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A case study of The Netherlands NRCC 2012

A case study of The Netherlands NRCC 2012. Strategies for increasing market share. History goes back to 1891. A tour through history. Around 1970 Coop Netherlands, a national organisation of Dutch co-operatives (market share 7.5%) with: mainly small sized supermarkets,

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A case study of The Netherlands NRCC 2012

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  1. A case study of The Netherlands NRCC 2012

  2. Strategiesforincreasing market share

  3. History goes back to 1891

  4. A tour throughhistory Around 1970 Coop Netherlands, a national organisation of Dutch co-operatives (market share 7.5%) with: • mainly small sized supermarkets, • distribution centers, • a few restaurants and hotels, • bakeries and some other food production facilities and furniture and textile shops.

  5. A tour throughhistory Co-operativedownturn 1970-1975 • Dutch co-operatives failed to concentrate and to co-operate, national co-operation was frustrated out of perceived own interest of individual co-operatives: umbrella organisation Coop Netherlands was dissolved • Mismanagement: If concentrated, management was unable to respond to the needs caused by the increased complexity and growth • Failure to timely adapt to rapid changes in competition and economic circumstances

  6. A tour throughhistory Co-operativedownturn 1975-1990 • Most Dutch co-operatives were sold to commercial enterprises, were dissolved or went bankrupt • The only 2 surviving regional co-operatives merged into the present Coop organisation • Disposal of all other business segments than supermarkets BUT • Again, mismanagement in late eighties, due to an internal focus rather than an consumer based orientation

  7. Rather tough times

  8. Market share droppedandsodid the results

  9. Coopneededreconstruction

  10. Back on track Co-operativeturnaround Around 1990 Around 1990 Coop’s market share only was 0.75% • Hiring of a turn`aroundmanager and board professionalisation • External focus: extensive shop redesigning and equal marketing/advertising activities (Coop Club Card) • Switch from joint purchasing group • Significantly increased level of cost consciousness resulted in an efficiency and reorganization program • Acquisition of bigger locations was key

  11. Strategy map - 4 supportingpillars Slogan: At Coop, you’re the boss Mission:‘Coop is a service oriented, clearly positioned, independent co-operative that, whilst it is fully conscious of its position in society, deliveres an optimal variety of food and related products/services to its consumer and franchise members. Core values: Co-operation, Entrepreneurial, Trustworthy, 1 Coop distinctive power 2 Using economies of scale 3 Sound growth 4 Excellent operations • Growth initiatives: Project development & store /chain acquisitions • Find growth opportunities in existing locations

  12. Cheap Discount / Price Low service High service Service Middle Expensive Continuousandongoingfightforposition on service andprice level, a lot of players ‘in the middle’

  13. Continuousbattle in the playing field

  14. Fragmented landscape, market leader 34% market share,hard discounters 14% market share and show steady growth

  15. Price is a hot issue in the Netherlands Source: Eurostat

  16. Case studies Merger Coop and Codis, 2001 Acquisition of: 11 stores of DeWitKom@rt, 2005 18 EDAH stores, 2006 24 SuperdeBoer stores, 2010

  17. 5 D’s Dream Do Discipline Dare Differ

  18. What’syourdream?

  19. Opportunity

  20. Do it!

  21. Edgeupwards Co-operativegrowth 1995 - 2011 Merger Codis • Franchise based co-operative, outdated formats/concepts • In house warehousing/logistics • Member of a privately owned purchasing company • North East and South West Netherlands Coop • Consumer co-operative with own Coop shops: • Outsourced logistics • Member of a purchasing co-operative, Superunie • Mid Netherlands

  22. Dare

  23. International business opportunity? Consumer Co-operatives Forum2012 AND BEYOND: BUSINESS STRATEGY OF CONSUMER CO-OPERATIVES London, 29th & 30th September 2011

  24. Competion Authorities

  25. Edah acquisition case

  26. Ifnecessary, create a consortium

  27. Monster multi member consortium

  28. Discipline is essential

  29. Store allocation, bidding, financial backing

  30. Road show forfranchiseesturned out tobe a brilliantidea

  31. Mergers of consumer co-operatives 6 recommendations • Separate commercial from governance integration in implementation stage • Make a plan to achieve rapid commercial integration • Early establish clearness about leadership of merged society • Ensure transparency in decision making process • Get all stakeholders’ support • Provide stakeholders opportunity to help shape governance of new co-operative society

  32. Acquisitions made by co-operatives 6 recommendations • Evaluate financial resources • Make a good commercial integration plan • Raise new employees’ awareness on co-operative principles and values • Make sure employees understand growth through acquisition is beneficial • Secure members’ particular advantages • Stress co-operative differences in the retail market

  33. Immediately deal withleadership issue

  34. Execute as military operations

  35. Buddies are here to help

  36. Stress the co-operativedifference

  37. Wrap up

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