...Reinventing Retail Banking Series Evolving Models of Retail Banking Distribution Capitalizing on changes in channel usage Produced by the Deloitte Center for Banking Solutions Reinventing Retail Banking Generation Y Reinventing Retail Banking Series Consumer Trust Reinventing Retail Banking Series Catalysts for Change The Implications of Gen Y Consumers for Banks Building Consumer Trust in Retail Payments Laying a Solid Foundation Produced by the Deloitte Center for Banking Solutions Produced by the Deloitte Center for Banking Solutions The traditional retail bank is at an inflection point. The needs and expectations of customers are changing as quickly as the competitive landscape. Customers are demanding seamless, multi-channel sales and service experiences and not consistently receiving them. Simultaneously, other financial institutions and non-traditional players are looking for opportunities to invade this space or to redefine it through disruptive innovation. The result is forcing banks to examine a more balanced, integrated approach to the customer experience and growth. In this series, entitled Reinventing Retail Banking, the Deloitte Center for Banking Solutions looks at how banks must move beyond simply meeting their profit and growth goals to delivering more completely on the customer experience. Specifically, these articles will focus on: understanding customers needs; identifying emerging and profitable customer segments and strategies...
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...Q1. Value proposition Walmart’s value proposition is based on offering Everyday Low Price. This is the core of Walmart’s Business Model, and the rest of the key features of Walmart’s Business Model are aligned to keep the everyday low price. This proposition implies that the customers do not need to wait for sales to have the best deal possible. Besides, not only the sells convenience is associated by providing the wide range of products and services to choose from, but also with one-stop is possible to make all the shopping needed, from groceries to pharmacy. Walmart’ customers save time and money Distribution channel To deliver its value proposition Walmart communicates with and reaches its customer segments with its distribution channels which are owned and direct, and brings higher margin. Walmart also is corresponding with its customers mainly through mass media and other ways which have a low cost, such as internet. Customer relationships Walmart establishes a customer relationship is based on self-service and automated and towards co-creation of some products once it is possible. Walmart tends to reach to the mass market toward mass customisation. Walmart’s customers can be divided into three groups: “brand aspirations”, people with low incomes who are obsessed with brand; “price-sensitive effluents” wealthier shoppers who love deals; and finally “value-price shoppers” who like low prices and cannot afford much more Strong buyer-supplier relationship Walmart...
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...Supply chain model at Amul GCMMF- Gujarat Co-operative Milk Marketing Federation MUs- Member Unions VCs- Village Co-operatives The farmers bring the milk to the village cooperatives in their bicycles. The milk is then channelized to the member unions located in various states in India. These member unions are independent organizations involved in the process of milk production. The head office of GCMMF is located at Anand. The entire market is divided into five zones. The zonal headquarters are located in Ahmedabad, Mumbai, New Delhi, Kolkata and Chennai. Moreover there are 49 depots located across the country and GCMMF also caters to 13 export markets. Amul has an excellent distribution channel. As milk is a perishable product and Amul is spread all over India. It has a robust logistic system consisting of milk vans, tanker lorries and rail wagons to supply its finished products to various parts of the country. Distribution channel in Amul FARMERS FARMERS VCs (without chilling units) VCs (without chilling units) CONSUMERS CONSUMERS CONSUMERS CONSUMERS Retailers Retailers Home delivery contractors Home delivery contractors Wholesalers/ C&S Wholesalers/ C&S Warehouses Warehouses Chilling units Chilling units Milk processing units Milk processing units Local residents Local residents Local Restaueants Local Restaueants VCs (with chilling units) VCs (with chilling units) First of all the products are stored with the warehouses...
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...2/20/12 Business Concept By: S. Arbaaz Mehdi BUSN 495 Norbert Golembiewski Business: Unitus Entertainment Type of Business: Event Management Company Who is the customer? Our customers are anyone and everyone who is a fan of music, who would love to listen and see the performances of live music artists. In addition; they are also individuals, private firms, and corporate companies that need service in dynamic media presentations and unforgettable events. We offer a unique opportunity to bring various artists of different music genres who perform together leaving the audience with a lasting impression. What is the value proposition? When you work with Unitus Entertainment, you work with quality people who have the experience and imagination to bring energy, life, and entertainment. Our approach is straightforward to leave the audience with a lasting impression. We create a grand event by great ideas that drive results, cost effective budget, business transparencies, legal proceedings, and outstanding client services. What is product/service being offered? Music Entertainment Events: * Fair and festivals * Concerts * Parties (club, beach, hotel) * Corporate Entertainment On Site/Others: * Venue Selection and Procurement * Theme Design * Lighting and Sound * Photography and Video Production * Booking Artist * Promotion and Marketing * Site/Venue Inspection & Selection * Full Service Travel Arrangements (Air, Ground...
