MB107 Executive Presentation

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MB107 Executive Presentation
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Orientation Meeting Agenda

• Residential Life Apply the Skills You Learn
  Opportunity
• Whos Who in the MB107 Program
• What is the Executive Presentation
• Dry Run and EP Specifics
• PPR Gucci Relationship, News, Case
  Questions
• Analysis and Strategy Development
• Economic Logic/Basic Financial Estimates
• Team Dynamics Project Timeline
• Student Perspective
• Semester Timeline

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Whos who in MB107 Program
MB107 Faculty Coordinator Professor Timothy
Harper MB107 Faculty Professors Balevic and
DAbate MB107 Student Coordinators Juliet Kaye
and Jordan White MB107 Coaches
Responsibilities Facilitators, Advisors,
Leaders Negotiate the Relationship MB107
Task Specialists Management and Business
Faculty And Introducing Chris Alexander,
Reference Librarian (Introduction to the
Library)
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What is the Executive Presentation?
Outcome Strategic Plan for Gucci Strategic
Recommendation Financial Analysis
Projections Detailed Marketing Plan Formal and
Professional Presentation Your Role Junior
Executives of Gucci Your Audience Senior
Executives from Gucci (actually executives from
across the country) Formal Presentation 20 -25
minutes visual aids and hand-outs encouraged
Question and Answer 12 15 minutes Senior
Executive Evaluation Consensus - 10 minutes
(students leave room at this time) Feedback
Session 5 7 minutes (you will receive a TEAM
GRADE during this time)
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Dry Run and EP Specifics

• Dry Runs, March 24, and 25 (each team will be
  assigned a one-hour time slot)
• Minimal Preparation Strategic Concept,
  Strategic Recommendation,
• Basic Financials,
  Basic PowerPoint
• What is involved
• presentation in front of student execs and MBD
  faculty
• solid preparation will yield quality feedback
• use feedback to refine and enhance presentation
• Presentation Day Friday, April 30, 2010
• Courtyard Marriot
• Assignment sheet outlines main tasks (Do not
  ignore it!)
• You must update the case to April 30, 2010.

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Executives Evaluation

• Review Executives Keys to Success on Course
  Webpage
• Review Evaluation form that will be distributed
  prior to Dry Runs
• Presentation Evaluations are not unlike
  Interviews
• Ultimate Goal is reliability and validity!
  However,
• Human perception involved
• Subjective judgments are being made
• People will be people
• Imperfection is the rule rather than the
  exception

Appreciate the Executives This is not their day
job!!!!!!
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PPR Company Profile

PPR Uniting luxury and distribution, PPR is one
of the rare groups to mix luxury and
distribution. In the field of luxury with Gucci
Group, PPR is the world's third largest player
with prestigious brands such as Gucci of course,
as well as Yves Saint-Laurent, Sergio Rossi,
Balenciaga, Bottega Veneta, Bédat Co, Stella
McCartney, Alexander McQueen, Boucheron, who
design, make and market fashion articles and
leathercraft items, perfumes, cosmetics, beauty
products, watches, and spectacles. In the field
of distribution the group is also active in
famous main street brands in the world of
fashion, beauty, home furnishings, culture, and
technologies. To name a few, there are Redcats
(Redoute, Empire, Chadwiks of Boston...), the
third largest home shopping company in the world,
Fnac (number one in France in the distribution of
cultural products), and Conforama, the second
largest global entity in household equipment. We
must not forget CFAO, specialists in automobile
and pharmaceutical product distribution in Africa
and French overseas territories. PPR, clear
thinking in a diversified world!

http//uk.finance.yahoo.com/q/pr?sPP.PA
Organizational Structure - See Page 10
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GUCCI Company Profile

• Gucci Group, an Italian company with a Dutch
  address that sells French fashion, does quite
  well in Japan, too. Offerings include handbags
  and other leather goods, shoes, ready-to-wear
  clothing, cosmetics, skin care, jewelry, and
  watches. Gucci family squabbles and imprudent
  licensing once nearly doomed the firm. New
  management revived it with fresh product lines
  and stricter licensing, as well as heavy
  investing in its Asian presence. Gucci operates
  about 425 stores worldwide and wholesales
  products through franchisees and upscale
  department stores. French retailer PPR purchased
  almost all of the remaining shares in the company
  in 2004, taking its interest up to 99.4.

