Enterprise ThinkingEnterprise ThinkingEstee Lauder Travel RetailEstee Lauder Travel Retail

Hermon Kaur RajuHermon Kaur Raju

Spring 2008Spring 2008

“One does not reach greatness through one’s accomplishments, but through the accomplishments of those whom’s life one has touched.”

OBJECTIVE OF TEAM NAM:

Provide maximum support to our sales force, both branded and generic by utilizing our resources in the most productive and effective way. Deliver results to our management and our shareholders. This means working efficiently, by strengthening our relations both internally and externally with our retailer and bringing the best out of the people we touch.

-Carlos Arancibia

Estee Lauder Travel Estee Lauder Travel RetailRetail The mission is to “apply and adapt global brand strategies The mission is to “apply and adapt global brand strategies

to consumer needs in the Travel Retailing channel of to consumer needs in the Travel Retailing channel of distribution.” distribution.”

Headquarters: Miami, London, and SingaporeHeadquarters: Miami, London, and Singapore Offers 20 of the 26 brands to the traveling publicOffers 20 of the 26 brands to the traveling public Provides a convenient shopping alternative for our existing Provides a convenient shopping alternative for our existing

customers while introducing our brands to new consumers customers while introducing our brands to new consumers Characterized by Characterized by

– Exclusive product offeringsExclusive product offerings– Unique promotional vehicles Unique promotional vehicles – Innovative merchandising concepts Innovative merchandising concepts

The Aim: “To serve existing consumers, recruit new consumers, The Aim: “To serve existing consumers, recruit new consumers, and enhance brand awareness and equity as we maximize and enhance brand awareness and equity as we maximize sales and profits by providing an attractive and inviting sales and profits by providing an attractive and inviting shopping environment and experience” – Olivier Bottrie shopping environment and experience” – Olivier Bottrie

The Aim of Enterprise The Aim of Enterprise Thinking…Thinking…

Moving forward by doing things Moving forward by doing things Better Better FasterFaster CheaperCheaper

Applying 4 key Applying 4 key InitiativesInitiatives RedefiningRedefining Managing ProjectsManaging Projects AlliancesAlliances Time ManagementTime Management

What is Redefining?What is Redefining?

A management leadership tool to A management leadership tool to always find a better way to always find a better way to discover new competitive, mega discover new competitive, mega advantages by redefining advantages by redefining challenges, problems and challenges, problems and opportunities.opportunities.

Step 1.Step 1. Challenge Statement Challenge Statement

Challenge:Challenge:

International International Shoppes’s net Shoppes’s net sales do not sales do not reflect its retail reflect its retail sales growth. sales growth.

Test the Statement Test the Statement through 6 through 6 CriteriaCriteria

Test QuestionsTest Questions

1. Is the CS one issue? Yes1. Is the CS one issue? Yes2. Is the CS in the present or future tense? 2. Is the CS in the present or future tense?

PresentPresent3. Is the CS a problem or solution? Problem3. Is the CS a problem or solution? Problem4. Are the CS facts verifiable ? Yes4. Are the CS facts verifiable ? Yes5. Are the CS assumptions valid ? Yes5. Are the CS assumptions valid ? Yes6. Is the CS essential to your overall goal? Yes6. Is the CS essential to your overall goal? Yes

The Challenge In The Challenge In Depth….Depth…. 11stst quarter retail sales: 966K quarter retail sales: 966K 11stst Quarter Net sales: 300K, 420K Quarter Net sales: 300K, 420K

retail valueretail value Essential items are always out of Essential items are always out of

stockstock There is no 6 month inventoryThere is no 6 month inventory We should be at net 580 K, so We should be at net 580 K, so

increase sales 100%increase sales 100%

Step 2: Should Step 2: Should StatementStatement

Judge against criteria again…Judge against criteria again…How can we verify this?How can we verify this?Ask: Why do the net sales not reflect the retail sales? Ask: Why do the net sales not reflect the retail sales? Dig deeper…Dig deeper…What is my ultimate end?What is my ultimate end?

International Shoppes should be ordering more stock every month to match International Shoppes should be ordering more stock every month to match their retail sales growth.their retail sales growth.

Give myself a goal and convert into a Give myself a goal and convert into a WHAT WOULD IT TAKE StatementWHAT WOULD IT TAKE Statement

Step 3: Step 3: What Would it Take?What Would it Take?

