Professional Documents
Culture Documents
Key Facts:
Member of Praktiker Bau- und Heimwerkermarkte Holding
AG operating 425 stores in 9 European countries;
Since 1996 part of METRO Group;
2007 Group revenues reached 3.95 billion euros;
Market targeted: Do It Yourself (DIY);
In Romania Praktiker is the market leader in terms of
revenues (265.4 million euros in 2007) and operates 24
stores (last store opened in Buzau on oct. 24th)
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Mission Praktiker
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Organizational Chart – Praktiker Romania
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PEST analyze
Depreciation of local currency after a Higher costs for loans and materials
few years of appreciation imported -> decrease in consumption
Foreign investments
GDP
Inflation & exchange rate
Consumption
Residential projects
Legal frame
Threats Opportunities
area area
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Market Forces impacting Praktiker
Competitors Influencers
Bricostore, Baumax, e.g. Government,
Hornbach, Ambient, Obi… Specifiers, Architects
Praktiker
Suppliers Customers
Building materials e.g. masons, homeowners, small and
producers, importers medium construction companies
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Market force’s impact on Praktiker
Negative Somehow Neutral Somehow Positive
Drivers negative positive
Competitors
Influencers
Suppliers
Customers
Threats Opportunities
area area
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Competitors impact on Praktiker
Negative Somehow Neutral Somehow Positive
Drivers negative positive
Pricing
Products & Services
Distribution
Promotion
Peoples
Threats Opportunities
area area
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Operational results effectiveness
Low Somehow Fair Somehow High
Drivers low high
Market share
Turnover
Weaknesses Strengths
area area
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Opportunities
1st
priority
■ Niche
market
■ Product
branding ■ Market
growth
■ Legal
frame ■
Competitors
Probability
■ End users
supply
limitations
technical
support
2nd
priority
■
■ Floods Infrastructure
■ GDP
■ Imports
3rd
priority
Impact 11
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Threats
■ 1st
■ ■ priority
Substitutes
Competitors competitors
Grey market marketing network
■
effort
Competition
pricing
■
■ Traffic Competitors
restrictions product
portfolio
Probability
■ Cost of
■ ■ Customers loans
Competitors expectation
distribution s
2nd ■ Pricing
priority limitations
■ Suppliers
■
Influencers
3rd
priority
Impact 12
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Strengths
■ Tunover
development
■Praktiker
network
■ Market
share
■ Credit
management 1st
priority
Probability
■ Brand
2nd positioning
priority
■ Training
■ New
Markets
(Services)
■ Customer
base
3rd
priority
Impact 13
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Weaknesses
■ Pricing
1st
■ Control
■ Customer priority
complaints effectiveness ■ Product
■ management ■
Recruitment Distribution
■ Customer
■ Systems satisfaction
limitations
■ Product
portfolio
Probability
■ Technical
services 2nd
priority
■ Market
development
■ Market
research
■ Promotional
activities (other than
events)
■ Suppliers
3rd
priority
Impact 14
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Objectives 2009
As a result of the PEST & SWOT analysis, relevant objectives are set.
Two types of objectives need to be considered: strategic frame and
strategic objectives:
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Strategic frame 2009
Traditional
markets
•
to customers Guvernamental programes in place
Increase market share for heavy construction Thermical Insulation for homes Program
• • •
naterials (steel, cement, bricks) Technical Support
Sell packages not products Develop IT programs to help the customers
make a cost calculation
Transport service
• •
Loyalty programs for customers
Growth Innovation
• •
Distribution New concept : ecologic house (agreement with
• •
Niche
markets 16
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Ways to increase profitability
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New Corporate Business Unit
Romania has a poor, sub EU level of public sector
development and repair of construction in the public
sector
Great and urgent demand of investment by the
government in health, education, public administration
infrastructures
Governmental projects such as construction of 32 brand
new hospitals – Ministry of Health
Several local mayoralty’s project
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Action Plan Corporate B.U.
ACTION PLAN
Sales staff: 1 sales manager 7 area sales managers 24
key accounts managers (present in each store)
Logistics: rented for the beginning, operational lease later
according to development
Commercial Credit Insurance contract concluded with one
of the major companies for credit risk coverage Euler
Hermes or Coface Romania
Acquisition and implementation of invoicing software for
strict control over sales and credit granting
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Lowering Operating Costs - Outsourcing
Outsourcing for Staff and Entry Level Positions
Labor cost increased significantly in Romania, who now exceed the level
of traditional off shore market.
Political and economical environment in Romania is good for
outsourcing.
Human resources generate problems to companies in Romania
because:
- 49% - missing qualify staff
- Staff migration
- Unrighteous employees’ demands.
- Today, outsourcing is an option for cost optimization and strategically
management
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Lowering Operating Costs - Outsourcing
outsourcing for IT
IT employee doesn’t mean only salary cost, but also
indirect costs
Indirect cost can be up to 142.3% of net monthly value
Services that can be outsourced are:
- internet administration, e-mail administration, web site
administration,
- maintenance for cables, switching and wireless,
- Maintenance for data bases, back-up,
- IT security, monitoring, IP telephony
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Lowering Operating Costs - Outsourcing
outsource the processing of suppliers’ invoices
The activity to process the suppliers’ invoices and the documents
involved in acquisition process are activities for long time and
this require an important volume of documents.
Automating and outsourcing those processes will increase
productivity and will reduce costs.
Using this solution, the cost for Financial Department’s personnel
will decrease with 25%.
Using automatic processing the cost will be 80% less.
The profit will be from:
- increasing payment accuracy,
- improving the control and the audit process,
- decreasing cost for storage.
- Manual processing can generate the following problems: losing
documents, delays, errors.
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Lowering Operating Costs - Outsourcing
outsource the management of Auto Park
The operational leasing means a long time leasing contract for autos.
The financial advantages are:
- low costs,
- fixed installments,
- good predictable cash flow.
- total deducting costs,
- no unpredictable repairs and maintenance.
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