CBS GLOBAL

CASE COMPETITION
Let's Build Something Meaningful Together
EXECUTIVE SUMMARY
With our strategy Meaningful Connections, Pandora is on the route to achieve all its targets
Situation
Project Phoenix: Pandora
aims towards being the
1 The suggested strategy involves
most desirable brand in
the affordable jewellery
industry.
Millennials and Gen Z: A
2 key priority to connect
with this customer group
Core Markets: Increasing
3 emphasis is being given to
strengthen the brand
position in USA and China
SOURCES: Team Analysis
Setting the stage
Question
“
How can Pandora grow
its customer base within
Millennial and Gen Z
consumers and achieve
an annual revenue growth
of 6 to 8% in line with the
targets set in the Phoenix
Strategy?
Insights Solution
Implementation
Solution Impact
Net present value
of the incremental
USD
cash flows from
5.25 Bn
robust initiatives under the project
“Meaningful Connections”
constituting of 3 sub-categories:
FOR FAMILY: Tailored
10k Mn
and personalised advice Reduction in scope
Tonnes 3 emissions (CO2)
FOR FRIENDS: Co-creation
FOR YOU: celebrating
Revenue CAGR till
personal achievements 10.4%
2024
Timeline and 1
Risks and Mitigation Impact and Financials
THE STORY SO FAR
Pandora strongly believes in becoming world’s most affordable and desirable company and has developed a solid foundation

Pandora operates on a unique business model … … building a successful scale of operations, fulfilling set objectives

Variations of new innovative OBJECTIVES AT LARGE

400 designs based on consumer
insights and trend research.
• Become the desirable brand in the affordable-jewellery mark
• offer women high quality, modern jewellery at affordable prices
• Achieve sustainable profitability
• Continue with innovation and transformation
Talented employees, from
enables the company to craft
26000 hand-finished jewellery from
100 COUNTRIES 650 MILLION #1 JEWELLERY
affordable prices. VISITORS MANUFACTURER

THE PANDORA
BUSINESS MODEL
Million yearly visits relying USA and China with their
on robust marketing, with an high expected growth
650 unmatched brand awareness provide a good opportunity
and high conversion rates.

After coping with pandemic,

the resultant slump in the
Points of sale with regional industry , Pandora now has
online stores, social media reached a stage where it
7000 and other platforms with data needs to focus on growth
driven growth agenda. and revenue

SHARE OF TOP 7 MARKETS

SOURCES: Case Material, Pandora Annual Report 2020

Timeline and 2
Setting the stage Insights Solution Risks and Mitigation Impact and Financials
Implementation
THE HURDLES AND THE FLYING PHOENIX
The company’s main aim is to increase revenue and gain traction among youth but it faces certain complications which need
to be addressed using tenets of Strategy Phoenix

PROBLEM STATEMENT: Increase Revenue 6 - 8 Percent and Market Share through Gen Z and Millennials in lines with targets set in Phoenix

1 2 3 4
Low organic growth in key markets Preparedness to meet new trends like Adapting to needs of Gen Z and
Building a brand is necessary
like USA and China dependance on Social Media Millennials – source of bulk revenue

STRATEGY PHOENIX provides us with the ideal building blocks to address this
GROWTH PILLARS

BRAND CORE MARKETS

increase brand desirability and reach Increasing focus on key markets like USA
BRAND DESIGN
through holistic communication across all and China which represent more than 50%
the consumer touchpoints of the global jewellery market

DESIGN PERSNALISATION
Customer-group centric innovation and PERSONALI CORE
Relevant and highly customized service
-SATION MARKETS
creation to design for different needs and throughout the whole customer journey
the target groups

SOURCES: Case Material, Team Analysis, Earnings Call Q4 2020 (Pandora)

Timeline and 3
Setting the stage Insights Solution Risks and Mitigation Impact and Financials
Implementation
THE STORY FOR THE FUTURE
From the industry standpoint - AI, digital analytics and the need to cater the younger generation would drive growth

IMPERATIVES

Grow in Key Markets Develop Digital Capabilities Develop Loyal Gen Z and Millennial Following

CAGR OF 5.6% IN KEY MARKETS PROVIDING A LUCRATIVE INCREASING ADOPTION OF SOCIAL

OPPORTUNITY TO STRENGTHEN CUSTOMER BASE MEDIA AND GROWING DIGITIZATION IMPERATIVE TO TARGET GEN Z AND MILLENIALS
In DKK. Mn. In DKK. Bn.

