Proposal to G2000 Apparel Limited Jane Lam97194890 Jason Chen08934099 Roger Gao08934166 Roy Ng08934233 Stanley Tsui08936463 October 2009 How can Thailand.

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Presentation transcript:

Proposal to G2000 Apparel Limited Jane Lam Jason Chen Roger Gao Roy Ng Stanley Tsui October 2009 How can Thailand Merchandise Purchase Volume be Increased by 30% in One Year Through the Increase in Sales by the Existing Franchisee?

2 The Story Line The Situation G2000 has been employing franchise mode of operation in Thailand for the past 10 years. The Complication However, in recent years, merchandise purchase volume has seen no growth. G2000 management would like to achieve a 30% increase in purchase volume within one year. The Question How can this growth target be achieved? The Answer We can increase the sales performance by increasing shop/counter spaces. The Rationale Increasing shop/counter spaces –Shop space growth in past 3 years is flat, subsequently the purchase volume remains flat. –Open new shops in strategic location, expand existing shops/counters size to gain market share –Comparison between opening shops and counters. (estimate profit) Cost structure Higher Conversion rate in counters Opening speed –More merchandise needs to be purchased from G2000 if shop/counter sizes are increased –More merchandise needs to be purchased from G2000 if additional shops/counters are opened

3 Relation of shop space and sales growth 26% 26% To achieve 30% growth, Franchisee need to increase X% shop space. (Stanley)

4 Performance of shop of different locations Opening shop in high traffic location yield better ROI/ROA We should Open new shops/counters in hi traffic location. Source: Based on Thai franchisee internal statistics and estimations

5 Compare of Profit structure of shop and counters Counters has higher profit margin (Roy) Source: Based on Thai franchisee internal statistics and estimations

6 Capital Requirement to setup shops and counters Counters need less CAPEX to setup. The risk is also lower. (Roy) Source: Based on Thai franchisee internal statistics and estimations

7 Lead time to setup shops and counters Shop lead time 12mths average size 3000 sq.ft. Given 12mths, increase 3000 sq.ft. Counter lead time 1mth average size 600 sq.ft. Given 12mths, increase 4800 sq.ft. Source: Based on Thai franchisee internal statistics and estimations

8 Compare of conversion rate between G2000 Thai and Thai industry average We already do a good job. Source: Based on Thai franchisee internal statistics and estimations

9 Compare of conversion rate between shops and counters Counters has higher conversion rate. Source: Based on Thai franchisee internal statistics and estimations

10 Market position of G2000 in Thailand The market is not captured. Captured it ASAP or other competitors will come in.

11 Profit forecast if shop space increased by X% in 1 years

12 Other Initiative to Encourage to Franchisee Sponsor Advertisement and Promotion for new shops Longer payment period for first order of each new shops