What would it take for What would it take for International Shoppes to order International Shoppes to order 100% more stock in FY 2009?100% more stock in FY 2009?

What I Need to Know:What I Need to Know:

Retail SalesRetail Sales Net SalesNet Sales Net vs. Retail for other brandsNet vs. Retail for other brands Stock levelsStock levels Relationship IssuesRelationship Issues BackordersBackorders

Step 4:Step 4:Scan the Surface for Solutions Scan the Surface for Solutions (Put on Different Hats)(Put on Different Hats)

Higher Retail Sales Initiatives: Introduce a Spiff program, Monthly Higher Retail Sales Initiatives: Introduce a Spiff program, Monthly GWP promotionsGWP promotions

Clinique minimum order requirementsClinique minimum order requirements Checking warehouse stock levels weeklyChecking warehouse stock levels weekly Renegotiate stock levels- order more travel setsRenegotiate stock levels- order more travel sets HPPS with assigned goalsHPPS with assigned goals Reducing backorders on a corporate level to ensure we have stock Reducing backorders on a corporate level to ensure we have stock

on shelfon shelf Enlarge warehouseEnlarge warehouse Analyzing retail salesAnalyzing retail sales Check to see if mins and maxs are set correctlyCheck to see if mins and maxs are set correctly Increase counter spaceIncrease counter space Scrutinize sales recording systemScrutinize sales recording system Scrutinize Inventory AnalysisScrutinize Inventory Analysis Rework personal sales strategyRework personal sales strategy

Redefine Solutions..Redefine Solutions..

Measure each prospective solution against a list of qualifiers Measure each prospective solution against a list of qualifiers to narrow the list of possibilities to the BEST option. to narrow the list of possibilities to the BEST option.

Resources required (time, staff hours, money, etc.)Resources required (time, staff hours, money, etc.)

Potential impactPotential impact

Strategic fit/core competencyStrategic fit/core competency

Market conditionsMarket conditions

Time to implementTime to implement

Step 5: Redefining Step 5: Redefining produced the following produced the following solutions:solutions: Adjust Min and MaxAdjust Min and Max Renegotiate stock levels by Renegotiate stock levels by

increasing travel setsincreasing travel sets Eliminate backorders corporatelyEliminate backorders corporately Reworking Personal Sales Reworking Personal Sales

StrategyStrategyRenegotiate stock levels- increase travel Renegotiate stock levels- increase travel sets sets Adjust Min and MaxAdjust Min and MaxRework Personal Sales StrategyRework Personal Sales Strategy

Step 5 and 6: Step 5 and 6: Test SolutionsTest SolutionsSmall and Large ScaleSmall and Large Scale

Small Scale TestingSmall Scale Testing:: Focus group with other Senior Account CoordinatorsFocus group with other Senior Account Coordinators Run proposals by upper management and Run proposals by upper management and

International Shoppes managementInternational Shoppes management Discuss with Beauty ConsultantsDiscuss with Beauty Consultants

Large Scale Testing:Large Scale Testing: Compare quantifiable sales output regarding an Compare quantifiable sales output regarding an

account which buys in exactly in ratio to what it sells account which buys in exactly in ratio to what it sells outout

Test market solution by increasing stock for one Test market solution by increasing stock for one month and comparing retail sales compared to LYmonth and comparing retail sales compared to LY

Offering a more customized selling approach, Offering a more customized selling approach, enhancing value sets and bargains and comparing enhancing value sets and bargains and comparing results after one monthresults after one month

Managing ProjectsManaging Projects

Prioritizing Selected ProjectsPrioritizing Selected Projects

Putting Projects First Based on Putting Projects First Based on R0IR0I

ProjectProject TimeTime ImpactImpact R0I $R0I $ Money Money InvesteInvestedd

Priority Priority SelecteSelectedd

Generic Generic Staff Staff TrainingTraining

50 hrs50 hrs 8080 $20 K$20 K $5,000$5,000 33

Event Event StrategyStrategy

16 hrs16 hrs 7575 $45K$45K $7000$7000 22

Online Online picture picture databasedatabase

20 hrs20 hrs 2020 $1K$1K $50$50 55

Online Online Focus Focus ForumForum

6 hrs6 hrs 3030 $50K$50K $0$0 44

AssortmeAssortment nt UpdatesUpdates

30 hrs30 hrs 6565 $100K$100K $0$0 11

The Right Number of The Right Number of ProjectsProjects

Hermon

Annamaria

Eduardo

Annamaria

Eduardo

Hermon

Project Bank

You can only do two projects at a time and assist other people You can only do two projects at a time and assist other people occasionally with their two projectsoccasionally with their two projects

