Charlottes Ltd Joyce Law Hilda Lam Leanne Li Danny Yip 1
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Charlottes Ltd
Joyce Law
Hilda Lam
Leanne Li
Danny Yip
1
Overview
Environmental Analysis
Competitive Strategy Analysis
Financial Analysis
Future Strategies
2
Objectives
Year 1: Improve internal weaknesses
Year 3: Attain a 10% annual profit growth
Year 5: Build a good reputation of Charlottes Ltd in Southeast Asia
3
Mission: “To make Charlottes Ltd the specialty store best known throughout SE Asia”
Unique selling proposition: Providing organized, professional and customized wardrobing service
Market position
Overview of Charlottes Ltd.
4
Strategic Planning Process
Mission
Objectives
Situation Analysis
Strategy Formation
Implementation
Control
5
Environmental Analysis
Competitive Strategy Analysis
Financial Analysis
Future Strategies
6
Situation Analysis
Porter’s Five Forces Model
SWOT Analysis
7
Environmental Analysis
Competitive Strategy Analysis
Financial Analysis
Future Strategies
8
BCG Matrix
9
Relative Market Share
High Low
Relative Market Growth
High Star - “Hold”
Relax Question Mark - “Build”
Lady & Missy
Low Cash Cow - “Harvest”
Time-out Dog - “Liquidate”
GEM Matrix
10
Business Strength
Strong Average Weak
Industry Attractiveness
High Winners (Grow
strongly) Winners (Grow
selectively) Question marks
(Divest)
Average Winners (Grow
Selectively)
Average businesses
(Hold)
Losers (Divest)
Low Profit producers
(Hold) Losers (Divest) Losers (Divest)
Critical Success Factors
Efficient, customized and personalized wardrobing service
Administration with professionals
Continuous positive cash inflow
11
Current Strategy
Maintain its market shares (Hold strategy) in the short run
Competitive advantage: Focused differentiation strategy
12
Environmental Analysis
Competitive Strategy Analysis
Financial Analysis
Future Strategies
13
Company Performance
14
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Retrun on Assets Profit Margin Functional Cost
Charlottes
Industrial Avg.
Company Performance
620
640
660
680
700
720
740
760
780
800
820
840
As 1000 of sales
Charlottes Industrial Avg.
Asset Utilization
Company Performance
Comparison with Projected Performance
Over projection
Over Acquisition of Assets
16
0
5
10
15
20
25
30
35
40
45
50
Sales
amount
(in $M)
Projected Sales Actual Sales
Environmental Analysis
Competitive Strategy Analysis
Financial Analysis
Future Strategies
17
Phase 1: Sustain local market share
Phase 2: Expansion - Total Man
Phase 3: Expansion - Singapore
Future Strategy: An Overview
18
Phase 1 Enhance efficiency
Accurate sales forecast
Assets utilization
Cooperate with TDC
Market penetration
Online wardrobing service
19
Phase 2: Total Man
Product
Gentlemen & Chill out
Price
Gentlemen - $2000/unit
Chill out - $800/unit
20
Promotion
Mass media & personal selling
Place
Retail outlet
21
Benefit of Total Man
Increase in profit
Better utilization of assets
22
Phase 3: Expansion to Singapore
Constant growth of Manufacturing, Wholesaling and Retailing
No. of Target customers: 600,000 people
Relatively high social status of women
Easy access to Singapore economy
23
Our focus: Market Development
Goals
Attain a profit growth rate of 8% per year
Increase exposure to Southeast Asia countries
24
Marketing 4P in Singapore
Earlier stage:
Product - All 4 brands
Place - Wholesaling & online services
Price - Quantity discount
Promotion - Invitation-only fashion shows
Marketing 4P in Singapore
Later stage:
Product - “Total Woman” programme
Place - Retail store
Price - Market skimming strategy, seasonal discount
Promotion - Direct marketing
26
Risk Assessment
General
Bad debt problem
Price fluctuation or termination of supply
Phase 1
Sudden increase in demand of raw materials
27
Risk Assessment Phase 2
Unsatisfactory market response of Total Man
Operation changes
Phase 3
Over-optimistic forecast
Overseas management
28
Cash Flow Statement: Phase 1
Start up 2007 2008
Beginning cash $60,000 $90,000
Capital Investment $190,000
Profit (Loss) $130,000 $160,000
Capital exp. $130,000 $100,000 $100,000
Change in cash position
$60,000 $30,000 $60,000
Ending cash $60,000 $90,000 $150,000
Cash Flow Statement: Phase 2
Start up 2008 2009
Beginning cash $50,000 $2,069,180
Capital investment $400,000
Profit (Loss) $2,169,180 $2,527,200
Capital exp. $350,000 $150,000 $160,000
Change in cash position
$50,000 $2,019,180 $2,367,200
Ending cash $50,000 $2,069,180 $4,436,380
Cash Flow Statement: Phase 3 Start up 2010 2011
Beginning cash $140,000 $130,000
Capital Investment
$1,100,000
Profit (Loss) $230,000 $350,000
Capital exp. $960,000 $240,000 $300,000
Change in cash position
$140,000 ($10,000) $50,000
Ending cash $140,000 $130,000 $180,000
Projection
2007 2008 2009 2010 2011
Cash Flow and Profit over 5 Year
Cash Flow
Profit
Thank You
Appendice
Budgeted Income Statement Projected Actual
Sales 48,940,000.00 100% 100%
Less: COGS 27,410,209.00 56.01% 55.70%
Gross Profit 21,529,791.00 43.99% 44%
Less: Administrative Expenses
1,036,800.00 43.99% 44%
Less: Sales Expenses
3,130,200.00 6.40% 7.70%
EBIT 17,362,791.00 35.48% 27.50%
Comparison between Charlottes and Competitors
Charlottes Industrial Average
Return on Assets 33.0% 37.5%
Profit Margin 27.5% 25.5%
Asset Turnover 1.2 1.5
Functional Cost as a % of sales
65.6% 70.6%
Asset Utilization 833 700.8
Phase 1 - Capital Expenditure
Startup 2007 2008 2009
Capital Expenditure
MIS $100,000 $30,000 $30,000 $30,000
Website $30,000 $10,000 $10,000 $10,000
MIS Maintenance
$50,000 $50,000 $50,000
Website Maintenance
$10,000 $10,000 $10,000
Total Capital Expenditure
$130,000 $100,000 $100,00 $100,000
Phase 2 - Capital Expenditure
Startup 2008 2009 2010
Capital expenditure
Interior Design $ 200,000 $ 50,000 $ 50,000 $ 50,000
Add. Assets $ 100,000 $ 50,000 $ 60,000 $ 70,000
Other $50,000 $ 50,000 $ 50,000 $ 50,000
Total Capital expenditure:
$ 350,000 $ 150,000 $ 160,000 $ 170,000
Phase 3 - Capital Expenditure
Startup 2009 2010 2011
Capital expenditure
Registration $ 10,000 $ 10,000 $ 10,000 $ 10,000
Interior Design $ 400,000 $ 50,000 $ 50,000 $ 50,000
Add. Asset $ 450,000 $ 100,000 $ 120,000 $ 150,000
Other $ 100,000 $ 100,000 $ 120,000 $ 150,000
Total Capital expenditure:
$ 960,000 $ 260,000 $ 300,000 $ 360,000
Phase 1 - Financing
Short term
Factoring
Long term
Reducing Inventory Levels
Reducing Expense
Phase 2 - Financing
Short Term
Bridging Loan
Long Term
Secure Loan
Phase 3 - Financing
Short Term
Reserves
Long Term
Asset Base Loan
Scenario Analysis
Income Statement
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