1 / 34

Business and Financial Analysis - Case Study of Sa Sa International Holdings Limited

Business and Financial Analysis - Case Study of Sa Sa International Holdings Limited. Wan Shiu Kee Convener of HKIAAT Accounting and Business Management Case Competition/ Vice Principal – CCC Kei Heep Secondary School. Agenda. The HKIAAT Accounting and Business Management Case Competition

mansour
Download Presentation

Business and Financial Analysis - Case Study of Sa Sa International Holdings Limited

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Business and Financial Analysis - Case Study of Sa Sa International Holdings Limited Wan Shiu Kee Convener of HKIAAT Accounting and Business Management Case Competition/ Vice Principal – CCC Kei Heep Secondary School

  2. Agenda • The HKIAAT Accounting and Business Management Case Competition • The Case – Sa Sa International Holdings Ltd. • Business performance evaluation • Sustainable development plan • Q&As

  3. HKIAAT Accounting and Business Management Case Competition • Aims to enhance students’ ability in using accounting information for business development and their generic skills, such asresearch, analysis, team-building, communication, critical thinking, creativity and problem-solvingas required by today’s business world. • Provides students with fundamental accounting and business management knowledge and skills, andto develop their positive values and attitudes. • Comprises two rounds: written report and oral presentation. • Written report based on Annual Report of a listed company • Six teams will be shortlisted to enter the final competition – oral presentation, to present the key points of their reports.

  4. The Case – Sa Sa International Holdings Limited • Sa Sa International Holdings (Sa Sa) is the selected company for case study in Competition 2009-2010. • A leading cosmetics retailing group operating in Asia. • Two scope of business areas: • Cosmetic retail – selling over 400 brands, including its own-brands and exclusive products • Brand management – being sole agent for many international cosmetic brands in Asia. It accounts for 38% of its total retail turnover. • In 2008/09, the turnover from the continuing retail and wholesale business rise 12% to HK$3,609 while profit from the continuing operations increased by 14% to HK$316 million.

  5. The Case – Sa Sa International Holdings Limited (cont'd) • Requirements for written report: • Evaluate the business performance of Sa Sa in the following aspects • financial position • Relevant to BAFS Compulsory Part – Basic Ratio Analysis and Accounting Module - Financial Analysis • marketing management • Relevant to BAFS Business Management Model – Marketing Management • Operation management • Relevant to BAFS Business Management Model – Human Resources Management • Develop a sustainable development plan for next three years

  6. Evaluation of Business Performance – Financial Position • Study of different financial ratios to analyze the following aspects:- • Profitability • Liquidity • Asset management • Investment appraisal • Types of financial ratios to be analyzed may vary from industry to industry • e.g. "Book value per share" is only required for retail, banking, and property industries • Compared with its competitors when necessary

  7. Evaluation of Business Performance – Financial Position • Profitability • (a i) Net profit margin = Profit for the year/ Turnover *100%

  8. Evaluation of Business Performance – Financial Position • Profitability (cont'd)

  9. Evaluation of Business Performance – Financial Position • Profitability (cont'd)

  10. Evaluation of Business Performance – Financial Position (2) Liquidity

  11. Evaluation of Business Performance – Financial Position (3) Asset Management

  12. Evaluation of Business Performance – Financial Position (4) Investment Appraisal

  13. Evaluation of Business Performance – Financial Position (5) Other Important Ratios

  14. Evaluation of Business Performance – Financial Position (5) Other Important Ratios

  15. Evaluation of Business Performance – Financial Position (5) Other Important Ratios

  16. Evaluation of Business Performance – Financial Position (5) Other Important Ratios

  17. Evaluation of Business Performance – Financial Position (5) Other Important Ratios

  18. Evaluation of Business Performance – Financial Position (5) Other Important Ratios

  19. Evaluation of Business Performance – Financial Position (5) Other Important Ratios

  20. Evaluation of Business Performance – Marketing Management Market Environment • Key competitors: • Bonjour (卓悅), Angel (天使化), Sephora • Market opportunities • Huge potential in Mainland China market • The inflow of Mainland visitors in domestic market

  21. Evaluation of Business Performance – Marketing Management Target markets • Geographic • Core markets: • Hong Kong, Macau and Mainland China -> representing 84% of total turnover • Regional markets: • Taiwan, Singapore and Malaysia -> accounted for 11% of turnover • Target customers • Customers who are seeking value-for-money

  22. Evaluation of Business Performance – Marketing Management Marketing strategies • Positioning • A one-stop cosmetics specialty store offering a broad product range with a full price spectrum • Place/ Distribution • Diversification of distribution network -> a total of 152 "Sasa" stores and 25 specialty stores/ counters in various markets • Store locations are prime • Offer trendy and comfortable shopping environment -> customers can choose different products at ease • Planning to appoint local distributers for the wholesale business -> can help sharpen the market penetration • Online portal – Sasa.com -> reach worldwide customers

