EXECUTIVE SUMMARY (extract) •Competitive advantages. Our competitive advantage is based on our human expertise. It will be through knowledgeable staff in wine with good grasp on our portfolio and empathy. The goal is to build trust with the customers, to be able to advice them in their purchase according to their taste, the atmosphere they want to create and to be able to say no to a customer if the bottle will not fit their taste. Finally we are bringing the traditional French wine in the portfolio but also Spanish one that are less known. •Competition. Competition in China might seem fierce, as it is the new Eldorado, especially in Shanghai, the most Occidentalized city. However, our location analysis gave us a perfect spot with low competition – only two wine bars in the neighborhood with no retail option. •Financing. The project is having a paid-up capital equally divided among the founders of EUR 50,000. There is a Working capital requirement of EUR 100,000 that needs to be funded either through bank loans or through an investment and EUR 10,000 overdraft requirement. •Project feasibility. The main points of expenses in the project are the rent and the inventory purchase. With a goal of 3% of the market share the first year, a margin of 45% over the bottle price and another 15% other the glass price at the bar, the project is expected to generate enough cash to repay the loan by the end of the third year with an IRR of 39,5%

1. SUBJECT
DATE AUTHORS
26/06/2013
MURIEL WOJDYNIAK, FREDERIC BREMENT,
ALVARO DE LA TORRE, ADRIEN PHO
Honored Wine Glass – 尊爵 ©

2. PRESENTING TEAM:
.FREDERIC BREMENT
.ADRIEN PHO
.ALVARO DE LA TORRE
.MURIEL WOJDYNIAK

3. Table of content
• The concept
• Objectives and Strategy
• The business (organizational chart)
• Logistic and partners
• Marketing and Communication actions
• Financial point of vu
• Legal
• Risks and Worst case scenario
• Conclusion

4. Introduction
• Shanghai, China
• Wine bar and retailer
• Spanish & French wines,
• Staff
• Paid-in capital of EUR
50,000
• Funding request of EUR
100,000
• 4 years
• 5,5%
• Overdraft of EUR 10,000
• 7%

5. Become a trusted reference as an European wine bar and
retailer in Shanghai

6. Vision
People
Portfolio
Partners
Planet
Profit
Productivity

7. Objectives
Global:
• Be known as a new wine shop concept,
• To surprise them,
• Discover a new culture,
3rd year objectives
• Reach 35,800 bottles
• turnover +34,25%
• Increase the loyalty of our customers,
• Develop our website : special members section
• Increase our wine and liquor portfolio,
• Open our second shop in Shanghai,

8. Objectives
5th year objectives
• Reach 57,730 bottles sold,
• Turnover by 115%,
• Reference in Spanish wines,
• Develop and create links with suppliers,
• Increase our local partners,
• Create a private club,
• Open a 3rd shop in Shanghai,
• Prepare the opening of a 4th shop
8

9. Competitive advantage
• Knowledgeable staff in wine
• Build trust with the customers,
• Be able to say no,
• Advice customers in their purchase according to
• Their taste,
• The atmosphere they want to create,
• Quality of the wine
9

10. Our Strategy
• Adrien Pho as the CEO
• Hire Chinese people experts on wine,
• Expand the concept as soon as possible,
• Price policy: middle range class target,
• Keep our original concept,
10

11. The business organizational
structure
11
Frédéric BREMENT
Marketing
And sales director
Alvaro de la TORRE
Purchasing
And logistic director
Muriel WOJDYNIAK
Human Resources
director
Salepeson 1 Saleperson 2 Bartender 3
Adrien PHO
CEO
Financial manager
Bartender C Saleperson A

12. The employees
Wine consultants
• Give friendly and efficient
advices,
• Assisting the wine
tasting events,
• Reach the weekly
objectives
• Fixed wage +
commission
• Knowledge about:
• European wine,
• Chinese culture,
• Selling skills
12

13. The employees
Bartender
• Must know each one of our wines,
• Advice the consumer perfectly, impress him
• Support to the sales,
• Knowledge:
• European wines,
• Adapting/selling skills.
13

