D2 Stategy Project - Gisela v1.4
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Transcript of D2 Stategy Project - Gisela v1.4
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8/7/2019 D2 Stategy Project - Gisela v1.4
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Competitive Strategy Team Project
Team D2
17 th March, 2011
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4. 0
5.1
5.2
7.1
7.9
8.8
9. 1
9.9
17 .1
19.1
Marry Hat
Primise
Shatis leather
Parissime iberica
Manufacturas teleno
Diseo y Fantasia
Eurocorset
Confecciones Ory
Selmark
Vilaseca
Sales (m)
The underwear industry in Spain
Industry growth stalling
Source: CITYC, con datos del Departamento de Aduanas .
In 2010 more than 313 million units were sold in Spain
10
236 262 275 288337 313
0
100
200
300
400
2005 2006 2007 200 8 200 9 2010
Millions units
Sales focused on traditional channel
39%24%
9% 12 % 9% 7%
40%
0%10 %20 %30 %
3%
-1%
1%
-1%
-15 %
12 %
10 %
-10 %
4%
24%
Margin
Proportion of sales by sales channel ()
Competition significant but not always profitable
Sales and margin by competitor in wholesale channel
Source: Isda (200 9)Source: Spanish Textile and Clothing Association
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Analysis of the underwear industry in Spain
Direct imports clients can godirectly to China to buy (onlybig ones )
Substitutes
Buyers
Many competitors
Traditional channel decreasing
Price competition
Rivalry Purchasing power
Access to distribution channel
Expertise needed (fashionindustry )
Barriers to Entry
Suppliers
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Diseno y FantasiaA broadening product line
Core private label business
Five product lines including
0
1
2
3
4
5
6
7
2005 2006 2007 200 8 200 9 2010
Private label Basics Play Suite
Evolution of volume sales by product lineUnits (millions )
A small business
Family owned business founded in 1 99 3
14m turnover 2010
46 employees
80% of revenues from Spain 20% of revenues from Portugal & Russia
Increasing focus on Gisela brand
Underwear (3 lines ) Swim wear Beach wear
Strong reliance on the traditional channel
All Gisela branded products sold throughmercerias small independent shops
Channels buy direct from D&F or throughwholesalers
Private Label sales direct to retailers
70%
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Diseo y Fantasas strategy
199 3 2005 2011
N o strategy
No differentiation No cost advantage
Differentiation within thechannel
New Management team Strategy built on existing capabilites
focus on design
???
Lead the reinvention of the channel from followers toleaders
1.
2 .
Start production in China to become costcompetitive
Copy what is starting to work on other channels:
Young design (Play ) Sofisticated desing (Suite )15 25 4535 55 65
7
60
16,000
500
Product : Cost(/unit )
Geography : Density (people/Km2 )
Customers : Age
2005 2011199 3
2005
Gisela 1993
V ictorias Secret 1993
Gisela 2008
V ictorias Secret 2011
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Activities
Design
Manufacturing
Selling
Distribution
Marketing
HR
Manufacturing
Selling
Distribution
Marketing
HR
Design of both product and packaging
Strong focus on fashion trends (trade and fashion fairsand traveling to other markets, mainly for pronto modacollections and private lable ) and market response (for sale by order in traditional channel )
Exclusive licences for the traditional channel
Different process for different clients:
Private label: client buys the whole colletion so allthe products in the colection have to follow acommon theme (in stores, they are displayedtogheter )
Gisela brand: for each collection they have to givetheir clients very different products , so there isless sense of collection
Design
Manufacturing
Selling
Distribution
Marketing
HR
Production in China
Cost competitiveness, no cost leadership
Top quality within China
Design
Manufacturing
Selling
Distribution
Marketing
HR
99% of Diseo and Fantasa business in B2B
100 agents sell to wholesalers and small stores
P ronto moda: selling what you already haveproduced High risk
Sale by order: produce what you have already soldLow risk
Direct sale for private label clients
Design
Manufacturing
Selling
Distribution
Marketing
HR
Own warehouse (plan to outsource in 1 year )
Distribution through three channels:
Direct (big retailers with private label products )
Distributors (for the small stores ) Internet (B2C . Current presence in Privalia and on -line shop in less than a year )
Design
Manufacturing
Selling
Distribution
Marketing
HR
High level of professionalism
Continous improvement (modernization )
Brand image
Comunication
Web
Design
Manufacturing
Selling
Distribution
Marketing
HR
Top talent (web develop by IESEs technical notes writers )
Specialization > when there are new needs(internationalization ) new positions are opened and filled withexperienced workers
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Activities inconsistency among market and strategy
Design
Manufacturing
Selling
Distribution
Marketing
HR
Low consistency withtheir channel
High consistency withtheir channel
H igh standars
REVISAR TITULO
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Diseo y Fantasas resources and capabilities
Tangible
Resources Capabilities Results
Financial: 1m profitLow debt (< 3M )
PriceCost
2nd best margin inindustry
Volume
Flexibility to invest innew opportunities
On -line channelExplore new ways tomarkets (pronto moda )Exclusive licences
Purchasing power
Quality/price # collections
Intangible 300 % increase insales in last 5 years
Expert (former chief designer of WS ) andengaged (owner ) design team
Network
Design excelenceCustomer Knowledge
Organizational Management team
Entreprenerial spiritInnovationMotivation
Vision
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The current strategy is unsustainable
0%
20%
40%
60%
80%
100%
2002 2003 2004 2005 2006 2007 2008 2009 2010
Evolution of the channel mix ( )
Traditional Chain Market
Gr. Almacen Department s tores V.P.C
Other
Traditional channel 5 8% 39% Markets channel important butlow priced
Chains are winners Oysho, Womans Secret Etam Intimissimi
Internet growing but small
1Shrinking channel
2Increasing pricepressure Stagnant market following crisis Early commitment to seasonal orders leaves businesses with large
inventories to move
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D&F can focus on one of two strategies going forward
y Gisela has already started to pursue international markets
y Today it has presence in Portugal and Russia
y However, we do not consider this an strategic move primarily because:
2 Difficulty to develop valuable contacts (BTE )
2 Future tendency towards chains
O PTI ON 1 Further geographical Expansion
-
y Launch its own stores targeting a women between [35 55 years]
y The loss of traditional channel has been the gain of stores in terms of channels
3 There is a gap of unattended market below the high -end and the affordable markets
3 Diseo and Fantasa has some of the resources and capabilities needed to succeed on this market
3 Higher posibility to export the business model in the future
O PTI ON 2 Target another market through another channel in Spain
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We recommend that D&F enter the chains channel
Strategy: Enter Chains channel selling direct to customer
Growth channel with highest value
30-45 age category currently underserved, with maincompetitors focusing on younger markets
Leverages core competencies in design and innovation:Diseo y Fantasas existing design leadership combinedwith a focus on quality materials would enable adifferentiation within the channel
Concept proven in other countries
Requirements for success
Investment in branding
Investment in quality
High quality production partner
Key challenges
Financing availability
Lack of expertise in B2C channel
Increasing complexity
No second chances
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Potential competitive reactions
Customers: A ge
Product :Price (/unit)5 15 25 35 45 5565 75
55
15
45
35
25
Oysho
La Perla
WomensSecret Intimissimi
EtamD&F
? ?
Existing competition plays at the extremes of the market
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Q & A