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...AMOREPACIFIC I. ACTUAL ACTIVITY MAP AmorePacific- is the leading Korean cosmetics company, established in 1945. Since that time the company presents its unique value and bring the image of “ASIAN BEATY” to global customers. The activity plan was prepared based on the four main sustainable competitive advantages over their rivals. * Large and relevant portfolio * Value-adding innovation * Wide-distribution channel * Asian- beauty image To start the analysis we would like to mention that all these 4 competitive advantages is interrelated among each other. It means that Asian-beauty Image is highly dependent from value-adding innovation that company do in order to sustain and develop that image, the innovation plays a big role in large and relevant portfolio, as due to innovation the researchers established new products and targeted to different kind of customers and their tastes, moreover large, strong and relevant portfolio helps distribution channel to promote and sell the high-quality products. Asian Beauty Image: The activities such as High-quality products, Natural and Organic ingredients, Korean footprint and advertisements with famous artists contributed to the competitive advantage of Asian beauty image and are consistent and reinforces each other. Korea is very well known through the whole world due to the natural beauty of people, healthy skin, high-quality products and famous singers and actors. To secure quality and safe natural ingredients...
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...solution to confirm that the delivery expectations have been met. IBM does this using existing delivery methodologies, delivery issues- single point contact, delivery insight reviews, teams, and delivery rewards and recognition. * Confirm- client value and experience to confirm the use as intended by the client, this is done by using ‘client value assessments’ such as transaction and relationship surveys as well as a client care program. IBM believes that by implementing an end to end method such as this and analyzing the buying behaviors of their customers they will be able to develop and implement value creation and thus create value for the client. 6.2. What key activities do our distribution channels require? IBM reaches its customers through various communication and distribution...
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...and venialities on its manufacturing and distribution system. Giorgio Maggiali as director of logistics trying to implement idea of JITD (Just-in Time Delivery) so that Barilla’s own logistics department could manage more effectively delivery quantities and meet end consumer’s needs and more evenly distribute the workload on its manufacturing and logistics systems. Giorgio Maggiali after couple of years of efforts to implement the idea has not been successful and could not make significant progress. Problems to implement JITD The problems and weaknesses Giorgio Maggiali has to implement the JITD are: • Barilla’s distributors unwilling to support the idea as they do not want to give up their authority to place and order and lose control over it • Distributors reluctant to provide sales data upon which Barilla could forecast demand and make decisions to improve delivery and manufacturing, as a result Barilla is relying on distributors demands, which is having bullwhip effect for Barilla. • Barilla’s own marketing and sale people resisting the idea. Bullwhip Effect: Bullwhip Effect is a phenomenon in supply chain where distorted information is passed through large variations and swings in demand Barilla’s Distribution system: Barilla has divided its product line into Dry which represents 75% of total sales and Fresh 25% of sales. • Fresh products are shipped through Barilla’s central distribution centres. • Nearly two-third of dry...
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...SAMPLE growth process toolkit Distribution Channel Optimization Accelerating Growth through Unbiased and Ongoing Partner Evaluation, Selection, and Management SAMPLE INTRODUCTION Growth through Distribution Channel Optimization A recent study determined that high-performance businesses (i.e., the 10 percent that outpace competitors regardless of economic conditions) “excel in the development of meaningful customer insights and practical ways to put those insights into action.” 1 They understand what their customers want, and they know how to deliver solutions that customers will buy. An unwritten, but nonetheless significant, extension of this idea is that they not only know what customers will buy, but where and how they want to buy. In short, no company is successful for its insights alone. Success ultimately depends upon the effectiveness and reach of its go-to-market strategy. Distribution channel optimization is therefore a critical ingredient to sustaining growth through a rigorous customer focus. ∗ D D F F At their most basic level, distribution partners enable suppliers to deliver goods or services to end users, and distributors’ reach significantly influences the extent to which suppliers can engage with customers. On a more meaningful level, distribution partners provide customer service in areas where suppliers cannot or do not (e.g., financing, insurance, training, maintenance, repairs). Taken together, the two deliver an enhanced customer experience...
