••••••••••••••••••••••••••••••••••Victory SupermarketExpansion Strategy
TEAM 33Aydan MasmalizadehAzad BagirovShahlar BayramovFarid Akberov
Overview
Market Environment
Marketing Strategy
Financial Analysis
Risk and Mitigation
Conclusion
1
2
3
4
5
6
OVERVIEW
Retail / Grocery
Competitive Market
Funding Requirement
Obj
ectiv
es
Focus on quality & service
Increase Market Share
Keep the Chain Viable
Overview Environment Marketing Financial Risk Conclusion
Kingston
Twin city
Marlborough
Lancaster St
The OlderConventionalMarket Squares
Expand Rapidly
Derry Hingham
Decision Tree
Expand Slowly
DECISSION MATRIX
Key factors Expansion Rapidly New Market Square
Competition
Up-front cost
Differentiation
Size of market
Sustainability
Positioning
Total 1 7
DERRY VS HINGHAM
RECOMMENDATION
1998-1999 2000-2005 2006-2008
New geographies, developing profitability
Increase efficiency, develop performance
Grow faster, acquire business
Penetrate & Develop ExpandRestructure
COMPETITORS
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.50
50
100
150
200
250
Size: 1991 Revenues in bill
# of
sto
res
Demand
Market Strategy
Funding
Distribution
Demand Market Strategy FundingDistribution
under 14 15-24 25-34 35-44 45-54 55-64 65+0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Demand Market Strategy FundingDistribution
under 14 15-24 25-34 35-44 45-54 55-64 65+0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Demand FundingDistributionMarket Strategy
3 WAVES
Strategy
• Specialize • Differentiate• Personalizes
Restructure
• Quality-driven• Go niche • Grow faster
Penetrate • Extend scope• Greenfield• Expand
synergies
Expand
1998
2001
2005
Demand Market Strategy FundingDistribution
Depend on Supervalu
• Flexible• Meet our
needs• Greater
efficiency
After 5 years
• Increase sales volume
• Expand markets
Integrated firm
• Own wholesalers & retail
• Decrease cost
Demand Market Strategy FundingDistribution
Wholesaler
Supplier
Supplier
Supplier Retail Store
Retail Store
Retail Store
Demand Market Strategy Distribution Funding
Capital MarketPartnership
$ 39 M
$ 100 M+
$ 139 M
Victory
Supervalu
28%
72%
Total
Vote authority
Fleet financing
5 Years
Bank Loan
FINANCIAL ANALYSIS
Derry Hingham Derry & Hingham$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,484,049
$49,484
$894,121
NPV
Derry Hingham Derry & Hingham0%
5%
10%
15%
20%
25% 21.00%
3.3%
14.00%
IRR
FINANCIAL ANALYSIS
Derry Hingham Derry & Hingham0
0.5
1
1.5
2
2.5
3
3.5
4
2.5
3.73.5
PPFINANCIAL ANALYSIS
SENSITIVITY ANALYSIS
SCENARIO ANALYSIS
optimistic base pessimistic
-5000000
-4000000
-3000000
-2000000
-1000000
0
1000000
2000000
3000000
by changing sales 10%
Choosing Derry, reject Hingham
Increase sales volume
Cost Control, Consumer Loyalty
RISK PYRAMID
Economic downturn
Short-term Financing
Competition
CONCLUSION
1998-1999
Set up just one store Derry
2000-2005
Increase market share
-variety of products and services-USP-POSITIONING
2006-2008
Continue to expand
What if expansion fails?
ALTERNATIVE PLAN
Continuous CustomersAlready Trained StaffLower Cost of Switching Higher
$117 <$177
$ 25 <
Feed family real foodFrom our family to Yours
Most Cleanest
Friendly Personalized Service
Socially Responsible
Exciting Shopping
Strategic Points of Difference
Thanks For Attention
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