  23. Evaluation of Business Performance – Marketing Management Marketing strategies • Product • Offers a comprehensive product range of 200 brands targeted at diversified customer base • Also develops its own-brands • Product selections tailored to Chinese and Asians • Also offers value-added services, such as free skin analysis, free make-up and beauty treatments • Price • A broad price range to entertain a wide customer base • Diversification of pricing strategy also help to reduce the impact of economic environment • Can offer competitive prices due to • Strong bargaining power with bulk purchase • Long-term relationships with vendors

  24. Evaluation of Business Performance – Marketing Management Marketing strategies • Promotion • Aggressive promotion efforts, including print advertisements, public relations activities and online advertising (Sa Sa is a top 10 of online advertisers in 2009) • Customer loyalty programme • Regular production promotions and free product samples • People (i.e. Service) • Professionally trained staff with good product knowledge, selling skills, customer service skills, and general management skills • External monitoring scheme e.g. Mystery shoppers

  25. Evaluation of Business Performance – Marketing Management Marketing strategies • Brand Management • 400 famous brands among which 100 are exclusive brands • In 2008/09, more than 1,600 new exclusive products were added to its portfolio • Having its own brands or exclusive brands can build strong customer loyalty • However, the promotion of these exclusive brands tend to be not enough and mainly focus on a very few selected brands -> affecting the sales of niche brands and new brands

  26. Evaluation of Business Performance – Operation Management • Manpower development • Staff motivation strategies • Bonus system • Let staff understand the corporate goals and the ways they can contribute • Enhance communications with staff and nourish a caring culture of the company • Review remuneration on regular basis • Staff trainings • 150-hour training for new frontline staff • Management Trainee Programme for up-and-coming leaders • Product, language, attitude, selling skills trainings • Leadership Management Skills training for shop supervisors

  27. Evaluation of Business Performance – Operation Management • Inventory Management • Investment in IT infrastructure and logistic systems -> enhance stock taking • Implementation of Just-in-time system to reduce cost • Resources Management • Settlement of purchases is made by HK or US dollars -> minimize price fluctuation due to currencies exchange difference • Keep minimal idle assets through careful asset planning

  28. Evaluation of Business Performance • Key success factors of Sa Sa • Enjoy economy of scale and has strong bargaining power with vendors • Extensive industry experience (over 32 years) • Clear business focus • Having a wide spectrum of products and many of them are exclusive brands • Focus on product development • Developed an on-line shopping platform and extend its market reach (66% increase in turnover when compared with previous year) • Established excellent relationship with vendors • Quality services • Strong distribution network • Dedicated to staff training and development

  29. Sustainable Development Plan Suggestions for product offerings and marketing strategies • Continue to focus on the two existing core businesses – cosmetic retail and brand management • Increase market penetration in these businesses, with focus on Mainland market • Adopt different marketing strategies in different markets • Differentiated marketing strategies with different pricing, promotion strategies to target distinctive market segments (e.g. offer exclusive brands for high to middle-class segments) -> can prolong product life cycle and high profit margin • Undifferentiated marketing strategies in identical markets e.g. in 2nd tier cities e.g. Wuhan, Suzhou

  30. Sustainable Development Plan Suggestions for product offerings and marketing strategies (cont'd) • Develop flagship stores • Further strengthen its on-line business and support with good customer service e.g. delivery and after-sale service • Enhance the corporate image e.g. reinforce its commitment to social responsibilities and environmental protection

  31. Sustainable Development Plan Some suggestions for operation management a) Supply chain management • Exert higher influence in purchase terms with her strong bargaining power • Improve logistics flow through organization reengineering • Quality management • Enhance quality assurance through the development of quality engineering mechanism

  32. Sustainable Development Plan Financial management • Suggested financial strategies should match with its product offering, marketing strategies and operation management • Take into consideration of external factors and challenges e.g. economy, growing competitors • Unless with justifiable reasons, financial strategies should be in line with the past practice of Sa Sa, e.g. • Not to engage in any highly leveraged or speculative derivative products • Conservative approach to financial risk management with no significant borrowing • Implement a general freeze on wages • Review and increase the cost effectiveness of the overhead expenses and their marketing initiatives • Tighten inventory management • Take further measures to manage the rental pressure • Maintain excellent long-term relationship with its suppliers

  33. This powerpoint will be available for download at HKIAAT Website www.hkiaat.org

  34. Q & A Session

More Related