Cases Review

Zupi E-commerce
The premise: One of the top e-commerce player has stalling revenue growth compared to its
peers. Our goal is to improve that growth as well as find the gaps with competitors.
The basic sentence of the structure: Looking at revenue and cost benchmarked to competitors is
one way.
Revenue is the focal point here: Revenue of the ecommerce is a function of the transaction
amounts that occur (or GMV). GMV can be a function of (traffic * conversion rate *
spending/person). GMV can also be seen from supply side (Number of vendors * average
spending by vendor).
Understanding this, analyzing the differences between these metrics allows us to unearth
problems with traffic and conversion rates to be low.
We can then differentiate problems of Low traffic and low conversion to be two different ones.
Zupi E-commerce
Low Traffic (No one downloads or opens the app, if
they did before, the have deleted it)
Customer Experience: Service and technology issues
Branding issue: Ad placement, Appeal to social lead
Low conversion (They have opened the app and
they don’t click and purchase)
Choice issue: Category, Quality, Price
Payment issue: Can people easily access payment
Promotions issue: Discounts
Product Category
We explore the different product categories provided data on:
◦ Growth outlook
◦ Commissions as %
◦ Revenue portion

From the perspective of what we can do, think of things the company has control over:
◦ Is commission to low, is this optimal pricing?
◦ Are we in the wrong product category? What are ways we can increase a product category?
◦ Supply or Demand problem
◦ Supply side  Not enough vendors
◦ Demand side  Not enough customers interested in available category (Price, Product, Promotion)
RefreshNow
A top 3 beverage producer in the UK has approached us for help in designing a product launch
strategy.
1. What parts of the production process is Refresh now part of?
◦ Design, marketing and sales
◦ Production, bottling and packaging
◦ Distribution  Retail outlets

2. What products it currently has? Considerable number of brands

3. Manufacturing plants  5 large bottling plants throughout the country
4. Distribution scope – major retailers
Refresh Now
 Which market to enter? Size, Growth, trends, profitability, segmentations available. Each one
knowing the competitive landscape (number of players, or market share breakdowns)
Competition: Response of competition

Marketing: Pricing, Promotions (Advertising, Branding, Discounts), Product communication.

Sales (Distribution, Product Training for communication),
Finance: Budgets, financing (debt, cash)
Operations: Capacity, Supply chain (Contracts negotiation) , Machineries, Hiring, Production
Methods (Efficiency concepts)
Refresh Now - Factors in selecting
adequate plant
Economic Factors Non-Economic Factors
Required investment Space
Matching plant growth with the product Local Labor pool
Speed of installation Material supplies
Logistics Skills and training needs
Comparing other plant operating cost with existing Commitments to and support from selected plant
(Maybe labor or supply chain) community
Thrill Park –Acquisition Case
 Budget
 Expected profit from the company (Broken down to revenue and cost)
 Expected synergies
Ace Hardware - Retail Valuation
The client is Ace Hardware, and the client is requesting us to value the company’s fair stock
price. They would like to know how we would go about doing so.

Structure:
Income Statement: Sales, Cost of Goods Sold, Operating Expenses, (Other income) – Interest
expense, Tax Expenses, Dividends
Balance Sheet
Cash Flow statement
Income Statement
1. Understand what is the main formula or driver for retail (Guesses: SSSG)
2. Cost of goods sold driver, is it just margin?
3. Operating margins, is it just % of sales?

Revenue: Price x Volume. Volume is amount of selling space. Price is (Annual sales productivity or Rupiah
spent/sqm). Each one has its own growth rate.
◦ Selling space: Old stores + New Stores – Closings. Spaces  No of stores opened * Average size per store. For new stores, it
needs to be time weighted.