GUCCI reigns as the Most Coveted luxury brand in
the world Chanel and Calvin Klein tied for
second place in Nielsens 48-country global
online survey that was conducted in November
2007. (www.luxuo.com)
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PPR Divisions Structure Financial Breakdown

• Fnac
• Redcats
• Conforama
• Cfao
• Puma
• Luxury Goods Division (Gucci Group)
• Gucci (Flagship Brand of the Luxury Division)
• Bottega Veneta
• Yves Saint Lauren
• Other Brands in Luxury Division

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www.ppr.com Sample Available Financial
Information

• PPR Organizational Chart and Ownership Share
• PPR Financial Statements
• Certain Financial Figures for Divisions
• Contribution of each brand to Gucci Brand (Luxury
  Division) to Gucci Group Recurring Operating
  Income
• http//www.ppr.com/datauploadfiles/Mark20Lee2011
  20October20-2010.pdf (2006 Mark Lee CEO
  Report)

Gucci's Mark Lee to Step Down Gucci's CEO Mark
Lee to Step Down by WWD Staff Tuesday September
16, 2008
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In the News PPR, Gucci and Luxury Brands
François-Henri Pinault, chief executive of PPR SA
is embarking upon a new plan to sell the
company's European retail divisions, including
the popular electronics retailer Fnac and the
Conforama discount furniture stores in order to
focus entirely on global consumer and luxury
brands, such as its high-end Yves Saint Laurent
and mass-market Puma labels. As well as listing
CFAO, he plans to sell Conforama, Fnac and La
Redoute, a catalogue business. Wall Street
Journal 11/26/2009 The Economist
11/16/2009 PPR offers 7.1 billion for
Puma Target's shares trading atop offer price on
hopes for new bid Marketwatch April,
2007 European Luxury Goods Risk Cachet With
China Focus Bloomberg Dec. 10, 2009
The financial one (challenge) is that the 235
billion luxury market has taken a dive as
consumers from Rome to Rodeo Drive slam their
wallets shut and high-end department stores,
including Neiman Marcus and Saks Fifth Avenue,
slash prices to reduce stocks. Consultancy Bain
Co. estimates that global sales of luxury goods
dropped between 15 and 20 in the first half of
this year and will be down by 10 overall in
2009. Fortune Sept. 14, 2009

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Analyzing the GUCCI Group 2009 Case

• Analyze the Gucci Groups corporate strategy
  using the elements of the Strategy Diamond?
• Discuss the Gucci Groups position regarding
  vehicles such as licensing and acquisitions at
  the time of the case? What driving forces
  influenced Guccis judgments regarding the
  efficacy of various vehicles?
• Identify and discuss the major issues related to
  management conflict at Gucci?
• Discuss the pros and controls of a corporate
  structure in which each brand has control over
  its own label?
• What key macro-economic factors must Gucci attend
  to?
• Provide a brief competitor analysis in the luxury
  market from the information presented in the
  case?
• How should Gucci and other luxury brands respond
  to an economic crisis?
• Offer a strategic recommendation for Gucci
  focusing on arenas, vehicles, differentiation,
  and staging?

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Guccis Current StandingMajor Issue
Identification
The Executive Presentation Where to Start?
The case represents the foundation of your
analysis.
Two Key Slides to include in your
presentation 1. The key challenges/opportunities
/issues facing Gucci are 2. Our strategy
addresses these by (explain how)


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Situational Analysis Leads
to Strategy Development

• External Analysis
• General/macro-environment
• Porters 5 forces
• Industry life cycle
• KSFs
• Value chain
• Competitor analysis
• Strategic group mapping
• Market segmentation
• Response profile

• Select Optimal Strategy
• 5 elements
• Arenas
• Vehicles
• Differentiators
• Staging
• Economic logic

Strategic Options (Trade-offs)

• Internal Analysis
• SWOT
• Core/distinctive competencies
• Internal value chain

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Strategic Recommendation
must be Comprehensive

• Arenas
• Which product categories?
• Which market segments?
• Which geographic areas?
• Which core technologies?
• Which value chain emphasis?

