Happy customers, Happy partners · 2018. 1. 11. · Happy customers, Happy partners Backward Integration Increase Waitrose market share Develop Online. Analysis. Strengths Analysis

Happy customers, Happy partners

A GROWTH PLAN FOR JLP

SA BRA CONSULT I NG TEA M - GGFBM

What can we do for the partnership in the wake

of Brexit & looking forward to 2028

HRMSupply

chainBusiness


Backward

Integration

Increase

Waitrose

market share

Develop

Online

Analysis

Strengths

Analysis Alternatives Recommendations Implementation Financials Risk Mitigation Q&A

Known for service

Known for quality

HRM as a strength

The company has a strong brand that should be utilized

Challenges - Brexit

➢What will happen to the costs of imported goods?

➢Where can the company recruit warehouse workers?

➢What is the best format for the supply chain?


Brexit imposes multiple threats

Challenges – The future

What will the work force look like in 2028?

Robotics instead of people, online commerce continually growing


Looking ahead, we must be pro-active and not reactive

Competition – Department stores

Fragmented stores, fragmented competition


The competition in department stores is fierce

Mark’s & Spencer’s

Harrods

Dickens

(electronics)H&M (fashion) Nike (sports) Etc.

Competition – Department stores

Online


Online retail is the place to be

Amazon and Hellofresh heavy competitors

- They have no stores to upkeep

- Both are big enough to endure change

Waitrose


Waitrose is a good investment for the future

➢ Quality food

➢ Agile store concept

➢ Fitting local sustainable and

healthy trend

66%

34%

Sales in the partnership

Waitrose Others

Waitrose - Competition


Waitrose has room for growth in this segment

28.10%

16.50%15.60%

10.90%

6.20%

6%

5.30%4.50%

Market share

Tesco Sainsbury Asda Morrisons Aldi The co-operative Waitrose Lidl

“Bricks and Clicks”


Online is a valuable investment

6%

14%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2011 2014

Growth rate in online sales

➢ Online is growing and expected to continue to grow

➢ Waitrose allow pickup at various

locations

➢ Online requires great customer service

Value Chain


There is room to grow within the value chain

Farm

Suppliers

Manufacturing Logistics Stores

Alternatives

Preserve values and expand

Core values

Business fields

Customer service


Re-think business

ownership

Penetrate new

markets

Integrate core value

with market trends

internal

Core values

Job security for partners

Customer service


attr

acti

ven

ess

Happy partners happy customers

alternatives


inte

rnal

external

Re-think business

ownership

Changing partnership structure

Not core valueRisk failure

alternatives


inte

rnal

external

Penetrate new

markets

Penetrate European markets

Unknown marketNo answer for workers

Not answering tech trends

alternatives


inte

rnal

external

Reduce physical D.SOnline shopping

Training low wage workers-manufacturing and C.S

Focus on Waitrose business and increase market share

Backwards integrationWhite label

Sustainability& core values

Integrate core value

with market trends

Recommendation

HRMSupply

chainBusiness


Backward

Integration

Increase

Waitrose

market share

Develop

Online

Implementation

HRMSupply

chainBusiness


Backward

Integration

Increase

Waitrose

market share

Develop

Online

What?

➢ Purchasing manufacturing plants in:

➢ Dairy

➢ Grain

➢ Whine

➢ Veg packaging

Why?

➢Create jobs for the low wage partners:

➢ Manufacturing line

➢ Storage

➢ Packaging

➢ Etc.

Why?

Farms, dairy etc.

Suppliers

Manufacturing

Manufacturing

Logistics Stores

Self sustainable and protected from Brexit

Why?

➢ Creating higher margins

How?

➢ 2018 – 2020: Training of low wage workers

➢ 2018 – 2019: Purchasing 5 dairy and whine manufacturing plants

➢2020 – 2021: Purchasing 3 vegetable packaging plants

➢ 2020 – 2025: Purchasing 4 grain manufacturing plants

What?

➢ Focusing on Waitrose growth

➢ Improving online services

➢ Implementing technological change in stores

➢ Keeping excellent customer service

Why?

➢ New jobs in customer service and customer success

Why?

➢ Waitrose will enjoy strong value chain

➢ Waitrose is not strongly effected by Brexit

Why?

➢ Potential growth in market share 6.4%

➢ Strong revenue channel

How?

➢ 2018 – 2020: Training talents from low wage workers to customer service

➢2018 – 2021: developing online division with 3rd

party company

➢2020 – 2025: implementing technological change

What?

➢Develop online services

➢Decreasing department stores physical shops

Why?

➢ Shifting to jobs that will survive tech disruption

Why?

➢Answering world trend

➢Reducing physical department stores to lower expenses

How?

