “What if we were starting over?” 5. Products Forget conventional products; figure out what customers need Source: Blue Ocean Strategy, Kim and Mauborgne, Harvard Business Review (Jan/Feb, 1997)
  • 22. Dennis Ooi Proposed Transformation 22 From To Competing to be the Best Competing to be Unique + Mobile Showroom and Franchising Progressively + ABC CO Floorcovering Institute + ABC CO Floor Surface Treatment and Care Products Currently + Creative Outsourced Communications
  • 23. Dennis Ooi Proposed Transformation 23 Find the attractive customers Competing to be Unique • Large, “leading” customers tend to attract the most competition and be the most demanding + Mobile Showroom Grow alternative channels and Franchising • Nurture and support alternative channels that + ABC CO bypass powerful intermediaries or cultivate new Floorcovering customer groups Institute Create end user pull + ABC CO Floor • Temper the power of the immediate customer by Surface Treatment appealing directly to the end consumer and Care Products Be different, not better + Creative Communications • Strategic positioning to increase unique value to the customer
  • 24. Dennis Ooi Find the attractive customers 24 Out target + M’sia
  • 25. Dennis Ooi Find the attractive customers 25 High net worth individuals, HNWI (NW> USD 1 million) Total 467,000
  • 26. Dennis Ooi Find the attractive customers 26 Population Malaysia China India Indonesia Total Source: Capgemini and Merrill Lynch Wealth Management, 2009 Total 28,250,000 1,338,612,968 1,183,120,000 229,965,000 Asia Pacific Wealth Report, IMF, Wiki HNWI 15,364 364,000 84,000 19,000 482,364 % HNWI 0.0544% * 0.0272% 0.0071% 0.0083% GDP (nominal) per capita 6,897 3,678 1,031 2,329 Note Note Total Population Targeted 1 482,364 Forex Rate 14 3.2035 % Potential Sales p.a 2 1.00% Total Sales (RM) per sq. ft. 12 X 14 = 15 23.48 No of Installation p.a. 1X2=3 4,824 Average sq ft 4 2,000 Total Gross Profit (RM) per sq. ft. 13 X 14 = 16 13.34 Total Installation (sq ft) 3X4=5 9,647,273 Total Revenue (RM) 15 X 5 226,533,943 Industry Average Price Total Gross Profit (RM) 16 X 5 128,719,491 Hardwood (USD) per sq. ft. 6 4.83 Retail + Manufacturing GP% 7 50% Gross Profit (USD) per sq. ft. 6X7=8 2.42 Item 2, 4, 9, 10 : based on personal estimation Item 6 and 7: please refer to previous slide page 10 and 12 Installation Services (USD) per sq. ft. 9 2.50 No of HNWI in Malaysia is not available and it is estimated based on 2 times GP% 10 70% * the HNWI in China (0.0272% X 2 = 0.0544%) Gross Profit (USD) per sq. ft. 9 X 10 = 11 1.75 Total Sales (USD) per sq. ft. 6 + 9 = 12 7.33 Total Gross Profit (USD) per sq. ft. 8 + 11 = 13 4.17 Expected additional potential revenue p.a. of RM226 million in the 5th year
  • 27. Dennis Ooi Alternative Channel : Mobile Showroom + Franchising 27 Customer Needs Distinctive Activities Consumers like the idea of • Numerous station near various luxury residential shopping for floor covering when areas it’s convenient to them, in their own home, with their own • Hardware & software program for in home lighting and décor. measurement and quotes • Perform demo to customers (hardness and Value Proposition moisture test) Shop at home, bringing personal • Provide education on wood species, floor caring, service closer to customer. and installation method • Capture information about prospective Risk / benefits to ABC CO customers preferences, lifestyles, flooring (+) 3 layers of GP Margin interests, etc. useful for further dialogue (Manufacturing 24%, Retailing 35%, Installation 50%) www.ABC CO.com (+) If successful, it will be another major channel of distribution. (-) Payback period for the investment in trucks (e.g. RM1mill for 4 units) maybe stretched (>3 yrs)
  • 28. Dennis Ooi Create End User Pulls: ABC CO Floorcovering Institute CPD Seminars 28 Customer Needs Distinctive Activities Architects need to collect CPD • Installation of Hardwood Flooring (Seminar) points annually • Maintenance and Finishes for Hardwood Flooring (Seminar) Value Proposition • Selecting and Specifying the Correct Hardwood Seminars (Accredited Core Floor (Seminar) Curriculum) Free CPD Seminar Risk / benefits to ABC CO Architects (+) Establish a network of architects who will recommend Recommendation our products Buy (+) Can be used as referral system where architects are End Users allowed to collect CPD points for free if they use our Same concept can be applied to real estate products agents and interior designers (-) Unable to recoup the cost of conducting the seminar
  • 29. Dennis Ooi Create End User Pulls: ABC CO Floorcovering Institute Certified Floorcovering Installers (CFI) 29 Issues Value Proposition • Short supply of quality wood flooring • ABC CO is the sole certification provider in contractors the Asia Pacific region • Existing wood flooring contractors often • Further increasing the professionalism of have their own way of doing things the wood flooring industry • Installers seldom use knee pads, respirators, • As a education hub to the Asia Pacific ear muffs and glasses region for training certified floorcovering • The many challenges to a high-quality job- installers site-finished floor have translated into good business for factory-finished products (e.g. Distinctive Activities laminate, rug and carpet) • Low quality installation and sanding spoil the • Be the major source of new trainees for the image of the products and manufacturers trade • Ultimately development of post high school training program(s) in the Asia Pacific region Customer Needs • Facilitate Teacher Training • Provide Work Experience • Consumers have a high expectations for the • Part Time Job Options finished product and they want a furniture- • Post High School Job Options grade finish on a wood floor • Referral to Formal Training Programs • As floors are becoming more of a design • Subsidize Materials and Training point, specifiers are looking for that edge that will make their floor a little different
