MB107 Executive Presentation

1. MB107 Executive Presentation

2. 2 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

3. 3 Who’s who in MB107 Program

4. 4 What is the Executive Presentation?

5. 5 Dry Run and EP Specifics

6. 6 This is real world Executives determine your grade Like when client decides if your presentation was good enough to get you hired as a consultant! Like when boss tells you if your analysis/ideas were strong enough that she’s willing to implement it Know what you’re getting into: review execs Keys to Success, Eval forms Make sure what you’re saying is: consistent (reliable) and valid (truthful, good reflection of company’s actual situation) We’re not expecting it to be perfect, but can you make a good, solid, argument with evidence to back it up?? Finally: appreciate the execs!!This is real world Executives determine your grade Like when client decides if your presentation was good enough to get you hired as a consultant! Like when boss tells you if your analysis/ideas were strong enough that she’s willing to implement it Know what you’re getting into: review execs Keys to Success, Eval forms Make sure what you’re saying is: consistent (reliable) and valid (truthful, good reflection of company’s actual situation) We’re not expecting it to be perfect, but can you make a good, solid, argument with evidence to back it up?? Finally: appreciate the execs!!

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8. 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%. 8

9. 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 9

10. www.ppr.com 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) 10

11. 11 In the News: PPR, Gucci and Luxury Brands

12. Analyzing the GUCCI Group 2009 Case Analyze the Gucci Group’s corporate strategy using the elements of the Strategy Diamond? 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? 12

13. 13 Gucci’s Current Standing:Major Issue Identification Caroline Foundation = just the beginning You build on it December 7, 2007: where do they stand? What’s their current situation? Two key slides to include Be thorough, be explicit, be clear, explain!! Caroline Foundation = just the beginning You build on it December 7, 2007: where do they stand? What’s their current situation? Two key slides to include Be thorough, be explicit, be clear, explain!!

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15. 15 Strategic Recommendation  must be Comprehensive Caroline Be comprehensive It’s not strategy if it doesn’t consider all of this This model forces you to consider all aspects of strategy and implementation Strategy is not just a new marketing campaign or a new pricing structure Make sure you can explain your recommendations and how they involve: An arena change? How you’ll get there? Why you’ll stand out/win? What you’ll do and when? Ec logic: clear rationale of why you’ll be able to turn a profit (more from Hamilton) Turn over to CathyCaroline Be comprehensive It’s not strategy if it doesn’t consider all of this This model forces you to consider all aspects of strategy and implementation Strategy is not just a new marketing campaign or a new pricing structure Make sure you can explain your recommendations and how they involve: An arena change? How you’ll get there? Why you’ll stand out/win? What you’ll do and when? Ec logic: clear rationale of why you’ll be able to turn a profit (more from Hamilton) Turn over to Cathy

16. 16 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

17. 17 Financial Analysis & Projections

18. 18 Economic Logic

19. 19 Detailed Marketing Plan

20. 20 Detailed Marketing Plan Product-Market Opportunities

21. 21 Junior Executive Team Your experience working in groups here is great preparation for the workforce Groups/teams are heavily emphasized in the real world 80% of Fortune 500 companies have half or more of their emps working on teams (HRMagazine, May 1999, p. 30) Strong chance you’ll be working in teams once you graduate Here you’re getting great experience on how to work as a group/team Teamwork is even at Kellogg’s Kellogg’s has 26,000 emps. Teamwork is inherent in their K-values We Are All Accountable Accept personal accountability for our own actions and results Actively engage in discussions and support decisions once they are made Involve others in decisions and plans that affect them Keep promises and commitments made to others Personally commit to the success and well being of teammates Similar to expectations you should have Accountability: Hold each other mutually accountable Communication: constructive criticism Leadership: don’t just assign a leader, make sure you have direction, who can inspire confidence, who can unify your work…put you all together in one presentation (not 5 separate) Support: Be there for each other Flow: Start working early, keep up with it 4 weeks to dry runs, then 6 weeks more till EPs Not the kind of thing you can do last minute COACHES WILL NOT DO THE WORK FOR YOU! You own it…it’s yours! Your experience working in groups here is great preparation for the workforce Groups/teams are heavily emphasized in the real world 80% of Fortune 500 companies have half or more of their emps working on teams (HRMagazine, May 1999, p. 30) Strong chance you’ll be working in teams once you graduate Here you’re getting great experience on how to work as a group/team Teamwork is even at Kellogg’s Kellogg’s has 26,000 emps. Teamwork is inherent in their K-values We Are All Accountable Accept personal accountability for our own actions and results Actively engage in discussions and support decisions once they are made Involve others in decisions and plans that affect them Keep promises and commitments made to others Personally commit to the success and well being of teammates Similar to expectations you should have Accountability: Hold each other mutually accountable Communication: constructive criticism Leadership: don’t just assign a leader, make sure you have direction, who can inspire confidence, who can unify your work…put you all together in one presentation (not 5 separate) Support: Be there for each other Flow: Start working early, keep up with it 4 weeks to dry runs, then 6 weeks more till EPs Not the kind of thing you can do last minute COACHES WILL NOT DO THE WORK FOR YOU! You own it…it’s yours!

