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Defining DiversityBullseye Consulting
Life is a Moving TargetOBJECTIVE: Obtain market saturation of the growing minority consumers in the United States
NPV: $14,777,521
Outline
Situation
Analysis
Strategy
Implementation
Financials
Beyond the Bullseye
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
• Great brand recognition• Strong relationship with community• Diverse employees• Target Sourcing Services• PFresh
• Minority market: 1/3 of US Population• Customized Marketing: Location& Ethnicity• Social Media i.e. Facebook • Minority Designers for Apparel • Cultural food produce
• Late to enter global market• Not international, brand recognition among
immigrants not strong• Low association with specific product
segments
• Large retailer already opening stores targeting specific ethnicity
• Current ethnic-specific stores already established
• Economy still in recovery
Strengths
Weaknesses
Opportunities
Threats
Demographics
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
San Fransisco
Los Angeles
Whites 48.5%Asians 33.3%Latinos 15.5%Other 2.7%
Latinos 48.5%Whites 9.6%Native American 11.3%Asian 3.2%
Understanding Our Guests
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Anne Chou
Anna-Maria
Young, well-educated, moderate-to-better income families
Median Age of 42Median Income of $60,00051% with college degrees33% with children
Consumer Behavior: Family Oriented, purchase things in bulk
Competitors Analysis
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Fred Meyer
JC Penney Kohl’s Sears Target
Product Variety
Product Quality
Experience
Price Low Low Moderate Moderate Moderate
Strategy Criteria
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Effectiveness
Brand/Quality
Community Outreach
Existing Synergy
Capital Expenditure
Decision Matrix
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Effectiveness Brand/Quality Community Outreach
Existing Synergy
Capital Expenditure
Full Integrated Store
Partner with Local Market
Online Only Integration
National Shift
Localization Integration
Localization Integration
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Food
Apparel
Cultural Holiday
In-Store Presentation
Localized Marketing
Cultural Products: Food
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Asian Hispanic
Cultural Products: Apparel
Focus on Minority Designers
National Jersey for World Cup 2014
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Cultural Holiday: Customization
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Gift Card liabilities: $ 422 million as of January 29th, 2011
Product Variation & Store Environment
Market Research Strategy
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
• Surveys (Online & Offline)• Test Product
Individualized Marketing Research
• Facebook• Website Cookies• Consumer Feedback
Consumer Demand Research
In-Store Presentation
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
• Center Piece In P Fresh Area• Target In-Store Catalog• Emphasize products during
cultural holiday
Localized Marketing
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Localized Online Ad
Ad Views on Online Video Site
Ethnic Food Page
Strategy Review
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
• Quick implementation timeline, advantage over slow competitors
• Geographic specific• Low-risk• Scalability
Great timing: include project in Canadian stores opening in 2013 (e.g. Richmond, BC, Canada)
Online marketing may not reach some market segments
Asian American market very diverse. May be hard to capture that market
Strengths
Weaknesses
Opportunities
Threats
Short Term Implementation Timeline
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Move to CA, FL, TX
Heavy Community Outreach
Targeted Survey & Ads
Rollout in 2 Locations
Saturate the 3 States
Re-evaluate
Nation Saturation
Move to Re-grow
Expand Premise
Move to Other States
M3 M9 M12 M15M6
Long Term Consideration
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Y 2013 +
Ethnic Fresh Produce
Target in Canada:
population is ethnically diverse
Predicted Cash Flows
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
3 6 9 120
1000000
2000000
3000000
4000000
5000000
Net Cash Flows
Net Cash Flows
Sensitivity Analysis
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
• 4% APR, Δ10% Purchases• $29,078,087 NPVBest Case
• 2% APR, Δ5% Purchases• $14,777,521 NPV
Initial Assumption
• 1% APR, Δ2.5% Purchases• $7,449,223 NPVWorst Case
Risks & Mitigation
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Slow Product Turn Over
Reduction of Product Quality
Increase in Cost
Start with packaged goods.
Last longer than fresh produce
Use of TSS to ensure product quality
Implementing project in multiple stores – reduce cost through
trade discounts
Summary
S i t u a t i o n | A n a l y s i s | S t r a t e g y | I m p l e m e n t a t i o n | F i n a n c i a l s
Minority Market Share• Demographics• Consumer Behavior• Competitors
Localization Integration• Food• Apparel• Presentation• Marketing• Cultural Holiday
Risk, Mitigation and NPV• Quality• Cost• $14.7 Million
Thank YouQuestions?
