宝洁公司的战略实施与控制系统.ppt

IMPLEMENTING STRATEGY & CONTROL SYSTEMS AT P&G,Gerry Kingham Finance Mgr. P&G Nordic,Agenda,Re-cap of previous lecture From global to local strategy-making Strategy example: Yes hand-dish Management Control Systems,Choice Cascade to Define the Choices,What are our goals and Aspirations?,Where will we Play?,What Capabilities must be in place to win?,How will we Win in chosen market?,What Management Systems are required?,Choice Cascade to Define the Choices,What are our goals and Aspirations?,Where will we Play?,What Capabilities must be in place to win?,How will we Win in chosen market?,What Management Systems are required?,Re-cap on lecture 1,Where will we play? Total Shareholder Return calculations by Global Business Unit How will we win? Commercial Strategy Focus on core brands Consumer Is Boss Win with winning customers Competitive retail margins strong Tailor Investments By Customer Be Strong With Global Customers Get the value equation right Know the competitors What capabilities must be in place? Global matrix structure: Global Business Units (GBUs) and Market Development Organizations (MDOs) Individual accountability, Work & Development Plans,HOMEWORK,What share of shelf does YES have ? What do you think it has in market share ? What do you learn from the pricing and sizing you see? Why might it be so ? What influences the shelf positioning ? What would your YES strategy be?,HOMEWORK,What share of shelf does YES have ? Ca. 60% What do you think it has in market share ? Same as shelf share (60-70%) What do you learn from the pricing and sizing you see? Why might it be so ? Smaller sizes offer “extra benefits, but are more expensive pr. ml What influences the shelf positioning ? Looks like the big bottles are at the bottom What would your YES strategy be?,Choice Cascade to Define the Choices,What are our goals and Aspirations?,Where will we Play?,What Capabilities must be in place to win?,How will we Win in chosen market?,What Management Systems are required?,Implementing strategy First: Understanding the customer,HOW WILL WE WIN?,Retail is still fragmented Share of top 50 public companies, 1998,Energy,Automotive,Pharmaceuticals; diagnostics,Electronics,Telecom,Packaged goods,Financial industries,Chemicals,Retail,Source: Global Vantage; McKinsey,Energy,Financial institutions,Automotive,Retail,Packaged goods,Electronics,Average number of countries of operation for largest companies (1998),Note: Largest companies defined by total revenue Source: Hoovers; McKinsey,Retailing is still local,HOW WILL WE WIN?,* Only disclosed deal considerations in excess of USD 25 million Source: Amdata; Thomson Financial Securities; McKinsey analysis,Non-European cross-border,European cross-border,Domestic,Growing European M&A activities in Retail USD b, deal volume*,2.9,9.3,12.0,0.7,1994,1995,1996,1997,1998,12.4,1999 to September,16.0,There is a war out there,Demand,Flat/falling share of wallet Flat/falling prices More demanding and complex consumers Shifting lifestyle and work patterns,Supply,Overcapacity New entrants (e-tailers and retailers) Supplier consolidation Low availability/ rising cost of frontline labour Increasing real estate costs,Power shifting to consumers,Internet is accelerating trends,Source: McKinsey,HOW WILL WE WIN?,Sweden,Most consolidated retail market in the world the BIG are already BIG ICA owned 50% by Ahold Ahold highly financially driven company EVA More pressure on ICAmore pressure on suppliers Wants higher profits, higher turnover, happier consumers (differentiate themselves vs. Competition),HOW WILL WE WIN?,Now we know the customercan we find a sweet spot?,How will we win? Consumer is the BOSS Core Brands Win with winning customers Competitive retail margins strong Tailor Investments By Customer Be Strong With Global Customers How will we win Sweet Spot? Launch a product, with unique consumer benefits, with higher customer margins, that drive total TSR for P&G,Having the right capabilities,P&G tries to mirror how the customer works We work in multifunctional teams, to address complex business issues In a matrix organisation individual accountability is KEY,Global Ahold Customer Team Overview,P&G,Ahold,Global Team Teamleader (VP) & Multifunctional Based in Rotterdam,Regional Teams USA, Europe, Latin America, and Asia,Regional Customer HQ,Ahold Management in Zaandam,Local