Signet - Strategic Audit - V 4

8/10/2019 Signet - Strategic Audit - V 4

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SIGNET STRATEGICAUDIT


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TABLE OF CONTENTS

I. Current State

II. Environmental AnalysisI. External (Opportunities and Threats)II. Internal (Strengths and Weaknesses)

III. StrategiesI. Alternatives

II. e!ommended

I". Implementation

". Evaluation and Control


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CORPORATE OVERVIEW

#ounded in $%&%

'ormerly knon as the atner roup

Septem*er $%%+ !hanged its name to Signet roup pl!.

Septem*er $$, -/, moved its primary sto!k market to the 0e 1ork

Sto!k Ex!hange, !hanging its name to Signet 2eelers 3imited and

moved its !ountry o' domi!ile to 4ermuda

#e*ruary -$&, Signet 2eelers 3td. agreed to *uy 5ale Corporation

Signet is the largest spe!ialty retail 6eeler in the 7S, 78 and Canada


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CORPORATE OVERVIEW

Strategi! 9osture:;Our goal is to 'urther enhan!e Signet


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CORPORATE OVERVIEW

Board of directors The sustaina*le enhan!ement o' *usiness per'orman!e and shareholder value. Betermining all ma6or poli!ies, e''e!tive strategies and management are inpla!e , assessing per'orman!e, revieing the systems o' internal !ontrol andsetting poli!y in!luding that relating to so!ial, ethi!al and environmental matters.

Board members1. H. Todd Stitzer, Chairman

2. Michael W. Barnes, Chief Executivefficer and !irector

". #ir$inia C. !rosos, !irector

%. !ale W. Hil&ert, !irector

'. Helen E. McClus(e), !irector

6. Marianne Miller *arrs, !irector

7.

Thomas +. *las(ett, !irector8. o-ert . Stac(, !irector

9. Eu$enia M. /lase0icz, !irector

10. ussell Walls, !irector


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CORPORATE OVERVIEW

Audit Committee Compensation

Committee

Nomination and

Corporate Governance

Committee

Virginia C. Drosos member member

Dale W. Hilpert member

Helen E. McCluskey member member

Marianne Miller Parrs Cairperson

!omas G. Plaskett Cairperson Member

"o#ert $. %tack member

Eugenia M. &lase'ic( member

"ussell Walls member Cairperson


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CORPORATE OVERVIEWExecutive officers (Top management review)

1. Michael W. Barnes

2. Shaun Carne)

". Se-astian Ho--s

%. Ed Hra-a(

'. Mar( en(ins

. Theo illion

3. Mar( 4i$ht

5. onald istau

6. o-ert Tra-ucco


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CORPORATE OVERVIEW


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FINANCIAL RESULTS

)in millions e*cept per sare and

store data+,-.- ,-.. ,-., ,-./ ,-.0

%ales $3,273.6 $3,437.4 $3,749.2 $3,983.4 $4,209.2

1perating 2ncome 264.5 372.5 507.4 560.5 570.5

Net 2ncome 157.1 200.4 324.4 359.9 368.0

Diluted Earnings Per %are 1.83 2.32 3.73 4.35 4.56

Working Capital 1,814.3 1,831.3 2,158.3 2,164.2 2,356.9

Capital E*penditures 43.6 57.5 97.8 134.2 161.8

%tores 1,913 1,857 1,853 1,954 1,964


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FINANCIAL ANALYSIS

Current &erformance for fiscal )ear 271%

Total sales: &,-%.- million (#is!al -$+: +,%/+.& million), up D.F

Operating margin: $+.DF (#is!al -$+: $&.$F), don .GF

Biluted earnings per share: &.DG (#is!al -$+: &.+D), up &./F

E!ommer!e sales: $G&.$ million (#is!al -$+: $-%./ million), up -G.&F

In!reased >uarterly dividend in #is!al -$& *y -DF

A!hieved return on !apital employed o' -D.-F


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ENVIRONMENTALANALYSIS

External Environment8 &&ortunities andthreats

0atural Environment

9EST Analysis

9orter


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ENVIRONMENTALANALYSIS

*olitical94e$al Environment

Sta-le, &redicta-le

Economic Environment ecession, come -ac(

So!io!ultural Environment

Tourism re*ound

Te!hnologi!al Environment E!ommer!e


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Summary o'External#a!tors

(E#AS?atrix)

%trategic 3actors 'eigt "ating Weigted

score

Comment

1pportunities

O1 Geographical closeness o !"rope as a large

mar#e

0.09 4 0.36

O2$igns an% &ig"res sho'ing (ncrease% ).*.

cons"mer spen%ing in he secon% hal& o& 2013

as a promising ren%

0.15 5 0.75

O3!conomic reco+er, in ).*. speci&icall, an%

!"rope an% ).$.- generall, as mar#es

0.09 4 0.36

O4igh raes o& online shopping /increase%

inerne &"ncionali, an% sec"ri,

0.08 3 0.24

O5 oliical sabili, an% promising aaion

policies in he ).*.