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...SITUATION ANALYSIS In 1984, at the age of 19, Michael Dell founded Dell Computer with a simple vision and business concept; that personal computers could be built to order and sold directly to customers. Michael Dell believed his approach to PC manufacturing had two advantages: (1) bypassing distributors and retail dealers eliminated the markups of resellers, and (2) building to order greatly reduced the costs and risks associated with carrying large stocks of parts, components, and finished goods. Now, that concept picked up and arrived at Dell being the multi-billion dollar leading computer manufacturer in the world with 2001 revenues reaching $32 Billion and return on investment of 335%. However, things started to plummet by 2001 and Dell experienced, for the first time, a -10% decline in sales and unprecedented cutthroat competition from HP and IBM. Dell Corp. had to make difficult decisions on how to sustain its profitability in light of its broad product portfolio - PCs, workstations, servers and storage products for a broad cross-section of customers in the United States and worldwide. Fueled with ambition and determination, Michael Dell is set to maintain his company's leading position in these tough times. Dell, facing a predicament of whether they should maintain their strategic course or fundamentally change it in order to achieve the targeted growth rates, managed to acquire three important strategic options: 1) Focus only on the four major core products (Desktops...
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...Five Force Framework Threat of new entrants Bargaining power of suppliers Competitive rivalry Bargaining power of Buyers Threat of substitutes (1)Market Structure No. of players. Demand / Supply Market Share (2)Market Conduct (actions) Strategies Reactive/ Proactive (3)Market Performance (financial) Intra industry competition All the components of five force model have impact on these three levels of intra-industry competition Entrants 1. Economies of scale e.g, benefits associated to the bulk purchasing. 2. The high or low cost of entry, cost of latest technology 3. Ease of access to distribution channel (Ex: Sony faced in India from BPL, Videocon; Case of Castrol and Toyota ) 4. Cost advantages not always related to the size of company e.g. personal contacts or knowledge that larger companies do not know (Learning curve effects) 5. Will competitors retaliate? 6. Govt. action. 7. How important is differentiation? Entry barriers Govt. policy related (Coke, FDI in Retail ) Technology related (Steel, Thermal, Aluminium) Marketing related ( Distribution, Contacts, Differentiation ) Ex: Control, Sony could overcome the entry barrier The product categories and the entry barriers ( Cigarette as a Product category and its marketing and technology related entry barriers) Threat of Substitutes This is High where: • There is Product to Product Substitution The Power of Buyers •This is low where these are few, large players...
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...The Long Tail The phrase The Long Tail was first coined by Chris Anderson in an October 2004 Wired magazine article to describe certain business and economic models such as Amazon.com or Netflix. Anderson later extended it into the book The Long Tail: Why the Future of Business is Selling Less of More (2006). Businesses with distribution power can sell a greater volume of otherwise hard-to-find items at small volumes than of popular items at large volumes. (The original term is a military one, describing the logistic chain of support an army required: it has been said there is a "long tail" leading from rear-area supply centres up to an army's "teeth": the fighting forces at the front.) Anderson argued that products that are in low demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters, if the store or distribution channel is large enough. Anderson cites earlier research by Erik Brynjolfsson, Yu (Jeffrey) Hu, and Michael D. Smith, that showed that a significant portion of Amazon.com's sales come from obscure books that are not available in brick-and-mortar stores. The Long Tail is a potential market and, as the examples illustrate, the distribution and sales channel opportunities created by the Internet often enable businesses to tap into that market successfully. An Amazon employee described the Long Tail as follows: "We sold more books today that didn't...