14. LOGISTICS
14

15. Spanish Suppliers
• Marques de Riscal
• Marques de Riscal Red Reserva
• Baron de Chirel Reserva
• Marques de Caceres
• Marques de Cáceres Blanco Semidulce
• Marques de Cáceres Rosado
• Bodegas Berceo Gurpegui
• Pintoresco
• Berceo Crianza Seleccion
15

16. Wines from Spain
16

17. French Suppliers
• Bordeaux Wines
• Augey (White)
• Baron du Pin
• Bourgogne Wines
• Hautes de cotes de Beaune .
• Aligoté (white)
• Pernod Ricard
• Ricard
• Chivas
17

18. Wines from France
18

19. JF Hillebrand
• Help us in each section of the logistic.
• Our importer to Shanghai Port.
• One of the most important companies .
• Facilities.
19

20. Incoterms
20

21. DAP (Delivered at
Place)
• This will be the contract that we will make with the
importer company.
• The importer will be responsible for making a safe
delivery of our containers in our destination.
• Include all transportation expenses, but not the
duty.
• Less risky, more cost.
21

22. Bonded Warehouse in
Shanghai.
• Manufacturing operations without payment of duty.
• Managed by the state.
• We will have to pay the taxes, just when we will
take out boxes.
• Integral part of the supply chain.
22

23. Market Conditions
• Tariff on Spanish wines is 14%.
• Wine in bulk, carries a tariff of 20%.
• The VAT is 17%.
• Consumption tax rises another 10%.
• CIF value is applied to a tax of 56% for bulk wine,
and 48.2% for wine bottling.
• Labels
23

24. Transport
• Main port: From Barcelona and Bordeaux port to
Shanghai Port.
• Also Valencia and Bordeaux, could be another
option
• Dominant support in global trade.
• The cost will be less.
• Huge capacity
• Delivery time.
24

25. The cost
25

26. MARKETING
26

27. Marketing
• Geographic Segmentation
• 1.34 billion > Chinese population
• 19 million > consuming wine
• 14.3 million > imported wine
• 248 million > purchasing power
• Shanghai population : 23.71 million (2012)
• Most mature market : 80% of the wine brands belong to the imported
wine
27

28. Marketing
• Psychographic segmentation
28

29. On-
trade
80%
Off-trade
20%
Volume share in 2009
On-trade
65%
Off-trade
35%
Volume share in 2015
Marketing
• Behavioral segmentation
29

30. Marketing
• Targeting
• Low-middle class and the up-middle class
• Men and women
• 30 to 45 years old
• Employees
• household income will be between CNY 25,000
and CNY 100,000.
30

31. Marketing Action plan
• Social network campaign
31

32. Marketing Action plan
Creation of a website 32

33. Marketing Action plan
33

34. 34

35. Marketing Action plan
Flyers distribution
35

36. Marketing
Action plan
• Loyalty program
• How does this program work?
• When can you use your points earned?
36
Yuan spent Points earned Yuan won
20 1
200 10
1200 60 20

37. Marketing
Action plan
Creation of a brochure
37

38. FINANCE
38

39. Main assumption
• Market share: 3%
• 1 EUR = 7.95 CNY
• Yearly sales increase: 115%
Low Mid High
55% 25% 20%
115 140 250
39

40. Forecasts
26,730
29,901
35,886
50,508
57,730
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Y1 Y2 Y3 Y4 Y5
Bottles sales in number of bottle
Low end number of bottles
Mid end number of bottles
High end number of bottles
Total number of bottles
40

41. Forecasts
249,228
279,391
334,598
470,934
538,272
0
100,000
200,000
300,000
400,000
500,000
600,000
Y1 Y2 Y3 Y4 Y5
Shop Sales in EUR
Low end sales
Mid end sales
High end sales
Total sales
41

42. Forecasts
311,535
349,239
418,247
588,667
672,840
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Y1 Y2 Y3 Y4 Y5
Bar Sales in EUR
Low end bar
Mid end bar
High end bar
Total bar
42

43. Cash flow
CF, 346,766
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
January
March
May
July
September
November
January2
March2
May2
July2
September2
November2
January3
March3
May3
July3
September3
November3
January4
March4
May4
July4
September4
November4
January5
March5
May5
July5
September5
November5
CashFlowinEUR
CF
43