• Economic Logic
• Lowest costs via scale advantages?
• Lowest costs via scope and
• replication advantages?
• Premium prices due to
• unmatchable services?
• Premium prices due to proprietary
• product features?

• Vehicles
• Internal Development?
• Joint Ventures?
• Licensing/Franchising?
• Acquisitions?

• Staging
• Speed of expansion?
• Sequence of initiatives?

• Differentiators
• Image?
• Customization?
• Price?
• Styling?
• Product Reliability?

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Financial Target Gucci

• Refer to the MB107 Financial Template Sheet
• The template will be available very soon!
• PPR 2009 Annual Report Release February 18,
  2010
• Your strategic recommendation must contribute 90
  million Euros () in operating income to Guccis
  baseline Operating Income by 2014.
• Your recommendation can be a 3-5 year plan.
• It will help to project Guccis Operating Income
  in 2014 in order to establish a baseline.
• Included in Financial Template
• PPR 2009 (Half-Year), 2008 and 2007 Financial
  Performance
• Gucci 2009 (Half-Year), 2008 and 2007 Income
  Statement Estimates (Based on PPR Segment Data)
• 2010 2014 Financial Projections Template
• Income Statement and Revenue Growth Assumptions

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Financial Analysis Projections

• Strategy gets the plane started, the numbers keep
  you in the air!
• Absolute Performance Relative Performance
  (Strategic Group Map)
• SWOT Key Success Factors PPR/Gucci vs.
  competitors
• Current and Future Standing on Key Financial
  Variables - Margins

• Financial Projections
• Revenue, Cost Of Sales, Gross Profit, SGA and
  Operating Income
• Dont be afraid to lose a little money in years
  one and two
• Project out 3 - 5 years

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Economic Logic

• Cash Flow - What is your funding source?
• Operations and/or Investment and/or Financing
• Qualitative Explanations for Quantitative
  Analysis
• - Offer a coherent explanation of your finances.
• - Realism provide a good story
• - Use external sources to provide evidence
• Explain and justify the assumptions that underlie
  your numbers.
• Growth Rates revenues, customers, product
  sales/profits, new
• product
  sales/profit
• Advertising explain how proposed advertising
  will impact
  
• sales and
  profits dont just provide numbers,
• provide evidence!

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Detailed Marketing Plan
Guccis Current Marketing Mix Continue or
Change?
(Consistent with PPR/Guccis Vision Mission?)
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Detailed Marketing Plan

• Product-Market Opportunities

(Consistent with PPR/Gucci s Vision Mission?)
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Junior Executive Team

• Create SYNERGY Ride MOMENTUM
• Apply Individual and Team GOAL-SETTING
• Be ACCOUNTABLE to your team
• COMMUNICATE EARLY, OFTEN AND EFFECTIVELY

Patrizio di Marco, 46, was appointed Gucci's
President and Chief Executive Officer in January
2009
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Junior Executive Team

• MB107 Teams Fail When Team Members or
  Individuals
• Dont develop competencies from the course
• Engage in Social Loafing
• Fail to take the advice of Others Seek
  Intervention When Needed
• Emphasize relationships rather than the task

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Team Assignment Project Timeline
Phase 3
Phase 1
Phase 2
Revise presentation based on
dry run feedback

• Groups formed Social Event
• Begin situational analysis
• Develop strategy

• Prepare
• presentation for
• dry run

Friday, April 30
Feb. 15 March 20
NOW!
April 1 April 24

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The Student Perspective
Jordan and Juliet, what do you think?
www.brandchannel.com
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Resources
MB107 Coaches Task Specialists
MB107 Faculty Business Faculty
Christine Alexander Library Resources
MB107 Home Page
Ask former MB107 students this question If we
had to do it all over again, we would..
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A Few Final Notes

• BE PREPARED
• Address Technology needs prior to April 30
• (multi-media Apple-projector connection
  issues laptop issues disks (multiple flash
  drives etc. etc.)
• Assume No Internet Access via Hotel on Friday,
  April 30
• equipment failures the show must go on Can
  you present without PowerPoint?
• travel arrangements
• Know the time of your presentation (its a tight
  schedule)
• Perform Library Research Assignment
• Check your Skidmore e-mail multiple times each
  day!!

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WORK HARD AND HAVE FUN NOW SHOWING MB107 FALL
2008