PRG is considering entering the Danish market and has identified three strategic options: entering on its own, acquiring a company, or forming a joint venture. Acquisition is recommended as the only viable option to achieve PRG's goals of becoming a top 3 player with at least 15% EBITA margins within 3 years. Specifically, acquiring Jbs is proposed as it would improve PRG's market share and competitiveness in Scandinavia while removing a strong competitor. A preservation-focused integration strategy is recommended along with applying change management practices like communicating the vision and monitoring goals. A successful implementation depends on clear communication, removing obstacles, and setting targets to help employees accept the acquisition-driven changes.

1. A market entry strategy for
Pierre Robert Group in Denmark
EMBA 2009/2010
Thomas Blomqvist

2. Introduction
• PRG has decided upon a significant growth scenario
to be realized within 3 years.
• Creating significant growth in its home markets is a
challenge.
• PRGs vision is strongly linked to Scandinavia as their
home market.
• PRG is not present in Denmark .
• PRG has adressed the need of a full market entry
strategy for Denamark.

3. Todays presentation is diveded in 3 parts
and adress the following questions:
The situation The problem,
the strategic issues
& recommendation
Implementation

4. The industry is attractive, but due to
limited access to the sales channels its
difficult to achieve economies of scale.
• The market has experienced a CAGR of 8,6% in 2005-
2008, +4,9% units above apparel, and the market is
predicted to continue to grow.
• High buyer power – low supplier power
• Threat of new entrants is high, but due to limited
access to distribution it remains difficult to achieve
economies of scale.
• The total accessible market is approximately 52%
($289 million) of the total market.

5. The winners in the market are the low
priced grocery retailers and low priced
fashion trade chains.

6. 2 different sales channels, but
similar key success factors!
• Fast product turnaround
• Scale
• Low cost operation
• High volumes
• Buyer power
• Low price points

7. PRGs focus on the grocery trade, their
strong innovations and heavy investments
in media has contributed to the success.
• Innovation – a key tool for creating growth.
• PRG apply different assortment strategies
depending on product groups, and each strategy
is linked to the limited space in the grocery
stores.
• PRG apply a full service concept to all its
customers which allow for higher margins and it
tend to exclude competitors.
• The sales channel enable a high level of
distribution.

8. Conclusion part 1
The situation The problem,
the strategic issues
& recommendation
Implementation

9. Conclusion part 1
The situation The problem,
the strategic issues
& recommendation
Implementation

10. PRG should consider 3 strategic options:
Enter Denmark on its own, entry by an
aquisition or entry by a joint venture.
• The options are linked to the problem:
What can be done in a 3-year period in order to achieve
a position among the Top 3 players in the market, and an
EBITA margin of minimum 15%?
• By using the TOWS framework to match
external T & O with internal S & W and by
analysing the winners KSFs and KPIs with
PRG, we are able to conclude on the
options.

11. Acquisition is the only viable
alternative for PRG.
• An aquisition of either Jbs or Hb Textil would
solve the problem.
• To reach the target on its own, the company
needs initiatives that at least enable a turnover
of $30 million in year 3. (62% market share of the
accessible market s within the grocery trade.)
NOT VIABLE
• A joint venture would not solve the problem due
to the risk of not achieving the growth and
profitability target. NOT VIABLE

12. Recommendation
PRG should consider buying Jbs.
• PRG would improve its market share and
competitive position in Scandinavia.
• It would remove a strong competitor on the
market.
• The M&A would also allow for entering new sales
channels in DK, as well as in NO and SWE.
• The product portfolios supplement each other.
• Financially Jbs is strong.
• Previous aquisitions of Orkla imply an upper
price level of $25,5 million.

13. Conclusion part 2
The situation The problem,
the strategic issues
& recommendation
Implementation

14. Conclusion part 2
The situation The problem,
the strategic issues
& recommendation
Implementation

15. Part 3
The situation The problem,
the strategic issues
& recommendation
Implementation

16. •Low success rate in M&As.
• Combining separate organizations, cultures and
different management systems is one of the key
explanations.
• The acquiring management need to learn about the
company before designing and implementing major
changes.
• The strategy of Orkla supports the preservation
strategy approach.
PRG should consider a preservation
strategy approach to integration.

17. •Even if a preservation strategy is proposed, there is
a need for adaptive change.
• I suggest that PRG adopt a process perspective on
change managment, in combination with Hays
generic model of change.
• Developing a sense of urgency in order to get ”buy
in”.
• Securing the powerful stakeholders and form a
guiding coalition
• Create a vision for change
PRG should apply a change management
perspective and plan for change.

18. •Focus on communicating the fundamental issues
• Perform regular audits of the communication in
order to assess if the objectives are achieved.
• Remove potential obstacles in order to empower
employees to act on the vision.
•Implement a BSC based appraisal system in order to
monitor and review the effects of the change
process.
A successfull implementation strategy depends
on a clear communication strategy, the removal
of obstacles, and setting clear goals.

19. •The chosen strategies and an open dialogue
suggests that the process will not be perceived as a
large threatening change process.
•By establish a sense of urgency, but still not rushing
the process, will help the employees to digest the
change.
•The project team should ensure that the
operational managers prepare and secure the
appropriate feed back to each individual.
The preservation strategy, a clear
communication strategy and an open dialogue
will contribute to sustaining the change.

20. Conclusion part 3
The situation The problem,
the strategic issues
& recommendation
Implementation

21. Conclusion part 3
The situation The problem,
the strategic issues
& recommendation
Implementation

22. Thank You!