600,000 +19%
1576
1600 7.5%
500,000
+21%
1174 +14%
400,000 1200 32.5%
Baby Boomers 23%

300,000
v +16%
+79% Gen X 38%
800
+6% 47.5%
200,000 +84%
400 of total
Millenials 35% +60%
100,000 market

- 0 Gen Z 4% 12.5%
2021 2022E 2023E 2024E 2025E 2021 2025E 2019 2025E
In-Store Online
China USA

SOURCE : BCG x Alta Gamma (2021): True Luxury Global Consumer Insight 8th edition, Case Material, Team Analysis

Timeline and 4
Setting the stage Insights Solution Risks and Mitigation Impact and Financials
Implementation
TAKING CUE FROM PHOENIX – Being Customer Centric
While From the customer’s view - purpose, innovation, digital channels along with focusing on core areas are necessary
Purpose and Innovation both must be geared in Alternative Medium for China can be In line with Strategy Phoenix core strengths
our strategy looked at must not be boycotted

The Gen Z The Millennial

% of People buying on the Go

48%
72%
47%
Of the people believe Personalization is of
46%
prime importance in any deal
45%
44%
Name Alice Jenny 43%
42%
131 Pandora over index vs. category
average

Age 17 Year old 33 Year Old 41%

40% THE DIFFERENTIATING FACTOR FOR PANDORA
39%
Purpose Gen Z's Millenials • People get reminded of Special Moments or
LOW HIGH LOW HIGH
People they care for when purchasing
pandora.
• They realise the special meaning it carries
Innovation LESS INROADS OF D2C CHANNELS
and expression of personality builds from
LOW HIGH LOW HIGH
within.
Pandora has not been able to establish a strong
• A sense of belongingness is created, which
D2C presence and marketplaces have dominated
Social Media and apps like WeChat are used prominently lasts for long.
LOW HIGH LOW HIGH

SOURCE: McKinsey (2020): What makes Asia-Pacific’s Generation Z different? ,McKinsey (2020): China’s Gen Z are coming of age: Here’s w hat marketers need to know :

Timeline and 5
Setting the stage Insights Solution Risks and Mitigation Impact and Financials
Implementation
MEANINGFUL CONNECTIONS STRATEGY
A wholesome strategy which takes into account the customer pain-points and industry trends by empowering all relationships
MEANINGFUL CONNECTIONS

“ It’s the simple moments together that “ The Social Connect, the Pull will all make it “ Every Connection - be it a tree or a single
changes us forever” worthwhile” consumer matters ”
FOR FAMILY FOR FRIENDS FOR YOU

KEY FEATURES KEY FEATURES KEY FEATURES

New Source – Personalized Relationship Venturing into new Leverages Social Virality through Customer Branding Sustainable Low Cost
Data Collection and Purpose markets Media Design

GIFTERS AND HINTERS 2.0 CO-CREATION AND CONNECT PROGRAMME CELEBRATING LIFE

A simple extension wherein we ask the user to
provide the email address of a loved one and
leveraging AI and ML gives tailored advice to
the gifter .
Co-Creation – A Novel tactic that enables the
users to co-create jewellery together live.
Connect Programme -- A revolutionary tactic
which empowers social connections, People can
connect by scanning jewellery.
An ad campaign geared towards celebrating
you and yourself – append your achievements
and create a jewellery to celebrate yourself.
Brand Building through advocating our impact
on environment and purpose.

.
Based on the core tenets of Project Phoenix, this Customer Centric Strategy will create massive impact by
EMPOWERING ALL RELATIONSHIPS

SOURCES: Team Analysis

Timeline and 6
Setting the stage Insights Solution Risks and Mitigation Impact and Financials
Implementation
DEEP DIVE – MEANINGFUL CONNECTIONS FOR FAMILY
A simple cost effective extension can create customer delight: help us gain traction in digital channels and improve data analytics
MEANINGFUL CONNECTIONS
“ It’s the simple moments together that changes us forever”
Customer Side RATIONALE
The E-Mail gives AI ML
suggestions on what the hinter
likes We get evolving data on gifter’s preferences
4 01

Maria gets a prompt Core Strengths emphasized - Personalization

to enter E-Mail
02
Address of her loved
ones. STEVE
03 Directly appeals to younger demographic
3
1

04 Network Effect – a nexus of customers

2
05 Feasibility – Easy and effective execution
MARIA On occasions that
matter, Steve gets an
Major Capabilities developed to meet industry trends
Pandora

email with a link

Steve Doesn’t need

to go through pain
of thinking what she
Digital Gen Z and Millennials
Happy family likes
SOURCES: Team Analysis, Case Material, BCG

Timeline and 7
Setting the stage Insights Solution Risks and Mitigation Impact and Financials
Implementation
DEEP DIVE – MEANINGFUL CONNECTIONS FOR FRIENDS
Co-Creation provides an element of social belonging while helping us meet most of the industry trends
MEANINGFUL CONNECTIONS
“ The Social Connect, the Pull will all make it worthwhile”

CO-CREATION EXPLAINED CUSTOMER SIDE RATIONALE

Millennials with their high inclination for

01 innovative product may love to have it.

