Download - Returning to Healthy Growth for Li & Fung GNP Group MGT0650 Consulting Skills for Managers
Returning to Healthy GrowthReturning to Healthy Growthfor Li & Fung GNP Groupfor Li & Fung GNP Group
MGT0650 Consulting Skills for ManagersMGT0650 Consulting Skills for ManagersProject Dummy Pack - RevisedProject Dummy Pack - Revised
Class 2 – Team EClass 2 – Team EChan, Chiu Kit JeremyChan, Chiu Kit JeremyLao, Teng Chong KelvinLao, Teng Chong KelvinMau, Ka Ying AdaMau, Ka Ying AdaNg, Kai Li NoraNg, Kai Li NoraYuen, Melissa CieYuen, Melissa Cie
Executive Summary
• To be updated
Situation
• GNP Group prides themselves as a market leader in gifts and promotion trading – “Your gateway to a World of Consumer Products”
• [ ] of customers serviced by [ ] of teams producing more than 30,000 sku per year and revenue of over USD$600 million per year
Complication
• The growth in GNP Group has been stagnant in recent years.
• After global economic crisis in 2008, the Group faces great threat from recruiting new customers and meeting sales budget.
• As on Sep 2009, the total order has dropped by [ ] % and the total YTD sales has denoted [ ] % decrease vs. year ago.
Question• How can GNP Group return to healthy growth?
Li & Fung GNP Group is facing problem in driving business growth…
Gift & Promotions (GNP Group)Alice Lai
Executive Vice President
Gifts Group Promotions Group
Avon
USA
(GG
1)Su
sann
a N
g, S
enio
r Vic
e Pr
esid
ent
Catalogue/Direct SellingSusanna Ng
Senior Vice President
Family EntertainmentJoe Maher
Senior Vice President
Specialty Stores
Avon
Inte
rnati
onal
(GG
3)El
len
Ng,
Vic
e Pr
esid
ent
Publ
ishe
rs C
lear
ing
Hou
se (G
G1)
Susa
nna
Ng,
Sen
ior V
ice
Pres
iden
t
Bath
& B
ody
Wor
ks (G
G2)
Alex
andr
a Au
, Gen
eral
Man
ager
Dis
ney
Stor
es (P
DP)
Rita
Li,
Vice
Pre
side
nt
Crac
ker B
arre
l (PD
Q)
Alex
andr
a Au
, Gen
eral
Man
ager
JoAn
n St
ores
- H
ardl
ine
(GG
4)G
eorg
e Ye
h, G
ener
al M
anag
er
JoAn
n St
ores
- S
oftlin
e (G
GJ)
Elle
n N
g, V
ice
Pres
iden
t
Star
buck
s (G
G2)
Alex
andr
a Au
, Gen
eral
Man
ager
Coca
-Col
a (G
G5)
Satt
e Ts
ao, G
ener
al M
anag
er
McD
onal
d (G
G5)
Satt
e Ts
ao, G
ener
al M
anag
er
Oth
ers
(GG
5)Sa
tte
Tsao
, Gen
eral
Man
ager
Organizational Chart:
The merchandising support teams of Li & Fung GNP Group are divided by customers. Each team is highly merchandising driven. There is limited communication and sharing in-between different teams.
Source: Li & Fung Internal Information
48% of the customers are not satisfied with the current mediocre sales process
Source of data: 2009 customer opinion survey by Team E Consulting Group
Customer Satisfaction Level in Different Service Attributes
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Sourcing Capability
Quality of Sales Staff
Product Quality
Product Design
Production Facilities
Account Service
Product Cost
Sale Process
% of Customer
Service Attribute
Very Unsatisfied Unsatisfied Somewhat Satisfied
Satisfied Very Satisfied
GNP should improve the sales process in order to resume healthy growth.
Source of data: Benchmarking study by Team E Consulting Group
Relationship of Customer Satisfaction Rating vs. AnnualGrowth Rate of Consumer Product Industry
-10%
-5%
0%
5%
10%
15%
20%
25%
40% 50% 60% 70% 80% 90% 100%
Customer Satisfaction Rating
Ann
ual G
row
th R
ate
Greater customer satisfaction ratings results in greater sales growth!
Company ACompany B
Company C
Company DCompany E
Company F
Company G
Company H
Company I
Company J
GNP Group should streamline its sales process in order to increase sales efficiency and capture 30% sales growth in 1 year.