➢2018- 2021: improving online services through 3rd party company

➢ 2018-2028: gradually closing department stores and reducing them from 34 to 10

Financials

Financial management

We want to be as financially stable as we possibly can be

Labor employs capital, feel in control of our future

Make decisions in the long-tern, not reacting in short-term


Financial record2017 2016 2015 2014 2013

Gross sales total 11,374 11,018 10,942 10,171 9,541

Waitrose 6,633 6,461 6,508 6,119 5,763

John Lewis 4,741 4,557 4,433 4,059 3,777

Revenues total 10,026 9,748 9,701 9,027 8,465

Waitrose 6,245 6,086 6,135 5,753 5,416

John Lewis 3,780 3,662 3,565 3,274 3,049

Operating profit before

Bonus & items

(18.5) (80.7) (45.6) (65.3) (55.6)

Waitrose 253 232 237 310 292

John Lewis 243 250 250 226 216

Net finance costs (107) (96) (99) (94) (110)

Exceptional items 171 129 79 (43)

Profit for the year 353.5 223.2 143.5 101.6 101


Financial record

5,7356,111

470101.6

9701

10942

442 143

9748

11081

402 223

10026

11374

478 353

0

2,000

4,000

6,000

8,000

10,000

12,000

revenues gross sales oporating profit profit of year

2014-2017, in millions of pounds

2014 2015 2016 2017


Balance sheet

5,5245,857

6211 6,286

3,742

4,3334146 4230

485721

372 250

17811,518

2065 2055

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2014 2015 2016 2017


total assets total liabilities net debt net assets


Financial record

15% 11% 10% 6%

202

156145

89

0%

5000%

10000%

15000%

20000%

25000%

2014 2015 2016 2017


% of eligible pay partnership bonus


Financial recordCompany’s CAGR 2013-2017

37%

84700

9100093800

91500

86700

80000

85000

90000

95000

2013 2014 2015 2016 2017

no. of employees

no. of employees

Downward in profit 2015-2016 due to exceptional items

Fluctuations- decrease in partnership bonus

decrease in full-time employees


Financial time-line2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Backward

integration

3 dairy

farms

+ 1 wine

2 dairy

farms

Backward

integration

- 2

vegetable

farms

Backward

integration

- 3

vegetable

farms

Backward

integration

2 grain

fields and

processing

Backward

integration

2 grain

fields and

processing


White label

Move to customer services

Move to manufacturing

On-line dev.

32 30 25 20 10

Financial expenses time-lineexpense How much amount Time line

Dairy farm manufacturing acquisition- 1 unit 10,000,000 pound 5 units 2018-2019

Vegetable packaging acquisition- 1 unit 6,000,000 pound 5 units 2020-2021

Grain products manufacturing and processing

acquisition- 1 unit6,000,000 pound 4 units 2022, 2024

Winery acquisition- 1 unit 5,000,000 pound 1 unit 2018

Costumer service training - yearly 4,000,000 pound 3 years, 20,000 employees 2018-2020

On-line development and training- yearly 8,000,000 pound 2 years, 100 employees 2018-2019

Manufacturing training- yearly 8,000,000 pound 5 years, 1600 employees 2018-2022

White label design and development- yearly 4,000,000 pound Every year 2018-2028

Tech development and implementation 6,000,000 pound 5 years 2020-2024

total


Financial expenses time-line2018 What? 2019 2020 2021 2022

30000000 dairy 20000000 dairy 12000000 veg. pack 18000000 veg. pack 12,000,000 grain

5000000 winery 6000000 veg. pack 4000000 c.s training 8,000,000manufacturing training 4000000 c.s training

4000000 c.s training 6000000 grain 8,000,000

manufacturing training 4,000,000

white label developme

nt 8,000,000

manufacturing trainig

8,000,000 online dev. 4000000 c.s training 4,000,000


nt 6,000,000 tech dev. 4,000,000

white lable developme

nt

8,000,000manufacturing training 8,000,000 online dev. 6,000,000 tech dev. 6,000,000 tech dev.

4,000,000


nt 8,000,000

manufacturi

ng training

4,000,000


nt

59,000,000 total 56,000,000 total 34,000,000 total 36000000 total 34,000,000 total


Financial expenses time-line

2023 What? 2024

4,000,000white lable

development 12,000,000 grain

6,000,000 tech dev. 4,000,000white lable

development

6,000,000 tech dev.

10,000,000 total 22,000,000 total


Reducing 24 physical stores-

Saving 10,000,000 yearly

selling 24 physical stores-

Earning – 120,000,000

(each store 5,000,000)

Financial expenses time-line

6557 7211 8294 9953 1244216175

22645

32835

48596

72894

112986

6061 6018 5936 5938 5836 5712 5624 4499 3149 1889

94448

496 1194 2358 4015 4606 660610463

17021

28336

45447

71005

0

20000

40000

60000

80000

100000

120000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Chart Title

revenues expenses net profit

Risk Mitigation

Risks


Impact

Probability

Conflict with

workers

Loss of customers

New competition

Risk Mitigation


Impact

Probability

Conflict with

workers

- Incentivise workers with additional

benefits- Alternative jobs

through training

Risk Mitigation


Impact

Probability

Loss of customers - Offer discounts and

promotions- Strengthen marketing efforts

Risk Mitigation


Impact

Probability

New competition

- JV with competitors- Penetrate new

markets

HRMSupply

chainBusiness


Backward

Integration

Increase

Waitrose

market share

Develop

Online

Q&A


Documents

Happy customers, Happy partners · 2018. 1. 11. · Happy customers, Happy partners Backward Integration Increase Waitrose market share Develop Online. Analysis. Strengths Analysis