joint business plan nestle and tesco in poland - … business plan nestle and tesco in poland janusz...

Joint Business Plan

NESTLE and TESCO in PolandNESTLE and TESCO in Poland

Janusz Selwa TESCO Polska (Poland)

Michal Rubaszko NESTLE Polska (Poland)

TESCO operates currently in

TESCO GloballyTESCO Globally

countries.

TESCO in PolandTESCO in Poland

TESCO is a third player on Polish retail market and first HM chain in

Poland.

HYPERMARKETS DDS 1K + SAVIA

Area

No. of sku

No. of outlets

4 12 k m2 2 - 3 k m2 1 k m2

50.000 12.000 3.500

53 41 232

Current format

structure

NESTLE in PolandNESTLE in Poland

Confectionery

Beverages

Culinary

Infant Nutrition

Lody

Waters

Cereals

FoodServices

Pet Food

What is

Joint Business Planning...?Joint Business Planning...?

5 years ago, Nestl in the UK had a negative growth rate with Tesco, at a time when Tesco was increasing its share of the UK Grocery market. Issues included:

It all started with the UK

What is Joint Business Planning?What is Joint Business Planning?

A fragmented Nestl approach to the Tesco business

No endorsement by Senior Management to the plans

No issue escalation process


Business Unit Sales network

JBP 2 = JBP1 + Key Initiatives +9.8%

JBP 3=JBP2 + focus on key categories +8.9%

INT

ER

VE

NT

ION

JBP4 +6.5%

1998 - Tesco attempted to mirror Wal-Mart Suppliers

Management Model

Request to form Teams

Sales network

Fragmented Approach

Easy to Attack Difficult to do Business

DEATH SPIRAL

Listen, Acknowledge, Explore and Respond

Understood what was Really,Really Important

TOP Management Driven JBP 1 It worked +8.9%

Flexibility on How we Delivered

Shared What was Important to Us

INT

ER

VE

NT

ION

2002/3 2004/5 2005/6 2006/72003/42001/2


Trade Terms Activity Plan

Tra

ditio

nal n

egot

iatio

ns Annual Negotiations

Tra

ditio

nal n

egot

iatio

ns

Jointly Aligned Shopper Based Plan

Negotiate the gaps

JBP incl. TT

JBP

pro

cess

Sharing objectives


Greater listening and understanding on both sides

Increased trust

Fundamental changes made..

Increased trust

Increased transparency and visibility of business

Shared more and aligned plans together

Joint ownership responsibility / mutual goals

Each Category Produces and Agrees a Business Plan

+111%+21%+174%+44%% Growth

74352910.60Tesco Profits (Mio)

+30%+30%+106%+68%% Growth

400310240116.5Sales Turnover (Mio)

2009200820072006

+111%+21%+174%+44%% Growth

74352910.60Tesco Profits (Mio)

+30%+30%+106%+68%% Growth

400310240116.5Sales Turnover (Mio)

2009200820072006

Plan Program Overall KPI Target YTD Achieved What Needs To Be Done By Who

When Does it Need to be Done By Q1 Q2 Q3 Q4 Next Steps

I Can Get What I Want 150m in 3 years 33m category growth (2006 YTD)

Petcare step change 3 year growth plan 2006/9

45% market share within 12wks of launch

WIP First for innovation:- Format plan for ALL NPD, NPD highlighted as a % in JBP, Prioritised NPD based on Size of Prize

2006/7

Drive 1m incremental sales at RSV

Sales Test v Control B:+1.5%P:+1.2%

-Drive On-Shelf Availability through better in-store support, using "Always Available"

2006/7

Provide category expertise to support every range review for every Tesco format

Provide best-in-class category insight for every Tesco format:-Extras-Superstores-Metro-Express-Dot.Com

2006/7

Earn Lifetime Loyalty Jointly agreed 12 month healthier plan worth TBCm RSV

Tesco & Nestle to agree a plan for "Helping you be healthier everyday" with significant focus on selected categories

2006/7

We Try To Get It Right First Time 100% 75% No Invoicing Queries - All invoices processed accurately and paid on time

2006/7

100% WIP New products setup on system within 12wks of launch 2006/7

We Deliver Consistently Every Day Winning the Treble: Promotions, NPI, Petcare growthJointly agree best-in-class processes for the above

2006/7

Focus on Colloborative Planning:1] Reduce Failed To Arrive (FTAs) (less than 1%)2] Seasonality3] Base Sales

2006/7

We Make Our Jobs Easier to Do Roll-out across all Nestle categories

Vendor Managed Inventory (VMI) 2007/8

95% of range in RRP/MUs

c.85% Investigate and implement innovative RRP and MU solutions where it makes people's jobs easier