  • 30. Dennis Ooi Create End User Pulls: ABC CO Floorcovering Institute Certified Floor Covering Installers 30 Groom CFI to be Customer get work with the the manager of used to the high local government ABC CO Provide job mobile showroom quality finishing to make CFI a monopolizes the opportunity or franchise and professional compulsory to market holders work protect consumer Risk / Rewards to ABC CO (+) Control the downstream and increase end users willingness to pay (+) This business model can work effectively in many countries where www.ABC CO.com installers are not professionally train. (e.g. In China, massive amounts of wood flooring being produced, but not being installed) (-) Grooming a CFI, take about 3 years, the payback period maybe stretched
  • 31. Dennis Ooi Create End User Pulls: ABC CO Floor Surface Treatment and Care Products 31 Customer Needs Distinctive Activities Consumers want the floor to look • Direct customer interaction through direct mail, good all the time telephone, and the Internet • Delivers the products to customers’ homes Value Proposition • Send as free gifts to previous customers and ask Provide convenience to the for referral customer in caring and maintaining the wooden floor Risk / benefits to ABC CO (+) Consistently remind customer of ABC CO brand Floor Care (+) Can be used as free gifts for Manual first time customer or as part the referral system (-) Minimal
  • 32. Dennis Ooi Create End User Pulls: Creative Communications 32 The Creative Brief Get Targeted segment, staff, community Who visit, buy, own, enjoy, think about ABC CO To have a better perception about the company By delivering a consistent Brand communication Thru testimonials, PR activities, events sponsorship, positioning statement, employer branding, seminars While retaining a message of Diverse, History and Excellence 3
  • 33. Dennis Ooi Create End User Pulls: Creative Communications 33 The Creative Brief • Clear and consistent brand image • Uniform styles • In all forms of written and visual communication Colours used with online publications Logo appearing in most documents Should black be used? 3
  • 34. Dennis Ooi Create End User Pulls: Creative Communications 34 Events Employer Testimonials PR Activities Seminars Sponsorships / Branding CSR  Obtain satisfaction Contribute newspaper  “Techniques for wood  Give out bags articles discussing  Becoming the flooring condition and T-shirts with endorsement from authorized about assessments” ABC CO logo to previous customers employer for orphanage (written and video) 1) The latest Chartered  “Formulating an homes installation method Accountancy appropriate corporate real  Creates corporate video, showcase all used by ABC CO Training estate strategy”  Organise and sponsor major the previous floor 2) The house price  “Planning your future by sport events like installed  Work with appreciation enjoyed by choosing the right marathon to be the previous ABC CO accredited flooring” held in major  Create past schools to train customers private colleges success stories in floor covering  “How the design of floor the form of articles 3) How the design of experts covering could affect your  Sponsor major / case studies floor covering could emotion, hence your life” transplant affect your emotion, surgery hence your life performed by IJN. Targeting people looking for new property, and for us to collect name card and build the marketing database 3
  • 35. Dennis Ooi Create End User Pulls: Creative Communications 35 Private Charter Flight Golf / Japanese 5Star Hotels Banks Hospitals Companies Club Targeting: Credit Targeting: High Targeting: : High Targeting: High Card members Targeting: Net Worth Net Worth Net Worth and Private Expatriate Medical Patients Individual Individual Banking clients ABC CO ABC CO ABC CO ABC CO newsletter as a newsletter as a Special ABC CO newsletter as a newsletter as a Magazine in foreign reading material reading material reading material reading material language for patient for hotel guest at the waiting at the waiting lounge area Infomercials for Infomercials for Infomercials inpatient entertaining Infomercials for Infomercials entertainment at entertainment staying in guests In-Flight entertainment at the waiting area entertainment the waiting area Joint funding of campaigns; training and support 3
  • 36. Dennis Ooi Create End User Pulls: Creative Communications 36 The Client’s Brief Get potential, new and old customers Who visit, ask, own, enjoy, think about ABC CO To realise the brand promise By delivering service, recognising, creating convenience, providing information, being helpful Thru Welcome Kit, Loyalty Communications, Prospect Prioritization/Extending the Dialogue, ABC CO Magazine, ABC CO Owner’s Circle, Cross Sell and Up Sell Marketing, Opportunistic “Quick Win” Programs While retaining a message of Diverse, History and Excellence 3