22. 22 To avoid failure when working in groups, be aware of these issues Groupthink: group is so cohesive, so committed to each other, that the members try too hard to conform Results in an “agreement-at-any-cost” mentality Value getting along (consensus) more than making good decisions How to avoid it? Have someone in the group try to remain neutral…not to be married to the idea that’s proposed Encourage open dialogue and new ideas Encourage members to express their doubts and criticisms of recommendations/ideas Escalation of Commitment Becoming more committed to a previous decision despite negative information (dry runs) Stay with a decision even when there’s clear evidence that it’s not working Why? To demonstrate you weren’t wrong, to avoid admitting you made a mistake, like gambling (it might work out this time), already put so much into it Example: Bar fridays, tell friends about girlfriend (nag, ball and chain), tell you to move on Next week, you say you’re engaged Why? Put so much into it already, I was right about her (she’s the one), it’ll work out Recognize the potential for this: Recognize when things aren’t working and move on Social Loafing When an unmotivated group member squeezes by without contributing a fair share Has anyone here experienced this? Based on research by Max Ringelman (1920s) (Jrnl of Personality & Social Psych) Compared the results of individual and group performance on a rope-pulling task Had indivs expended on avg 63kg of force In 8 person groups, indivs each only 31kgs of force able to pull more, but each person doing less indivs may be tempted to become a “free rider” and coast on the group’s efforts How to avoid? Hold individual group members accountable for their own work/contributions Make sure you’re sharing the workload In short, be aware that working in a group can differ from working by yourself Recognize what can go wrong Be aware of what you can do to be productive as a group To avoid failure when working in groups, be aware of these issues Groupthink: group is so cohesive, so committed to each other, that the members try too hard to conform Results in an “agreement-at-any-cost” mentality Value getting along (consensus) more than making good decisions How to avoid it? Have someone in the group try to remain neutral…not to be married to the idea that’s proposed Encourage open dialogue and new ideas Encourage members to express their doubts and criticisms of recommendations/ideas Escalation of Commitment Becoming more committed to a previous decision despite negative information (dry runs) Stay with a decision even when there’s clear evidence that it’s not working Why? To demonstrate you weren’t wrong, to avoid admitting you made a mistake, like gambling (it might work out this time), already put so much into it Example: Bar fridays, tell friends about girlfriend (nag, ball and chain), tell you to move on Next week, you say you’re engaged Why? Put so much into it already, I was right about her (she’s the one), it’ll work out Recognize the potential for this: Recognize when things aren’t working and move on Social Loafing When an unmotivated group member squeezes by without contributing a fair share Has anyone here experienced this? Based on research by Max Ringelman (1920s) (Jrnl of Personality & Social Psych) Compared the results of individual and group performance on a rope-pulling task Had indivs expended on avg 63kg of force In 8 person groups, indivs each only 31kgs of force able to pull more, but each person doing less indivs may be tempted to become a “free rider” and coast on the group’s efforts How to avoid? Hold individual group members accountable for their own work/contributions Make sure you’re sharing the workload In short, be aware that working in a group can differ from working by yourself Recognize what can go wrong Be aware of what you can do to be productive as a group

23. 23 Team Assignment: Project Timeline Start right away Dry runs Oct 23, 24, 25Start right away Dry runs Oct 23, 24, 25

24. 24 The Student Perspective

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26. 26 A Few Final Notes