Teams -ICA/Hakon (Ahold Nordic) -Teamleader & multifunctional team,Local Customers ICA/Hakon,Local Nordic Team,Sales: Teamleader, Key account managers Finance Marketing Logistics Customer marketing Order group, back office support,Everyone on the team knows their role in the GOAL & what they are MEASURED on to SUCCEED,Local Nordic Team - accountability,Sales: Teamleader, Key account managers Volume, Share, Cost to serve Finance Customer profit, effecient spending Marketing Share, basket size, traffic, category share Logistics Shelf availability, perfect orders, inventories Order group, back office support Perfect Orders, leadtimes, no overdues,Control Systems,Financial Sales Fundamentals Individual Performance Action steps,Reminder: OGSM,What?,How?,P&G Measures: e.g.Yes Aroma Launch,Objective: Secure market leadership within hand-dish by offering consumers the best value and by being the preferred supplier of hand-dish to leading customers Goals (note: not actual numbers) : Grow volume by 5% Deliver $ 1,433 M of value contribution to the company Reach 90% distribution in 3 months on Aroma Reach 80% share of shelf,P&G Measures: e.g.Yes Aroma Launch,Strategies launch flankers which: Match unmet consumer preferences Grow total trade profitability on Yes brand increase consumer and customer marketing spend year 1 to secure trial use displays to get fast distribution early in year do not increase current level and depth of promotions Measurements Volume: daily shipment reports by customer Shares by product and customer: Weekly/Monthly Nielsen data Market prices by product and customer: Weekly/Monthly Nielsen data Budgets: actuals versus commitments; $/unit Value contribution (Brand/Product/Country): monthly Brand Profit Estimates (BPEs),FINANCIAL FIRM,3.59,-,(10.0%),NORDIC CONTRIBUTION,1 503,15.03,40.3%,1 433,13.65,38.0%,Annual Growth rate,90,-10%,95,-5%,Yes Aroma Launch,Measurements Volume: daily shipment reports by customer Shares by product and customer: Weekly /Monthly Nielsen data Sales Fundamentals by product and customer: Weekly /Monthly Nielsen data Budgets: actuals versus commitments Value contribution (Brand/Product/Country): monthly Brand Profit Estimates (BPEs),Volume Tracking,daily report by customer/brand on intranet look into database for shipments by product,Total Shipment days,23,Act shipments days gone,11,Act time gone (of month),48%,BRAND,vs. EST,Todays,Order,Avg Bal Ship,to FIRM,EST,ORDERED,Ariel,xx %,xx,Bold,xx %,xx,Total Fabric Care,xx %,xx,Febreze,xx %,xx,Swiffer,xx %,xx,Mr Proper,xx %,xx,Yes / Fairy HD,7.9,13.0,3.9,30%,0.3,Yes / Fairy ADW,xx %,xx,Total Home Care,xx %,xx,F&HC Total,xx %,xx,NORDIC,Volume Tracking,0,0,.,0,0,0,0,.,0,e.g. Aroma displays are not selling as forecasted why?,Yes Aroma Launch,Measurements Volume: daily shipment reports by customer Shares by product and customer: Weekly /Monthly Nielsen data Sales Fundamentals by product and customer: Weekly /Monthly Nielsen data Budgets: actuals versus commitments Value contribution (Brand/Product/Country): monthly Brand Profit Estimates (BPEs),Shares Tracking,3.1,2.8,NOPA.,3.3,3.7,3.3,3.0,3.3,3.2,3.0,2.9L,e.g. Aroma is cannibalizing as expected.,Yes Aroma Launch,Measurements Volume: daily shipment reports by customer Shares by product and customer: Weekly /Monthly Nielsen data Sales Fundamentals by product and customer: Weekly /Monthly Nielsen data Budgets: actuals versus commitments Value contribution (Brand/Product/Country): monthly Brand Profit Estimates (BPEs),Sales Fundamentals Tracking,and also display WD, feature share, shelf share, etc.,YES AROMA - APPLE,Price Per Unit Without Promo (SFT),P12M,P6M,nov,dec,jan,vs NGLAMARK,TOTAL SWEDEN,35.1,34.9,34.5,34.7,34.9,102%,AXFOOD TOTAL,35.6,34.4,34.3,33.5,33.9,98%,AXFOOD FRANCHISE,37.6,37.5,37.6,36.3,36.2,99%,D&D DISCOUNT,31.8,30.9,30.5,30.8,30.7,99%,VIVO STOCKHOLM,40.7,40.1,41.0,36.2,41.2,97%,BERGENDAHL DETALJIST,32.7,32.7,32.3,31.2,33.4,105%,YES AROMA - APPLE,Weighted distribution (SFT),P12M,P6M,nov,dec,jan,vs NGLAMARK,TOTAL SWEDEN,95.9,98.2,97.0,98.0,98.0,AXFOOD TOTAL,87.7,97.8,98.0,98.0,100.0,100%,AXFOOD FRANCHISE,72.0,95.7,93.0,90.0,99.0,97%,D&D DISCOUNT,81.7,97.2,100.0,100.0,100.0,99%,VIVO STOCKHOLM,75.0,100.0,100.0,100.0,100.0,102%,BERGENDAHL DETALJIST,100.0,100.0,100.0,100.0,100.0,102%,e.g. Aroma has high shares where displayed,A note on competition,Competitive