Cost of Goods sold: While revenue is calculated as a whole, margins are divided based upon products. Thus several
steps are taken:
◦ Assume a certain % of products are sold ever year (using historical to guide)
◦ Assume a margins for each product line
◦ Calculate Gross Profit.
Income Statement (Cont.)
Operating Expenses:
◦ For General admin, use % of sales.
◦ For selling deeper analysis can be done
◦ Salaries: No. of Employees * Average salary/ Employee. No of Employees: Employees per sqm
Revenue Tree
Revenue Forecast

Rp/Sqm x SSSG x Selling Space

Old space + New space - Closings

Stores opened x Size per store

Gross Profit process
Categories

Home Improvement Lifestyle Toys

CAT % of Revenue
Revenue by CAT GPM by CAT GP by CAT
by
Blueblood distribution
Blueblood distribution is a $300m, nationwide distributor of wines and spirits. Their main
customers are wine and spirits retailers, major grocery stores and food marts. They currently
own 22 distribution sites and are trying to determine what factors make some sites profitable
than others.
Basically must we are tasked to:
 Decide metrics that will be useful for profitability
 Gather those data
 And what actions can be done (close, reduce, or leave open)

In
Blueblood distribution
What things to clarify?
 What different wines and spirits does the company distribute and does each distribution center have different types of products?
What the mix? Are the different types of products require different cost associated with packaging for example? Are the products sent
to the same locations?
 Each distribution center serves a certain designated area, are we to assume that? Or are there sometimes distribution centers that
are used for the same grocery stores in a region for example.

Initial considerations:
 Because we are a distribution company, it might be useful to know how many different locations each one of these locations serve
(could cause inflated cost)
 From the cost perspective, proximity might be the most important. But also product mix, equipment (such as vehicle as well) used,
packaging, labor. (Looking at cost structure will be useful)
 Is it efficiency? (cannot fulfill demand), packaging, or logistics (Not enough trucks, Too many trucks required), distances are further.
 How many orders do we actually get?
HaloDoc
 Halodoc is a digital healthcare service. It currently aims to be a market leader in the industry
and would like us to set up its short term and long-term strategies.
Revenue streams:
 Pharma & Lab testing
 E-Consultations

At the core, the company is a large healthcare focused e-commerce with differentiation in:
Prescribed Medicine – due to network of doctors
Privacy based packaging
Connecting to nearest pharmacy and more uniform pricing (negotiated with the company)
Trends
Consultations
Covid-19 has caused people to avoid hospitals
Could help tackle privacy reasons
0.4 doctors per 1000 population
Healthcare E-commerce
60% of market is prescribed medicine
Standardization becomes important due to
existence of fake pharmacies
HaloDoc: Consultation
Volume: Number of visitors * % of people that decide to consult
Price: Prices * % of commission

Basics there will be specialist vs. non-specialist. Also for lab testing, how are we making money?

Are we currently charging a % out of each transaction? Would there be differences in the fees?
E-commerce store
Number of visitors who buy from Halo Doc
 Prescribed medicine market
 OTC market  One thing not considered is how do buying decisions occur at the OTC level.
◦ We have connected by convenience stores, such as Watson. Are there other venues?
Head of corp dev
Shareholders, capital raising, financial modelling. M&A
Strategic partnerships  Partnerships, new creation. With A, what can we do. New product
development.
Model work
 Income Statement
 Balance sheet
 Cash flow statement

Financial Questions:
1. Benefits of cash vs. stock transaction
2. How do dividends affect equity value vs. affecting the firm value
3. How does overstatement of depreciation affect financial statement
4. What scenarios can cause dilution in shares?
 Bank Mantap
A bank that current mainly sells pension loans to ex employees of Mandiri has asks us how it can reach the level of BCA in terms of asset
size. (Metric is the most important, asset size, loans and deposits)

Asset Size:
1. Funding
2. Lending
Expand current base or add base. Number of lenders x Ticket Size.
Expanding Current Base
3. Different demographic
4. Distribution Channel
5. Geographic

Adding base is about expansion to new businesses which usually relies upon the core competency of the company.
Resources
Company Data
Industry Associations
Global Organizations: World Bank, OECD, ADB.
News
Government Organization or Ministry Department Data
Competitive Analysis  Competitors public files, Public Companies.