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Al-Ghazzawi groupPage 2
Agenda
► To review the strategy elements for Food and Beverage Sector for final approval► Vision & mission statements► Growth Strategies► Performance Objectives► Strategic Initiatives
► Develop an implementation roadmap for strategic initiatives
Al-Ghazzawi groupPage 3
Outline
► Background► Highlight of SWOT► Vision and Mission► Growth Strategies► Performance Objectives► Strategic Initiatives & Actions List► Strategic Initiatives List► The 5 Year Roadmap► New Initiative Investment Request
Al-Ghazzawi groupPage 4
Background
GDC was granted the exclusive franchising rights to develop and operate Joffrey’s Coffee & Tea Co. under the Joffrey’s Systems throughout the Kingdom of Saudi Arabia, and certain countries in the Middle East and South Asia.
At present, GDC has 51 (Fifty One) Joffrey’s outlets & six sub franchises in Jeddah, Dammam and Riyadh (Saudi Arabia), Bahrain, Beirut (sub franchise) and has continued planning to develop and operate additional Joffrey’s outlets in due course.
Al-Ghazzawi groupPage 5
Highlight of SWOT
Key Strengths► Early penetration in Saudi market
► Product quality
► Positive customer perception
Key Weaknesses► Poor visibility in key locations in KSA
► Retention of key employees
► Staff motivation and morale
Key Opportunities► Big market in KSA and Middle East
► Wholesale market penetration
Key Threats► Competitor strategies
► New government regulations may limit use of expatriate workers
Al-Ghazzawi groupPage 6
Mission and vision statements
Mission Statement: To establish sensational warm and inviting Social experience, and tie with our customer through generations in Saudi Arabia and the Middle East in food and beverage services
Vision Statement: To be the first choice in food and beverage services
Al-Ghazzawi groupPage 7
Growth Strategies
• Growing outlets from 58 to 100, by adding 8 outlets each year. 6 kiosks and 2 shops.
• Sub-Franchise: from 1 in Lebanon and 4 in KSA to 5 in KSA.
• Keep wholesale
- Sub-Franchise: add 15 more in new areas in the middle east.
• Plan to open new Food and Beverage brand
• Study the possibility of opening catering business.
Markets/Geography growth
Current Markets/Geographies
New Markets/Geographies
Type of growth
Organic growth(Extension of current products/services)
Inorganic growth(Step outs in new products/services)
Al-Ghazzawi groupPage 8
5 Year Growth Strategy – Overall View
Revenues
Profit margins
- 20% 0% 5% 10% 15% 20% 25% 30% Over 30%00 M
SR 50M
SR 75M
Over SR100M
Exist Outlets
201229 M
Wholesale
20121.9 M Sub-Franchise2012
0.47M
20163.94
New Outlets
Revenue (2012): SR33.05 M Forecasted Revenue (2016): SR64.23 M
SR 25M
20121.68 M
20165.63M
201650.72 M
20163.94
Al-Ghazzawi groupPage 9
5 Year Growth Strategy (Cont’d)
Revenues
Profit margins
-0% 0% 10% 20% 30% + 30%
00 M
SR 60M
- 10%
SR 50M
SR 40M
SR 30M
SR 20M
SR 10M
201226 M (15%)
Existing Outlets
201333.35 M (17%)
201438.35 M (18%)
201544.1 M (20%)
201650.72 M (22%)
Al-Ghazzawi groupPage 10
5 Year Growth Strategy (Cont’d)
Revenues
Profit margins
4% 8% 10% 12% 14% 16%
00 M
SR 6M
6%
SR 5M
SR 4M
SR 3M
SR 2M
SR 1M
20121.68 M (10%)
New Outlets
20133.70 M (12%)
20144.25 M (13%)
20154.90 M (15%)
20165.63 M (16%)
Al-Ghazzawi groupPage 11
5 Year Growth Strategy (Cont’d)
Revenues
Profit margins
20120.47 M (70)%
SR 6M
0M
SR 2M
SR 3M
SR 4M
SR 5M
SR 1M
- 20% 0% 10% 20% 30% + 30%- 10%
Sub Franchise
20130.90 M (70)%
20141.50 M (70)%
20152 M (70)%
20163.94 M (70)%
Al-Ghazzawi groupPage 12
5 Year Growth Strategy (Cont’d)
Revenues
Profit margins
20121.9 M (40%)
SR 6M
0M
SR 2M
SR 3M
SR 4M
SR 5M
SR 1M
- 20% 0% 10% 20% 30% + 30%- 10%
Wholesale
20132.28 M (40%)
20142.74 M (40%)
20153.28 M (40%)
20163.94 M (40%)
Al-Ghazzawi groupPage 13
Sector and business performance objectives
Strategic goals Sector objectives KPIs Joffrey’s KPIs
Financial: Create sustainable and profitable businesses with positive cash flow and return on capital
Diversify the sector income through several brands and business
Operation
Increase existing outlets sales by 15 % on early basisLeverage 50 % of financial needs for growth from internal accruals (2 Million)Increase sub-franchise income from 350 K to 6 Million by increasing sub-franchises to 25
Operation/Financial
Customer: Establish loyal & satisfied customers through effective relationship and follow-up approaches
Development
Increase loyalty cards & matching offering for 90 % of regular customers by end of 2013 Serving customers in time with required quality as per our SOPEnsure and control sub-franchises achieve 90 % evaluation rate on SER by controlling
Operation
Growth: Establish effective organization, management and operational systems to achieve efficient and reliable operations
Increase our brands portfolio by opening a new food & beverage Al-Ghazzawi brand
Development
Open 8 new outlets (6 kiosks and 2 shops) in prime locations (high traffic with higher average income)
Operation
Al-Ghazzawi groupPage 14
Sector and business performance objectives
Strategic goals Sector objectives KPIs Joffrey’s KPIs
Management/Operational Excellence: Establish effective organization, management and operational systems to achieve efficient and reliable operations
Hire qualified managers for this expansion
HR Manage sub-franchises to quality requirements by master franchiserStandardize our ManualFocus and maintain our quality
Operation
Employee Engagement: Develop motivated, competent, loyal and aligned employees to deliver the business strategy
Design and implement a comprehensive HR system in addition to career development.
