MB107 Executive Presentation Orientation Meeting Agenda • Residential Life – Apply the Skills You Learn Opportunity • Who’s Who in the MB107 Program • What is the Executive Prese by jku88791

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									MB107 Executive Presentation
    Orientation Meeting Agenda
•   Residential Life – Apply the Skills You Learn Opportunity

•   Who’s 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
  Who’s who in MB107 Program
MB107 Faculty Coordinator – Professor Timothy Harper

MB107 Faculty – Professors Balevic and D’Abate

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)

 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)

           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.

         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!!!!!!
                 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!

   Organizational Structure - See Page 10                                         7
                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 Nielsen’s 48-country global
    online survey that was conducted in November 2007. (www.luxuo.com)
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


      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/Mark%20Lee%2011%20October
  %20-%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
   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
           Analyzing the GUCCI Group 2009 Case
•   Analyze the Gucci Group’s corporate strategy using the elements of the Strategy

•   Discuss the Gucci Group’s position regarding vehicles such as licensing and acquisitions
    at the time of the case? What driving forces influenced Gucci’s 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?
The Executive Presentation: Where to Start?
 The case represents the foundation of your analysis.

  Gucci’s Current Standing:
  Major Issue Identification

  Two “Key Slides” to include in your presentation:

  1. The key challenges/opportunities/issues facing Gucci

  2. Our strategy addresses these by… (explain how)

               Situational Analysis Leads
                to Strategy Development

External Analysis
•Porter’s 5 forces
•Industry life cycle
•Value chain                                    Select Optimal Strategy
•Competitor analysis                            5 elements
     •Strategic group mapping                   •Arenas
     •Market segmentation          Strategic    •Vehicles
     •Response profile             Options      •Differentiators
                                 (Trade-offs)   •Staging
Internal Analysis
                                                •Economic logic
•Core/distinctive competencies
•Internal value chain                                            14
             Strategic Recommendation
               must be Comprehensive
                               • Which product categories?
                               • Which market segments?
                               • Which geographic areas?
                               • Which core technologies?
                               • Which value chain emphasis?

                                Economic Logic
                             •Lowest costs via scale advantages?       Vehicles
     Staging                 •Lowest costs via scope and           • Internal Development?
• Speed of expansion?          replication advantages?             • Joint Ventures?
• Sequence of initiatives?   •Premium prices due to                • Licensing/Franchising?
                                                                   • Acquisitions?
                               unmatchable services?
                             •Premium prices due to proprietary
                               product features?

                                  • Image?
                                  • Customization?
                                  • Price?
                                  • Styling?
                                  • Product Reliability?                                  15
             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 Gucci’s baseline Operating Income by 2014.
•   Your recommendation can be a 3-5 year plan.

•   It will help to project Gucci’s 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
          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

 Don’t be afraid to lose a little money in years one and two

 Project out 3 - 5 years

                    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 – don’t just provide numbers,
                      provide evidence!
         Detailed Marketing Plan

Gucci’s Current Marketing Mix – Continue or Change?

          (Consistent with PPR/Gucci’s Vision & Mission?)   19
        Detailed Marketing Plan
Product-Market Opportunities

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


Apply Individual and Team GOAL-SETTING

Be ACCOUNTABLE to your team


  Patrizio di Marco, 46, was appointed Gucci's President
  and Chief Executive Officer in January 2009           21
          Junior Executive Team
MB107 Teams Fail When Team Members or Individuals:
Don’t 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

   Team Assignment: Project Timeline

 Phase 1         Phase 2              Phase 3

           Feb. 15 – March 20                        April 30
                                April 1 – April 24       23
     The Student Perspective

Jordan and Juliet, what do you think?

                         www.brandchannel.com   24

                            MB107           Christine         MB107
        Home Page          Coaches         Alexander          Faculty
                                &               &                 &
                              Task                           Business
                          Specialists                         Faculty
Ask former MB107 students this question: If we had to do it all over again, we would..
            A Few Final Notes

     – 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 (it’s a tight schedule)

     – Perform Library Research Assignment

     – Check your Skidmore e-mail multiple times each day!!


    MB107 FALL 2008

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