ALICE MEETS JENNY IN A PARTY

Social Media and connectivity will be
02 leveraged to a great extent.

With a trendy, cool and a hip design and

03 concept, it will create buzz among customers
They wish to exchange social
media handles on the move 04 Network Effect – a nexus of customers

Just by holding her QR Code enabled Genesis 05 Feasibility – Easy and effective execution
Charm and asking Jenny to scan it enables her to
share all social media handles/ websites he has
stored
Major Capabilities developed to meet industry trends

Alice loves it as he appears cool and

he inadvertently advertises our
brand Key Markets Digital Gen Z and Millennials
SOURCES: Team Analysis

Timeline and 8
Setting the stage Insights Solution Risks and Mitigation Impact and Financials
Implementation
DEEP DIVE – MEANINGFUL CONNECTIONS FOR FRIENDS
A revolutionary idea can expand the utility of jewellery and revolutionize the way we think about it
CONNECT – Explained
CHINA
STEP 1
Wang Li and her friends have
a WeChat Group where they
decide to start making some
customized jewellery
STEP 2
On a WeChat Mini Programme,
Embedded link opens where
they work collectively
STEP 3
They are beaming as they have an item which helps them
remember the fond memories they have created together as a
group
SOURCES: Team Analysis
Setting the stage
MEANINGFUL CONNECTIONS
“ The Social Connect, the Pull will all make it worthwhile”
RATIONALE
Allows us to enter strongly in China, playing
01 on Chinese consumer preferences and habits
Social Media leveraged, given that 29% of
02 millennials buy something via social media
USA
High receptiveness, such that even if one
03
Maria goes on a website and member becomes a customer, friends nudged
sends a link to her friends or
sends an invite
04 Network Effect – a nexus of customers
They are able to collectively
work together, they have 05 Feasibility – Easy and effective execution
loads of fun
Major Capabilities developed to meet industry trends
Digital Gen Z and Millennials
Timeline and 9
Insights Solution Risks and Mitigation Impact and Financials
Implementation
DEEP DIVE – MEANINGFUL CONNECTION FOR YOU
Celebrating self achievement: the reason people buy Pandora jewellery
MEANINGFUL CONNECTIONS
“”Every single connection be it a single tree or a single consumer matters”

RATIONALE
An ad campaign geared towards celebrating you and your self.
On any major event or milestone for you, buy a charm and append Millennials who with high inclination for
that to the jewellery you are creating for your life 01 innovative product may love to have it.

GRADUATION WEDDING 51 percent of the people want to connect with

02 brands that have a purpose

With a trendy, cool and a hip design and

03 concept, it will create buzz among customers

04 Building our Brand on Values

05 Feasibility – Easy and effective execution

Major Capabilities developed to meet industry trends

18TH BIRTHDAY PROMOTION MOTHER

Gen Z and Millennials

SOURCES: Team Analysis, BCG x Alta Gamma (2021)

Setting the stage Insights Solution

Timeline and
Risks and Mitigation Impact and Financials 10
Implementation
POSITIONING BRAND AS SUSTAINABLE
Reinforcing the goodness people spread by using our products
MEANINGFUL CONNECTIONS
Being better with friends

RATIONALE

Made with love 01

80% of the people in millennials and Gen Z
would want to pay extra for Sustainability

02 Appeals to Gen Z as a brand with purpose

CALCULATE YOUR IMPACT Building our brand is essential in this

03 market to prosper

“You saved 50 tonnes of Co2 which emissions

“Each Pandora piece passes through an
average of 25 pairs of hands during the
crafting process”
Attaching story of a maker, how it is
changing his life, and having a personalized
message on what the jewellery symbolizes
will add an element of personalization and
will pull customers more adding a sense of
attachment.
which equates to 5k gallons of gasoline for 6
homes electricity for a year”
The website will show the Impact generated
when a user makes a Pandora purchase.
Before purchase adding impact figures on how
sustainable this purchase is compared to
alternatives will also bring about a sense of
purpose to our brand.