Dealing with two projects at one moment usually results in an 80% efficiency

Time ManagementTime Management

Institute time management Institute time management approach with to do lists the day approach with to do lists the day beforebefore

2 projects at a given moment2 projects at a given moment Focus on priority projectsFocus on priority projects Our job as managers is to think Our job as managers is to think

strategically and develop systems strategically and develop systems and proceduresand procedures

CPM ChartCPM Chart

Activity Activity Immediately Prec Time (days Immediately Prec Time (days))A.A. Receive Plannograms None 7Receive Plannograms None 7B.B. Order VisualsOrder Visuals A 2 A 2C.C. Create AssortmentCreate Assortment A 2 A 2D.D. Order Open Service A 2Order Open Service A 2E.E. Order Testers BCD 3Order Testers BCD 3F.F. Merchandising Date BCD 3Merchandising Date BCD 3G.G. SOH Clinique EF 3SOH Clinique EF 3H.H. SOH Estee Lauder EF 3SOH Estee Lauder EF 3I.I. SOH Aramis EF 3SOH Aramis EF 3J.J. Arrange Security Clearance GHI 3Arrange Security Clearance GHI 3K.K. Schedule BAS to work GHI Schedule BAS to work GHI 3 3L.L. Confirm open service GHIJK 3Confirm open service GHIJK 3M.M. Confirm all visuals GHIJK 3Confirm all visuals GHIJK 3N.N. Confirm all testers GHIJK 3Confirm all testers GHIJK 3O.O. Buy misc. elements LMN 1Buy misc. elements LMN 1P.P. Confirm with Shop Fitter 0 3Confirm with Shop Fitter 0 3Q.Q. Store Merchandising P 3Store Merchandising P 3

Critical Path Method- Critical Path Method- New InstallationsNew Installations

F

H M

P

L

I

G

J

K

D

B

A E

N

Q

O

C

ES: 0 EF: 7

ES: 7 EF: 9

ES: 7 EF:9

ES: 7 EF:9

ES: 9 EF: 12

ES: 12 EF:15

ES: 12 EF: 15

ES: 12 EF: 15

ES: 15 EF: 18

ES: 15 EF: 18

ES: 15 EF: 18

ES: 15 EF: 16ES:9 EF: 12

ES: 12 EF: 15

ES: 12 EF: 15

ES: 16 EF: 19

ES: 19 EF: 22

AlliancesAlliances

Optimize resources and strategiesOptimize resources and strategies

Through Alliances seek new Through Alliances seek new ventures and opportunitiesventures and opportunities

Alliance RequirementsAlliance Requirements

Clear understanding of goals of each Clear understanding of goals of each partyparty

(e.g., student recruitment for each school)(e.g., student recruitment for each school)

Benefits to each party (e.g., shared Benefits to each party (e.g., shared costs, expanded reach, etc.)costs, expanded reach, etc.)

Clear definition of roles of all parties Clear definition of roles of all parties

Definition of resources expended by each Definition of resources expended by each partyparty

Types of AlliancesTypes of Alliances

Ad HocAd Hoc Short TermShort Term Minimum Minimum ResourcesResources

ConsortiumConsortium Long TermLong Term Low ResourcesLow Resources

Project Joint Project Joint VentureVenture Short TermShort Term Medium Medium

ResourcesResources

Joint VentureJoint Venture Long TermLong Term High High ResourcesResources

MergerMerger Long TermLong Term High High ResourcesResources

AcquisitionAcquisition Long TermLong Term High High ResourcesResources

AffiliateAffiliate Various TermsVarious Terms Low ResourcesLow Resources

Joint Venture: Estee Joint Venture: Estee Lauder and International Lauder and International ShoppesShoppes Goals: Ensure Sell through of productsGoals: Ensure Sell through of products Benefits: Shared costsBenefits: Shared costs Roles:Roles:

International ShoppesInternational Shoppes: : Internal support structureInternal support structureEstee LauderEstee Lauder: : External Support StructureExternal Support Structure

Definition of Resources: wages, Definition of Resources: wages, commission base, merchandising tools, commission base, merchandising tools, store design, product store design, product

In conclusion….In conclusion….

We never want to lose by a nose, We never want to lose by a nose, only win by a mile!only win by a mile!