Appendices
L i f e i s a M o v i n g Ta r g e t
Presentation SlidesBeyond the BullseyeDemographicsUnderstanding Our GuestsCompetitors AnalysisStrategy CriteriaDecision MatrixLocalization IntegrationCultural Products: FoodCultural Products: ApparelCultural Holiday: CustomizationMarket Research StrategyIn-Store PresentationLocalized MarketingStrategy ReviewShort Term Implementation TimelineLong Term ConsiderationPredicted Cash FlowsSensitivity AnalysisRisks & MitigationSummary
TargetBrand RecognitionDistribution CenterImports WarehouseTarget’s Community Outreach
Understanding ConsumersCultural HolidayDemographics: CA, TX & FL
CompetitorCurrent Competitor Localization Efforts: My Macy’sCurrent Competitor Localization Efforts: Wal-Mart de Sup...
StatisticsHULUCash Flow Calculations
Brand Recognition
• “Expect More, Pay Less”• 97% American Consumer recognize the
bullseye logo as Target• Bullseye Dog is a trademark, and the
Bullseye Design and 'Target' are registered trademarks of Target Brands.
L i f e i s a M o v i n g Ta r g e t
Distribution Center
• Regional Distribution Centers: 26– 4 in CA– 2 in TX, etc
• Food Distribution Center for Perishable Food:– Phoenix, AZ– Lake City, FL – Ft. Worth, TX– Cedar Falls, IA
L i f e i s a M o v i n g Ta r g e t
Imports Warehouse
• Import Warehouses receive shipments directly from overseas manufacturers and suppliers. Merchandise is then sent from the Import Warehouses to the Regional Distribution Centers. Target currently operates four Import Warehouses.– Rialto, CA– Lacey, WA– Savannah, GA– Suffolk, VA
L i f e i s a M o v i n g Ta r g e t
Cultural Holiday
• Asian– February
• Chinese Lunar New Year• Tet Nguyen Dan (Vietnam)
– October• Diwali
• Hispanic– February
• 24 - Flag Day (Mexico)
– May• 5- Cinco de Mayo
L i f e i s a M o v i n g Ta r g e t
Demographics: CA, TX & FL
L i f e i s a M o v i n g Ta r g e t
People QuickFacts California Texas Florida USA
White persons, percent, 2010 (a) 57.60% 70.40% 75.00% 72.40%
Black persons, percent, 2010 (a) 6.20% 11.80% 16.00% 12.60%
American Indian and Alaska Native persons, percent, 2010 (a) 1.00% 0.70% 0.40% 0.90%
Asian persons, percent, 2010 (a) 13.00% 3.80% 2.40% 4.80%
Native Hawaiian and Other Pacific Islander, percent, 2010 (a) 0.40% 0.10% 0.10% 0.20%
Persons reporting two or more races, percent, 2010 4.90% 2.70% 2.50% 2.90%
Persons of Hispanic or Latino origin, percent, 2010 (b) 37.60% 37.60% 22.50% 16.30%
White persons not Hispanic, percent, 2010 40.10% 45.30% 57.90% 63.70%
Target’s Community Outreach
• Donate 5% of revenues to charities• Partner with schools and libraries• Community-based projects• Scholarship/sponsorship of minorities – i.e.
Hispanic Scholarship Fund, National Urban League
Our Recommendation:• Community projects in International Districts• Sponsor ethnic resource centers
L i f e i s a M o v i n g Ta r g e t
Current Competitor Localization Efforts: My Macy’s
• Customer-centric localization, 20 select geographic markets beginning in spring 2008.
• Focused on local customer needs and preferences• 13 of Macy’s top 15 best-performing geographic
markets in December were My Macy’s pilot districts• My Macy’s will be implemented nationally to new local
markets.• Conclusion: Largely successful. Similar implementation
plan of starting in select locations and expanding to new locations.
L i f e i s a M o v i n g Ta r g e t
Current Competitor Localization Efforts: Wal-Mart de Supermercado
• Opened 2 Supermercado de Wal-Mart stores in Houston and Phoenix in 2009
• The company also will be opening up new locations in Hispanic submarkets of Dallas.
• Mas Club, the Hispanic version of Sam’s Club
• Conclusion: Was successful. Creative retail strategy
L i f e i s a M o v i n g Ta r g e t
HULU
• 48.1 ads per viewer, over 50% more than the average for the top ten video properties by ads viewed
• Hulu now has 289 advertisers on board who all need to get their ads shown
• 224.3 minutes average per user• Users view ads every 4.66 minutes.
L i f e i s a M o v i n g Ta r g e t
Cash Flow Calculations
L i f e i s a M o v i n g Ta r g e t
Percentage Minority in
Target Market
Sales Volume Per Store Per
Day
Change in Purchasing
Number of Stores
Implemented