  • 37. Dennis Ooi Create End User Pulls: Creative Communications 37 Central system of measurement Create a central system of measurement to Data Access & Analysis  record a broad range of Software information on ABC CO customer Marketing Staff  Campaign, response, and Customer Transactions lifestyle data  >100 appended individual and household data points Marketing  monitors communications and Database response from prospects and Customer Service customers  Measurement includes cost per response and cost per sale Appended Data &  view the full shopper-owner Modeling cycle from first point of contact, Inputs from Frontline, Phone, Web through sale and cross sale Web Site 3
  • 38. Dennis Ooi Create End User Pulls: Creative Communications 38 Core Communications Program General Goals: To new product owners, > 5 years products Goals: owners. Goals: • Immersion in the ABC • Increase the repurchase • Purchase other ABC CO CO Experience rate products • Promotion of Owner’s • Multiple installation in • Capture information Circle each household about their preferences, • Refer new customers to • Refer new customers to lifestyles, change in ABC CO ABC CO flooring interests, etc. useful for further dialogue ABC CO Loyalty initiatives cover the entire ownership experience Loyalty ABC CO Multiple Opportunistic Welcome Extending Communic Newsletter Owner’s Installation “Quick Win” Kit the Dialogue Programs Programs ations Circle 3
  • 39. Dennis Ooi Create End User Pulls: Creative Communications 39 Emphasize on Appealing Design for All Marketing Material Example The way people see • Visual • Caption • Headline • Copy • Signature (Advertisers logo, name, contact information) Appeal to the need • Comfort to walk upon • Need for aesthetic sensation • Hassle free (minimal maintenance required) • Adds to the future value of home • Need for prominence • Need to feel safe • Physiological need 3
  • 40. Dennis Ooi Create End User Pulls: Creative Communications 40 First glance focus point in the order numbered It should in this order! 1st 1st Need effort to focus on 2nd 2nd the flooring 3rd 3rd 2nd Logo colour not consistent 1st 3rd
  • 41. Dennis Ooi Create End User Pulls: Creative Communications 41 Communicating the Green Advantages of Wood to Our Customers • It is important to know that cutting one tree provides the opportunity for another to grow and that harvesting trees as a part of forestry is not the same as deforestation. • Money generated from wood products can help to ensure the continued existence of the forest by providing the private landowner an incentive not to convert forestland to another use. Personal • salespeople need to believe in the green story and be well-versed in the environmental aspects of our product as well as environmental issues in general, selling including any differing requirements of certification agencies. • ABC CO advertising should emphasize the core competencies, including those that Advertising are focused on green, such as environmental certification. Public • because green is a hot topic in society, free exposure in the media is easy to obtain. A change in product composition and an accompanying press release can result in relations news coverage and potentially free stories in key trade journals. Direct • mailers and brochures, as well as e-mails, Web pages and other e-based forms of marketing communication should help to carry the green theme.
  • 42. Dennis Ooi Be Different, Not Better: Creating unique value to the customer 42 Mutually Reinforcing Activities Free Flexible Highly Mobile Creative Gifts timetable adaptable sales communicat store ions model Present in new Delighted Architects and existing Care and Customer residential Maintena Service areas nce Interior Specifiers Products Designers Low CPD start- up Modern High quality costs flooring finishing tools / Academy sanding CSR machines Certified Installer Flexible Strong brand remunera recognition Green tion Lean and effort highly productive Crews Premium Prices PR Clear activities career path Increase in Sales
  • 43. Dennis Ooi Growing Strategically 43 1. Make the tested strategy even more distinctive - Introduce new technologies, features, products or services that are tailored to the chosen strategy and which leverage other distinctive activities within the value chain of ABC CO 2. Deepen the selected strategic position rather than broaden it - Raise the penetration of chosen customers / needs 3. Expand geographically to tap new regions or countries using the same positioning - Aggressively reposition foreign acquisitions around ABC CO’s strategy 4. Expand the market for what ABC CO can uniquely deliver - Find other customers and segments that would most value the chosen strategy
  • 44. Dennis Ooi Disclaimer 44 The list of suggestions presented in this presentation were developed based on the desk research I have performed and the judgement call I have made. As you may know, appropriate strategies could only be derived after going through a complete strategic planning process and desk research has a lot limitations, the data could be outdated, inaccurate and incomplete. My main objective is to convince you that I can contribute significantly to the sales growth of ABC CO by bringing in creative ways of business development not currently applied by the competition and are built on the current practises without over elaborating on the background information to justify the options selected. It is my intention to keep the information presented in this presentation short and concise as not to bore you. The suggestion that I have made are designed to exploit the weaknesses in the competition in developing countries, creating new competitive advantages for ABC CO, and hence, achieving the objective of maximising ABC CO growth.
  • 45. Dennis Ooi Dennis Ooi +6012 2082 789 kokpeow@gmail.com 45 Thank You very much for your attention