HR Reduce Turnover of Joffrey’s employees from 30 % to 10 % within 5 years
HR
Al-Ghazzawi groupPage 15
Strategic Initiatives & Actions List
# Challenges Strategic Goal
Key Initiatives & Action Items (KI : Key Initiatives)(AI: Action Item)
2012 2013 2014 2015 2016
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
1
Limited sub-franchise base, which doesn’t utilize Joffrey’s master franchise agreement
Management / Operational Excellence
1.1 Review and update terms and contracts with sub-franchises in local and international locations (AI)
1.2 Update current SER (Service Evaluation Criteria) (AI)
1.3 Establish sub-franchise management function(KI)
X
X
X
2
Food and beverage business in Al-Ghazzawi is limited to Joffrey’s franchise, putting this sector in jeopardize if a conflict with Joffrey’s happened or they decided to seize partnership with Al-Ghazzawi
Growth
2.1 Market study for positioning a new brand(KI)
2.2 Business plan for new brand(KI)
2.3 Establish new brand(KI)
2.4 Feasibility study for creating catering arm (KI)
X
X
X
X
Al-Ghazzawi groupPage 16
Strategic Initiatives & Actions List
# Challenges Strategic Goal
Key Initiatives & Action Items (KI : Key Initiatives)(AI: Action Item)
2012 2013 2014 2015 2016
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
3
Lack of customer data to help in customer relationship management
Customer 3.1 Create information system and database for regular customers (AI)
3.2 Establish CRM function (KI)
X
X
4
Limited financial resources to support expansion plans
Finance 4.1 Secure 50 % of financial needs on yearly basis (approximately SR 2 Million financing)(AI)
5 Full support of top management
Management/ Operational Excellence
5.1 Approve & commit detailed expansion plan based on agreed upon strategy (AI)
X
6
Adequate and qualified support function (HR, Logistics, Finance) that matches planned growth
Management/ Operational Excellence
6.1 Design and implement HR system (KI)
6.2 Design and implement clear financial PnP(AI)
6.3 Prepare supply chain plan that matches expansion required (KI)
X
X
X
Al-Ghazzawi groupPage 17
Strategic Initiatives & Actions List
# Challenges Strategic Goal
Key Initiatives & Action Items (KI : Key Initiatives)(AI: Action Item)
2012 2013 2014 2015 2016
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
7
Reduce employees turnover from 30% to 10%
Employee Engagement
7.1 Design and implement training program(KI)
7.2 Design and implement performance based incentives (AI)
7.3 Design and implement career development plan (AI)
X
X
X
8
Decrease customer complaints by at least 50%
Customer
8.1 Establish a customer service section to collect , analyze and resolve customer complaints (KI)
8.2 Create customer complaints database(AI)
X
X
9 Improve Joffrey’s brand image
Management/ Operational Excellence
9.1 Standardize brand identity (Manual colors, logos and outlets design) (KI)
X
Al-Ghazzawi groupPage 18
Strategic Initiatives List
# Key Initiatives TimeInvestment Needed
(SR)
1 Establish sub-franchise management function 2012 (Q2) TBD
2 Market study for positioning a new brand 2013 (Q1) TBD
3 Business Plan for new brand 2013 (Q1) TBD
4 Establish new brand 2015 (Q2) TBD
5 Feasibility study for catering arm 2013 (Q1) TBD
6 Establish CRM function 2012 (Q2) TBD
7 Supply chain planning 2013 (Q1) TBD
8 Design and implement training program 2012 (Q2) TBD
9 Establish customer service section 2012 (Q2) TBD
10 Standardize brand identity 2012 (Q2) TBD
TBD : To be determined
Al-Ghazzawi groupPage 19
The 5 Year Roadmap
Review contracts (1.1) Establish sub-franchise
management function (1.3)
Establish CRM function (3.2)
Design and implement training program (7.1)
Per
form
ance
Implementation of Operational
Excellence
Scale to high performance
Getting house in order
2012 2013 - 2014 2015 >
Establish customer service section (8.1)
Standardize brand identity (9.1)
Stage 1Stage 2
Stage 3
Market study and business plan for a new brand (2.1,2.2)
Feasibility study for creating a catering arm (2.4)
Prepare supply chain plan (6.3)
Establish a new brand (2.3)
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