44. Risks
• New quotas
• Bad harvest in Spain and France
• Cognac
• Credit crunch
44

45. Conclusion
• Expand up our own bar/shop in Shanghai
• Become an important company in the wine sector.
• Create more stores.
• Important suppliers.
• Increase sales.
45

46. THANK YOU
46
CONTACT@ZUNJUE.CN

47. Extra Slides
To answer your questions

48. FINANCE

49. Worst case scenario
• Portfolio expansion
• Third tier cities
• Sell

50. HUMAN RESOURCES
50

51. Recruitment
• chinaHR.com
• Acquired by Monster.com
• 51Jobs
• Reach 4 million people each week
• Zhaopin
• 1994: headhaunting website transformed.
51

52. Trainings
• Wine training
• Special contract with Marquès de Riscal
• One week training in Spain
• Exchange: minimum of bottles sold in a year
• Chinese culture
• Adrien Pho
• 3 days in Shanghai
• Balanced thanks to our staff
52

53. Contracts
• Permanent contracts
• 8h/days,
• Trial period: 6 months,
• Bartender: fixed wage: 500€
• Wine consultants:
• Fixed low wage + a commission (1CNY/bottle)
• 350€ + commission =
• Share the sales of the month, Team spirit
• Legal holidays: 16 days/year (for the first 10 years),
• Trainings: for the co-founders:
• Wine: Marquès de Riscala
• Chinese: Adrien Pho
53

54. MARKETING
54

55. Marketing cost
Cost In Euro In Yuan (CNY)
Staff hire per hour 1,82 14
Survey (4 persons, 4 hours) 28 222,6
Flyers 500 unit pack 18,6 147,87
Flyers distribution (4 persons, 4
hours, 4 packs)
102 810,9
Caterer per person 10 79,5
Wine trade fair (all include) 5800 46110
Professional Brochure x1000 180 1431
Website creation and maintenance
(first month free)
26 206,7
Loyalty card x1000 213,85 1645
Loyalty software hardware + support
per month
15,34 118
Insurance 200 1590
55

56. Loyalty programm
• Which company will make us those loyalty cards?
• It will be a company called Loyalty Pro who has a subsidiary in China. They are
offering software and hardware solutions for a loyalty program.
• The package includes:
• 1000 cards (design, production)
• Docking station (computer – tablet – power supply – metal stand – system)
• Loyalty Pro portal for web registration
• Data base creation, storage, security and maintenance
• License for the software
• Warranty which cover the equipment
• Customer relationship management tools
• Cost:
• It will cost 1,645 CNT for the production of card and the equipment installation,
and then it will cost 118 CNY a month for the license and any maintenance and
support needed.
• It represents respectively 213,85 Euros and 15,34 Euros.
56

57. SEO
Search engine optimization
• Visibility of a website
• Higher ranked on the search engine
• Use keywords
• Focus the content on an area of expertise
57

58. Insurance
The General liability
• It is covering product liability and personal injury protecting us (the co-founders) if a customer hurt himself inside the shop for example.
Liquor liability insurance
• To cover us against customer complaints and injuries caused by alcohol.
Product liability insurance
• Protect us in the case of product counterfeit and defect on a product.
Business property
• Knowing that the bar business can be more “risky” with lots of fragile items and glasses, alcohol, we will need some special policies according
to the core of our business.
Moreover, it will cover our shop from natural disaster.
Workers’ Compensation
• This will cover all our employees if they hurt and get damage inside their working area.
Crime Insurance
• The probability that this kind of event happen is low, but it is always important to be cover if people break into the shops to steal you.
The price for this kind of professional insurance in the bar and catering industry is about 1,590 CNY a year representing 200 Euros.
58

59. Legal
Legal Form of Enterprise.
• We have chosen to set our business under a WOFE (Wholly Owned Foreign Enterprise) business form in
Shanghai for several reasons:
• Independence and freedom to implement the worldwide strategies of its parent company without having to
consider the involvement of the Chinese partner;
• Ability to formally carry out business rather than just function as a representative office and being able to
issue invoices to customers in RMB and receive revenues in RMB;
• Capability to convert RMB profits to US dollars for remittance to the parent company outside China;
• Protection of intellectual know-how and technology.
• Due to the WOFE form, the business has a life expectancy of 30 years maximum that can be renewed.
59