The marketing process is not standardized, causing long turnaround time for customer pitching.
Communication on products is inadequate, results in limited product offering & untapped sales opportunity.
Historical data is not readily available. Many sales opportunity are not identified and captured.
• Merchandisers could not effectively pitch to customers with existing resources• Costs savings resulting from product modification not captured• Cross selling potential not captured due to unknown products by merchandisers
• Sales or product experience not shared preventing effective sales analysis/projection • Extension of preparation time resulting from inadequate data• Ineffective budgeting and trend analysis due to scattered information
• Inadequate resource to handle all customer request due to prolong marketing process • Customer satisfaction jeopardized due to variance in marketing quality
GNP should improve the sales process in order to resume healthy growth.
GNP Group should streamline its sales process in order to increase sales efficiency and capture 30% sales growth in 1 year.
The marketing process is not standardized, causing long turnaround time for customer pitching.
Communication on products is inadequate, results in limited product offering & untapped sales opportunity.
Historical data is not readily available. Many sales opportunity are not identified and captured.
• Merchandisers could not effectively pitch to customers with existing resources• Costs savings resulting from product modification not captured• Cross selling potential not captured due to unknown products by merchandisers
• Sales or product experience not shared preventing effective sales analysis/projection • Extension of preparation time resulting from inadequate data• Ineffective budgeting and trend analysis due to scattered information
• Inadequate resource to handle all customer request due to prolong marketing process • Customer satisfaction jeopardized due to variance in marketing quality
GNP should improve the sales process in order to resume healthy growth.
Customer enquiries that are completed in 2 weeks have a much higher chance to close the deal!
Source of data: 2008 GNP Group (Division GG4) internal data– account servicing team
Sales Presentation Completion Time & Success Rate
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Successful Rate for presentations completed in 2 wks
Successful Rate for presentations completed in 4 wks
Sales Presentation within 2wk
Sales Presentation within 4wk
Source of data: 2009 trade interviews with customer – JoAnn Stores
Marketing tools constraint reduces quality of sales presentation.
“LF has no catalog for me to easily browse through for products that I would like my team to purchase.” – JoAnn Stores VP of Sourcing & Product Development
“The turnaround time for product offerings is slow as compared to other services that LF is able to provide.” – JoAnn Stores VP of Sourcing & Product Development
“The displays at the showrooms are very nice, but there is no product information that I can readily obtain and team always has to go back to vendors to requote the same items.” – JoAnn Stores VP of Sourcing & Product Development
Showroom Preparation Time
0 5 10 15 20 25 30 35 40 45
Showroom prep time forGNP Group (GG4 Division)
Showroom prep time forcompetitors (w. Fixedproduct showrooms)
A shorter showroom preparation time will lead to more efficient and increased sales
Source of data: 2008 GNP Group (Division GG4) internal data– account servicing team
GNP Group has limited space for vast variety of product, so each time prior to customer visit, the showrooms are reset to showcase only relevant items. Competitors tends to have fixed showrooms due to their focus on narrower product offerings.
GNP Group should streamline its sales process in order to increase sales efficiency and capture 30% sales growth in 1 year.
The marketing process is not standardized, causing long turnaround time for customer pitching.
Communication on products is inadequate, results in limited product offering & untapped sales opportunity.
Historical data is not readily available. Many sales opportunity are not identified and captured.
• Merchandisers could not effectively pitch to customers with existing resources• Costs savings resulting from product modification not captured• Cross selling potential not captured due to unknown products by merchandisers
• Sales or product experience not shared preventing effective sales analysis/projection • Extension of preparation time resulting from inadequate data• Ineffective budgeting and trend analysis due to scattered information
• Inadequate resource to handle all customer request due to prolong marketing process • Customer satisfaction jeopardized due to variance in marketing quality
GNP should improve the sales process in order to resume healthy growth.
Source of data: 2009 salesperson opinion survey by Team E Consulting Group
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Increase understanding of customer need
Building professional image
Reliable internal knowledge for reference
Are
a of
impr
ovem
ents
% of salesperson in survey
Improved Somehow the same Impaired
Merchandisers could not effectively pitch to customers with existing resources
• Salespersons believe better product information improves their sales performance
Comprehensive product information brings about strong sales support.
• Salespersons said:
– “If product database is available, I can easily obtain information about the product and vendor which are new to me so that I can spend more time on understanding the client’s needs and building relationship.”