SOURCES: Annual Report, Case Material, Conference Board Global Consumer Confidence survey

Setting the stage Insights Solution

Timeline and
Risks and Mitigation Impact and Financials 11
Implementation
TIMELINE AND IMPLEMENTATION
Keeping in line with Phoenix’s Launch and leverage strategy, extra caution needs to be taken during pilot

Launch in one region only if significant In Accordance with Launch and Leverage, any pilot will be started on a very cautious basis and only when its certain that we
value can be added can reach significant scale will we roll out in other countries.

Extra time given to tasks which need preparation

Level of Success

2022 2023 2024 2025

June Dec June Dec June Dec June
CHINA PILOT

FOR FAMILY Gifters and Hinters 2.0

Co-Creation
Co-CreationProgram
Program
FOR FRIENDS
Connect
ConnectPlatform
Platform

Level of Success
Celebrating
CelebratingLife Campaign
Life Campaign
US PILOT
FOR YOU
Sustainable
SustainableJewellery
Jewellery
EUROPE LAUNCH

ASIA LAUNCH
US Pilot US Launch China Launch China Pilot Launch in other
GLOBAL LAUNCH
geographies

SOURCES: Team Analysis

Setting the stage Insights Solution

Timeline and
Risks and Mitigation Impact and Financials 12
Implementation
RISK ANALYSIS AND MITIGATION STRATEGIES
Analysing the potential roadblocks and finding strategies to counter them

RISK EXPLANATION MITIGATION

High

Unclear laws, inconsistent

Increasing organisational agility
regulatory interpretation and
Regulatory Issues to be able to respond to rapid
compliance in the markets
and unpredictable changes
(China) we are expanding

Competition from the non- Building story behind purchases

jewellery players in adjacent
Probability

Brand relevance and and adding differentiation

categories introducing new based on emotions.
competition
collections or expanding their Consumer-centric innovation.
assortment

Multiple sourcing of materials

Ability of Procurement of raw
Supply chain Diversified production facilities
materials and to produce and
disruptions Having adequate buffer stock
distribute finished products
in case of temporary disruption
Low

Low High Fluctuation in prices of raw

Fluctuation in Hedging annual commodity
Impact materials and also currency purchases, exchange rate and
prices
exchange rate risk interest rate risk.
After Mitigation Measures

SOURCES: Case Material, Pandora Annual Report 2020

Setting the stage Insights Solution

Timeline and
Risks and Mitigation Impact and Financials 13
Implementation
IMPACT GENERATED
To conclude, let’s see how numbers speak for our strategy Meaningful Connections

Impressive Topline Growth of 10.4% CAGR puts Our increasing bottom line and giving us massive Market Share in Key Markets will also increase
MC in a league of its own Competitive Advantages significantly lead by China and USA…..

Revenue (In DKK Millions) EBIT Margins (Percentage) CAGR Growth 2020-23 (Darker implies more growth)
28,000

0.3
25,500
0.26

23,000
0.22

20,500 0.18

18,000 0.14
2020 2021 2022 2023 2024 2021 2022 2023 2024

With Meaningful Collections Without

With an impressive NPV the project does massive Due to a shift in digital and sustainability venture, Pandora is well placed digitally as the social
value addition emissions will decrease ventures we undertook grew online Sales by 18%
Scope 3 emissions(CO2) reduced by 10k Mt tonnes
which is equal to
18%
USD 5.25 Billion 2600 1.3 Mn Gallons Compounded Annual
Passenger vehicles driven of gasoline consumption Growth Rate
in a year observed

SOURCES: Team Analysis, Case Material, Pandora Annual Report 2020

Setting the stage Insights Solution

Timeline and
Risks and Mitigation Impact and Financials 14
Implementation
FINANCIALS
Growth Projections – With Meaningful Connection Notes- Important Assumptions
Majority growth rate captured in Charms and bracelet segment as they would be the
1 main focus in our new strategy

2 Decreasing cost of sales due to improved efficiency and operational leverage

3 Increasing margins due to economies of scale and post pandemic recovery

Nominal growth according to industry projections in the coming years if the strategy
4 is not adopted

As sales in countries like US which have a higher effective tax rate pick up, we see an
5 overall rise in the effective tax rate

Growth Projections – Without Meaningful Connection NPV Calculations

SOURCES: Team Analysis

Setting the stage Insights Solution

Timeline and
Risks and Mitigation Impact and Financials
16
15
Implementation