Response Modeling Expected competitive response Sequence of actions + their NPVs determine optimal strategy Which games will we play? E.g. always match competitions promotion depth E.g. never do in-store coupons,Possible Explanations,Consumer value equation? Is price premium too high? Did we overestimate demand for Aroma products? most likely OK; off-take high where distributed + repurchase rate high Organizational capability Do we have enough sales rep coverage? Does Yes have priority in sales cycle? yes, but many store owners are rejecting Commercial strategy is trade margin recommended too low? Is value for customer not clearly defined?,Possible explanation: store owners not clear on added value do not wish to replace products, do not have more space in store for more products, and do not want complexity of more codes in system,Yes Aroma Launch,Measurements Volume: daily shipment reports by customer Shares by product and customer: Weekly /Monthly Nielsen data Sales Fundamentals by product and customer: Weekly /Monthly Nielsen data Budgets: actuals versus commitments Value contribution (Brand/Product/Country): monthly Brand Profit Estimates (BPEs) how do we reflect new forecast and what do we do?,Budget Tracking,PROCTER & GAMBLE NORDIC,Budget Control,Total MDA*,SPENT,BUD,ACT,COM,SPENT,vs BUD,(MUSD),(MUSD),(MUSD),(MUSD),(%),Yes/Fairy HD,100,18,18,35,35%,Yes/Fairy ADW,100,28,28,55,55%,Febreze,100,46,46,93,93%,Swiffer,100,64,64,128,128%,Total HOME,400,156,156,311,45%,Pringles,100,23,23,46,46%,Critical part in decision whether to continue strategy Launch based on tight economics ($/ml) do we cut budgets or increase them if volumes are not coming in? how sensitive is the NPV? Expect front spending during launch, but possibilities of cutting Q4 support,FINANCIAL TRACKING Brand Profit Estimates & Reconciliations,explain difference vs. estimate by volume, mix effect, budgets, exchange rates, and trade terms available by product and country consolidated across GBUs and MDOs in SAP R/3 to make our quarterly report to Wall Street,$M,$ / ml,Delta %,4 000,40.00,Mix effect,10,0.3%,0.10,0.3%,Volume effect,100,2.5%,Exchange Rate effect,-10,-0.3%,-0.10,-0.2%,4 100,2.5%,40.00,0.0%,$M,$ / ml,Delta %,3 725,37.25,Mix Effect,10,0.3%,0.10,0.3%,Volume effect,100,2.7%,Exchange Rate effect,-10,-0.3%,-0.10,-0.3%,Customer budget effect,-50,-1.3%,-0.05,0.1%,Consumer budget effect,-5,-0.1%,-0.01,0.0%,3 770,1.2%,37.31,0.2%,Net Real Reconciliation,NOS Reconciliation,ACTION STEPS: E.g. September BPE,We are below volume target. Sales fundamentals show that we are low on distribution (price and share where in store on target). Repurchase rate is high among consumer the product works. Only 175 of estimated 300 displays of Aroma have been sold store owners reluctant to take in new product. Brand team meets with Sales teams to discuss possible actions.,ACTION STEPS: E.g. September BPE,We take back budget commitments wholly based on volume, this money can be made available for re-investment. Decision: distribution and year-1 volume is vital. We need to re-deploy funds for a display-drive. Try one-time irresistible offer with new trade leaflet specifying rationale behind Yes Aroma. Effect on contribution: higher customer marketing budgets % NOS, but reach critical volume and trial in year 1. New financials are communicated to GBU via Brand Profit Estimate. Full reconciliations are sent by Finance.,PERFORMANCE TRACKING Accountability,Accountability examples: country GM value contribution and flow; external relations, organization GBU GM P/L (incl. Production + logistics costs, all overheads), inventory market planner forecast accuracy, % availability brand team leader contribution, volume, shares, organization customer team leader volume, sales fundamentals, organization,PERFORMANCE TRACKING Work & Development Plans,once per year feedback from managers, direct reports, colleagues How has work plan been delivered? How has person developed organization? Strengths + weaknesses set development plan with manager Basis for promotion timings + salary level,PERFORMANCE TRACKING,FIRM,FY 99/00,FY 00/01,FY 01/02,FY 02/03,Consumer Satisfaction & Reach,SEK:US$ Exchange Rate,0.1172,0.1025,0.0954,0.0943,Net Sales P&L,($MM),XX,XX,XX,XX,(Index vs. Year Ago P/L),xx,xx,xx,xx,(Index vs. Year Ago Constant Rate),xx,xx,xx,xx,Volume,(MMSU),XX,XX,XX,XX,(Index vs.