Marketing Strategy Recommendation

1. Marketing Strategy Recommendation Expansion into Trinidad and Tobago Team A1 April 21, 2006

2. Company Overview • Founded in 1979 in Atlanta, GA by Bernie Marcus and Authur Blank • Robert L. Nardelli- president/chairman/CEO • Over 2000 stores throughout US, Canada, Mexico, Puerto Rico and St. Thomas • Approx. store size-108,000 sq ft, • 40,000+ SKUs • 2005 Revenue- 73.1 billion “World’s largest home improvement retailer”

3. Trinidad and Tobago Target Market Strategy Emphasis on home appliance items for new and replacement purchases. • Customer base • Do-it-yourselfers • Contractors • Age • 18-60 years • Profile • Middle aged singles • Young families with dual incomes • Professionals • Other • Other

4. Expansion into Trinidad & Tobago Recommendations • Start-up Cost • 16M • Format • Renovated 108,000 square ft structure • Product selection • 25,000 products • Type of sales • In-stock and installed sales  

5. Expansion into Trinidad and Tobago Recommendations • Operations • 6:00am- 11:00pm-M-S • 10:00-9:00pm S • Personnel • 100 Pt & FT Employees (All local residents) • Mgmt- 1 GM, 4 Asst. Mgrs., 6 Spvs. • Promotion/Advertising Budget • $500,000 • Community Sponsorship • Kids in Need of Direction- K.I.N.D.

6. Trinidad and Tobago at a Glance • Principal Government Officials • President-George Maxwell Richards • Prime Minister-Patrick Manning • Attorney General-John Jeremie • Chief Justice-Satnarine Sharma • Two-Island Republic • Total area of 1,980 square miles • 1.3 million people share a culture • Experienced tenth straight year of economic growth • GDP reached $11.48 billion www.fas.usda.gov/info/fasworldwide/2005/12-2005/TrinidadTobagoretail.htm Souers, Michael, 2006. Home Depot Solid Foundation; Business Week

7. Tourismand Travel Industry • 5.2% growth next 10 yrs • Contribute 15% of GPD • 2nd fastest T&T economy in Caribbean • 15 Billion Mass Transit system to link East & West 3rd largest city Port of Spain 2/6/06 Sun Sentinel http://www.gov.tt/ttgovnews/files/cms/WorldTravelTourismCouncil.pdf http://www.gov.tt/news/news_article.asp?id=3803 http://www.trinidadexpress.com/index.pl/article_opinion?id=125832459

8. SWOT ANALYSIS

9. Economic Environment Has earned a reputation as an excellent investment sitefor international businesses • The leading Caribbean producer of oil and gas • The economy benefits from low inflation and a growing trade surplus • Prospects for growth in 2006 are good as prices for oil, petrochemicals, and liquefied natural gas are expected to remain high, and foreign direct investment continues to grow to support expanded capacity in the energy sector http://www.cia.gov/cia/publications/factbook/geos/td.html#Econ

10. Market Attractiveness and Competitive Position

11. BHAGWANSINGH’S • Bhagwansingh (BHSI) was founded in 1974 and currently has over 800 employees • Revenues for this private company were $687 million • BHSI are distributors and manufacturers of plastic water tanks, rounds, flats, wooden doors, chain link wire and welded mesh fabric and nails • BHSI has four locations on the island and is a well known local/regional brand throughout the Caribbean.

12. COURTS • Courts’ is a distributor and seller of home furnishings, electronic items and appliances • The current count is now 18 peaking at 19 in 2002. • Revenues for Courts Trinidad LTD are reported to be over 828 million.

13. SISSONS PAINT • Prior to becoming incorporated Sissons Paint were manufacturing and marketing its paints in Trinidad for several years until 1956 when they became incorporated. • Sissons Paints was the first company to successfully introduce products such as Siscolac Chinese Lacquer, polyurethane varnish, oil varnish stain (stain and varnish in one), non-drip ceiling white, weather guard exterior emulsion and a water based enamel.There are seven Infinity Colour Shops currently on the island of Trinidad.

14. PRICESMART • Sol Price created the discount store industry in the United States by launching FedMart in 1954 • Sol and Robert Price subsequently developed the membership merchandising business with the first Price Club in 1976 • PriceSmart now operates 23 warehouse clubs in 11 countries and one U.S. territory • 618 million in revenues 2005

15. Emphasis on New Product-Market Growth Mullins, W and Larreche, B, 2006. Marketing Strategy Chapter 3.

16. Regulatory Environment • Trinidad and Tobago achieved independence from Britain in 1962 followed by republican status in 1976. • The twin-island nation is currently a member of the Commonwealth • Fully democratic elections are held every five (5) years, since 1956. Universal adult suffrage, with a minimum voting age of 18. • The Tobago House of Assembly is responsible for administrative governance within Tobago. City and county councils are responsible for local governance.

17. Regulatory Environment cont. • The Judiciary comprises a Supreme Court and district courts. • The Supreme Court consists of the High Court of Justice and the Court of Appeals. • The High Court is presided over by the Chief Justice and ten (10) judges. • The district courts are presided over by a chief magistrate and seven (7) senior and eighteen (18) stipendary magistrates.

18. Member of CARICOM started in 1973 CARICOM was established “for the purpose of facilitating the economic and social development of member states and unifying the Caribbean” Ultimate goal is to become a Single Market for members CARICOM imports from NAFTA up 9.5 billion to 12.5 billion from 1996-2001 NAFTA imports from CARICOM down from 44.7% to 43.6% from 1996-2001 Value Added Tax (VAT) 15% import/export Common External Tariffs (CET) 0-20% range with some products at 40% Tariffs-Trade Agreements -Imports (Ministry of Foreign Affairs and Foreign Trade, 2001).

19. Break-even Analysis

20. Pro-forma IncomeProjections

21. Balance Sheet

22. Final Group Recommendation • Economic Environment • Political Environment • Financial Analysis • SWOT