– “With the help of product database, I will be more familiar with the product range available to our clients. A thorough product knowledge demonstrates our company’s professional and expertise in the industry, which significantly affects the decision-making of vendor choice of the clients.”
– “If I am provided with reliable vendor and product information, I can substantially improve my sales performance. Less time is spent on duplication of product type, assessment of vendor capacity etc.”
Source of data: 2009 salesperson opinion survey by Team E Consulting Group
0%
20%
40%
60%
80%
100%
120%
Product Modification New Product Development
% o
f N
ew P
rodu
ct C
ost
Product Design Production Quality Assuarance Quality Control
33%
73%
Source of data: 2008 GNP Group internal data – product development team
Cost savings resulting from modification of current product types are not captured.
Cost advantage from modification products with similar spec (40%
reduction)
Modification of existing product types can be common
Percentage of new seasonal products in 2008 & 2009
78%
22%
Portion similar to other existing products
Portion without close resemblance of existing product
Source of data: 2008 GNP Group internal data – product development team
Another potential for sales growth if GNP better understands its customers.
Source of data: 2009 customer opinion survey by Team E Consulting Group
GNP Group's Sales Contribution in Top 10 Customers
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total of Top 10Customers
Customer 1 Customer 2 Customer 3 Customer 4 Customer 5 Customer 6 Customer 7 Customer 8 Customer 9 Customer 10
Sales Contribution by GNP Group vs. Other Suppliers GNP Group Other suppliers
GNP Group should streamline its sales process in order to increase sales efficiency and capture 30% sales growth in 1 year.
The marketing process is not standardized, causing long turnaround time for customer pitching.
Communication on products is inadequate, results in limited product offering & untapped sales opportunity.
Historical data is not readily available. Many sales opportunity are not identified and captured.
• Merchandisers could not effectively pitch to customers with existing resources• Costs savings resulting from product modification not captured• Cross selling potential not captured due to unknown products by merchandisers
• Sales or product experience not shared preventing effective sales analysis/projection • Extension of preparation time resulting from inadequate data• Ineffective budgeting and trend analysis due to scattered information
• Inadequate resource to handle all customer request due to prolong marketing process • Customer satisfaction jeopardized due to variance in marketing quality
GNP should improve the sales process in order to resume healthy growth.
Source of data: GNP IT Department
Incomplete Sales/Product Information Hinders Sales
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sales data Product data
% o
f T
ota
l
• Missing piece leading to incomplete information and hinder the sales pitching process and business analysis
Sales and Product Data Availability in System for Team GG4
Source of data: Survey conducted by Team E
Inadequate Date Lengthens Preparation for Sales Pitching
0
1
2
3
4
5
6
7
8
9
All from System Partly from System, Partlyfrom other sources*
All from other sources*
Avg
. N
o.
of
Day
s
* Other sources e.g. information obtained from other teams, from documents etc
+200%
+700%
Preparation Time Required for Sales Pitching for Team GG4
• Preparation time will be lengthened if data are not promptly available in the system
Scattered Info. Leads to Ineffective Budgeting & Sales Analysis
Top Team/ Managers
Data are partly input to
the system
External reports e.g. ranking
Staff from all teams
Catalogue/ Direct
Selling Team
Family Entertainment
Team
Specialty Store Team
Promotions Team
Customers’ survey / feedback
Historical reports
I’m bombarded with information from various sources and have to spend tremendous time to consolidate them, what could make the target setting process easier?
Business analytical reports
• Same happened to business/trend analysis. Fail to effectively observe business insights
Source of data: 2008 GNP Group internal data – product development team
Recommendation
• To be written after finalizing all analysis
Implementation/ Phasing
• To be written after finalizing all analysis
Appendix
Appendix 2Sales Process of GNP Group
Customer Li & Fung Vendors
Creation of Trend Guide
Creation of Sourcing Brief
Trend Guide Sourcing Brief
Review and communicate
on requirements
Arrange Samples & Quotation
Quotation SamplesReview Quotation &
Samples
Is Quotation OK?
No
Yes
Review Quotation & Samples
Is SampleOK?
No
Yes Yes
Orders Issued
NoNo
Is Sample OK?
Customer Quotation
Customer Samples
Consolidate forBuy Trip
Presentation
Yes
Is Quotation OK?
Process Time: 20 weeks
8 weeks
2 weeks
4 weeks
6 weeks