0.08 4 0.32

O3 e'elr, inerese% o"rism 0.09 4 0.36

!reats

1 he 2008 recession hi ha a&&ece% he mar#e

gro'h raes greal,

0.10 4 0.40

2 he ).$. e'elr, %eclining mar#e being he

larges mar#e 'orl% 'i%e

010 4 0.40

3 "somer &ear since 2008 an% he rise o&

s"bsi"e

0.07 3 0.21

4 he &ierce compeiion among he presen

po'er&"l compeiors

0.15 5 0.75

!otal scores ? 1.00 ? 4..4


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INTERNAL FACTORANALYSIS

Strengths Strong store *rands

4rand di''erentiated and ex!lusive mer!handise

Outstanding !ustomer servi!e Advertising e''e!tiveness

Strong supply !hain

High >uality store *ase

Inhouse !ustomer 'inan!ing (7S) #inan!ial strength and 'lexi*ility


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INTERNAL FACTORANALYSIS CONTD

Weakness Competitive market

Investments in resear!h and development (B)

lo*al penetration High !ost o' opening ne stores


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INTERNALFACTORSANALYSIS

SUMMERY( IFAS )

2nternal 3actors Weigt "atingWeigted

scoresComments

%trengts

$1 $rong sore bran%s 0.15 5 0.75

$2 ran% %i&&ereniae% an% ecl"si+e merchan%ise 0.10 4 0.40

$3 O"san%ing c"somer ser+ice 0.05 4 0.20

$4 -%+erising e&&eci+eness 0.10 3 0.30

$5 $rong s"ppl, chain 0.05 3 0.15

$6 igh "ali, sore base 0.05 2 0.10

$7 (nho"se c"somer &inancing 9)$: 0.10 4 0.40

$8 ;inancial srengh an% &leibili, 0.10 3 0.30

Weaknesses


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STRATEGICFACTORSANALYSIS

SUMMERY(SFAS)

%trategic 3actors 'eigt "ating Weigted

score

Comment

%trengts

$1 $rong sore bran%s 0.10 4 0.40

$2 ran% %i&&ereniae% an% ecl"si+e 0.10 4 0.40

$3 -%+erising e&&eci+eness 0.10 3 0.30

$4 ;inancial srengh an% &leibili, 0.10 4 0.40

Weaknesses


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TOWS MATRIX

External Opportunities (O)

1. Increased U.K. consumer spending2. Economic recovery in U.K.specifically and Europe and U.S.Agenerally3. Jewelry interested Tourism

External Threats (T)

1. Competition with cheap Asian replicas2. The 2008 recession hit that affectedthe market growth rates greatly

Internal Strengths (S)

1. Strong store brands2. Brand differentiated and exclusive3. Advertising effectiveness4. Financial strength and flexibility

SO"Maxi-Maxi" Strategy

1. New collections design for U.K andU.S.A Markets2. New touring oriented collections(souvenirs)

(R&D department or business unit withjewelry designers and market researchfunctions)

ST"Maxi-Mini" Strategy

1. Distributing for other brands (competitorsalliance)

Internal Weaknesses (W)

1. Competitive market2. Global penetration

WO"Mini-Maxi" Strategy

1. Full spectrum pricing2. New tourism oriented collections(souvenirs)

(R&D department or business unit with

jewelry manufacturing effectiveness,cost reduction and market research)

WT"Mini-Mini" Strategy

1. Proceed with caution for new investments2. Optimize operational costs


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ALTERNATIVE STRATEGIES

+ro0th : !iversification ;con$lomerate 9 Esta-lish ?! Business unit

@e0 *roducts and services @e0 *ricin$ s&ectrum

(9ros: high possi*ility o' additional revenue. Cons: *rands loose its original ni!he market or

di''erentiation)

Sta-ilit) 9 *rofit Esta-lish ?! Business unit

@e0 o&erational &rocedures

HM revam&in$ ;incentives s)stem>

(9ros: immediate pro'it. Cons: limiting additional pro'it, operational overhead)

etrenchment : turn around ;Mar(et ali$nment ? #alue -asedmana$ement> (9ros: ?arket alignment. Cons: loosing distinguished designers, salesmen Jet!.)


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RECOMMENDED STRATEGY

The recommended strate$) is the sum of allthe a-ove strate$ies. ne can ar$ue the sumof them is a ;proceed with caution> strate$).


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BUSINESS STRATEGIES

Com&etitive !ifferentiation 9 *roducts and services

4o0er Cost : manufacturin$ and lo$istics

Coo&eration =lliances 9 distri-ution shi&


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FUNCTIONAL STRATEGIES

Mar(etin$ and Sales pri!ing Tourism E!ommer!e


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New Business Unit a ne B *usiness unit designed to !onne!t !onsumers to

marketers and mer!hants is mandatory.

Strategi!Alliances ith ?arket leaders as adistri*uter.

Acquisition o' related logisti!s !ompanies to in!reasethe !ompetitive advantage

Short termKImmediate strategyImplementation L $st year


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3ong Term strategy ImplementationL -nd to &th year

ut&ut Controls 0um*er o' allied !ompetitors (produ!t lines and spe!trum annually) Standardi@ed produ!t invention system (num*er o' ne lines and produ!ts >uarterly)


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MA

Signet - Strategic Audit - V 4

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