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...1. McDonald’s McDonald's had one of the best logistics models in India. To maintain consistency and quality of its products, McDonald's shipped all the raw materials — lettuce, patties et al to a cold storage close to the main market. Based on a daily demand schedule that was prepared a day in advance, the required amount of raw material was transported to individual outlets. 2. Subhiksha Inventory management Subhiksha has a centralized purchasing system. This eliminates multiplicity of billings, which would occur if the stores were to make independent purchases. Subhiksha has 3 separate godowns for stocking Pharmacy products, unbranded groceries and branded FMCGs. It has a fleet of 10 tempos, which supplies its stores once a day. As the discount format requires holding costs to be at a minimum all the stores are connected in an intranet to facilitate inventory planning. Also spot payments made, helped to get cash discounts to the company. 3. Field Fresh Distribution Strategy It follows a strategy of minimum suppliers to take advantage of economies of scale (in purchasing and supply logistics), reduced overheads and control requirements, and easier vendor development. Food World works on the hub-and-spoke model. A hub is typically of 50,000-60,000 sq ft in area and serves about 30-40 stores in a radius of 30 km .Creation of Regional Hubs facilitates over 90% central distribution .The remaining 10% (mostly perishable items like fruits and vegetables, bakery etc)...
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...behind Zara's success were the simple business model (vertically integrated with short cycle times) ensuring high speed and design flexibility. Among all its chains, Zara is the most profitable and internationalized chain with over 500 stores in 30 countries (Exhibit 10:case) comprising ~40% of Inditex's store. However it contributed over 76% of Inditex's sales and over 85% of Inditex's EBIT (FY01) which clearly shows its operational efficiency. Issues Related to Product Development 1. High Capital Requirement (Low Asset turnover): Unlike its competitors, Zara owned much of its production and most of its stores. This led to the company having very low RoA compared to its competitors since it had to invest in its own factories (~20%) Particulars | Gap | H & M | Benetton | Inditex | Net Margin | -0.06% | 9.60% | 7.05% | 10.47% | Asset Turnover | 1.82 | 1.96 | 0.74 | 1.25 | Return on Assets | -0.11% | 18.78% | 5.25% | 13.07% | Moreover its optimistic revenue growth targets of 20%+ with like to like sales expected to witness only 5% to 7% growth meant that any new product had to be sold through additional expenditure on increased selling space. Recommendation: On the cost front, investments in assets can be minimized by a. Leasing out excess capacity : Zara can supply other manufacturer's from the excess capacity it has in its present and / or potential factories including the centralized distribution system (which runs 0.5 times capacity) b...
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...The Research Process Sequence of steps in busieness research Formulate Problem • Decision Problem • Research problem Dermine Research Design • Explorative research • Descriptive research • Cusal research Dermine data Collection Method • Secondary Data • Primary data Design data Collection Forms • Quantitative Data • Qualitative Data Design Sample and Collect data • Sample Frame and sample • Probability versus nonprobability sample Analyze and Interpret Data • Editing/Quality assurance of data • Coding • Tabulation • Data Analysis Prepare the Research Report (proposal) • Structure • Scientific Reqirements/Theory/Models • Literature Confer Exhibit 3.1, page 50 Decision Problem and Research Problem Drivers for problem formulation: 1. Unaticipated change, basically in the environment of the focal firm (suppliers,competitors, customers) 2. Planned change (estimation, effects, outcome) 3. Serendipity (random ideas or information) Differetn Problem Levels: 1) Individual orientation, PSYCHOLOGY 2) Individual-individual, SOSIAL PSYCHOLOGY 3) Individual and group, ORGANIZATION THEORY, ORGANIZATION PSYCHOLOGY 4) Group/department, ORGANIZATION SOCIOLOGY 5) Inter-group, ORGANIZATION...
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...Product segments include CSD (in decline stage), Diet CSD, Fruit Drinks, Milk Drinks, Energy Drinks, Sports Drinks, and Ready to drink coffee/tea. Entry into the snack food market was recently undertaken. 2. What is the current life cycle position of the industry? The Australian Non-Alcoholic Beverage Industry is at the mature stage of its life cycle. Whereas, the bottled water manufacturing industry is currently in growth stage. Major segments of the bottled water industry are still water and sparkling water. 3. What have been the key issues affecting historical and future industry growth? What was their impact or their likely impact and the overall assessment of the industry’s future growth? Key Issues influencing growth, using PESTEL Model (Analysis of industry as a whole including bottled water industry. Trends in broad industry also impact the bottled water industry) FACTOR ISSUE Historical / Future NATURE OF IMPACT (+ / = / -) Politics Import Tariffs – only affects water with additives (less incentive for competitors to enter market) Price of water low compared to other countries H/F H/F Positive Positive Economy Increase consumption per capita (unit of population)(Bottled water) Exports & Imports represent 5% of industry (these figures aren’t expected to change due to high cost of transporting heavy weight) F H/F Positive...
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