2006/7

We Always Save Time and Money Phased roll-out across all Nestl categories

Efficient Checking - To enable faster vehicle turnaround at Tesco Depots

2006/7

Better, Simpler, Cheaper

Be Responsible, Fair and Honest

TBC TBC TBC

Be a Good Neighbour

TBC TBC TBC

YTD Range: 92.5% - 97.6%

98.5%Sho

ppin

g Tr

ipTh

e W

ay W

e W

ork

Toge

ther

CU

STO

MER

OPE

RA

TIO

NSC

OM

MU

NITY







2006/7




2006/7



2006/7



2006/7


2006/7



2006/7


2006/7





2006/7



2006/7



TBC TBC TBC

Be a Good Neighbour

TBC TBC TBC

YTD Range: 92.5% - 97.6%

98.5%Sho

ppin

g Tr

ipTh

e W

ay W

e W

ork

Toge

ther

CU

STO

MER

OPE

RA

TIO

NSC

OM

MU

NITY


A simple document sets out the annual business against all parts of the Tesco steering wheel and a set of agreed joint targets

Reviewed every period between Account Manager and Buyer using the Blue, Red Amber Green traffic light process

TARGETS REVIEW BRAGBUSINESS PLAN

95%95%95%91%Service Level

+18.5%+15.1%12.1%9.1%Total Margin

+111%+21%+174%+44%% Growth

95%95%95%91%Service Level

+18.5%+15.1%12.1%9.1%Total Margin

+111%+21%+174%+44%% Growth Be a Good NeighbourGrow Sales

xxxm, +xx.x% Drive categories' sales through good Joint Business Plans

Build a Joint Business Plan for every Format

2006/7

Maximise Profit

xxxm, +xx%xx%, +x.x%pts

Drive categories' profit and margin through good Joint Business Plans

2006/7

An agreed Induction Plan used by both parties

Develop a Joint Induction Plan for all Nestle-Tesco employees (including Helping Hands / TWIST)

TBC

Tesco to share with Nestle all relevant customer plans

Provide visibility of Tesco's priorities through the Customer Plans

2006/7

Rated as Top 3 supplier on use of TescoLink by Tesco

Best-in-Class Application of TescoLink 2006/7

Developing the Best PeopleThe

Way

We

Wor

k To

geth

er

PEO

PLE

FIN

ANC

EC

OM

MU

NITY

Be a Good Neighbour

Grow Sales



2006/7

Maximise Profit



2006/7



TBC



2006/7



Developing the Best PeopleThe

Way

We

Wor

k To

geth

er

PEO

PLE

FIN

ANC

EC

OM

MU

NITY


We share our ambition for categories and brands based on shopper and consumer insight

We build a plan that addresses key consumer/ shopper needs and Tesco/Nestl opportunities

We commercialise the plan to work for Nestl and Tesco using all levers e.g. innovation, distribution, price, promotion, display, front/back distribution, price, promotion, display, front/back marginto sell more product to more shoppers

We set this plan against the Tesco Steering Wheel and the ELH Shopping Trip

We build a month by month execution plan

We review regularly and course correct to get achieve goals


1. Share plans, ambitions & insights

3. Write the Business Plan & Agree Jointly

4. Execute the Plan

0. Identify Point of Departure

Category Plan icl. 3-year

vision (Nestl)

Customer Strategy (Tesco)

Shopper Insight

(Nestl/Tesco)

5. Review & Course Correct

2. Identify the mutual opportunities

DODOPLANPLAN DODOPLANPLAN


REVIEWREVIEWCourse CorrectCourse Correct REVIEWREVIEWCourse CorrectCourse Correct

Ensuring the plan stays on course and adapting to changing circumstances is a fundamental part of the process







2006/7




2006/7



2006/7



2006/7


2006/7



2006/7


2006/7





2006/7



2006/7



TBC TBC TBC

Be a Good Neighbour

TBC TBC TBC

Grow Sales



2006/7

Maximise Profit



2006/7



TBC



2006/7



YTD Range: 92.5% - 97.6%

98.5%

Developing the Best People

Shop

ping

Tri

pTh

e W

ay W

e W

ork

Toge

ther

CUST

OM

ERO

PER

ATI

ON

SPE

OPL

EFI

NAN

CE

CO

MM

UNI

TY







2006/7




2006/7



2006/7



2006/7


2006/7



2006/7


2006/7





2006/7



2006/7



TBC TBC TBC

Be a Good Neighbour

TBC TBC TBC

Grow Sales



2006/7

Maximise Profit



2006/7



TBC



2006/7



YTD Range: 92.5% - 97.6%

98.5%

Developing the Best People

Shop

ping

Tri

pTh

e W

ay W

e W

ork

Toge

ther

CUST

OM

ERO

PER

ATI

ON

SPE

OPL

EFI

NAN

CE

CO

MM

UNI

TY

Steps we took in Poland...Steps we took in Poland...

SALESSALES LOGISTICSLOGISTICS

Preparations on NESTLE sidePreparations on NESTLE side

MARKETINGMARKETING FINANCEFINANCE

Opening for each otherOpening for each other

Top to Top meeting Business Leders Meeting

Meeting held In October 2007

- to share business vision;- to discuss strategies;- to improve relations.

TESCO Conference in November 2007

- to show our strategy to TESCO employees (around 200 managers);

Wisa March 2008 Joint Business Plan WorkshopWisa March 2008 Joint Business Plan Workshop

Both sides were entirely commited to deliver the Joint Business Plan.

Meeting participants from:

- Marketing- Sales- CCSD- Logistics

Action Plan set for the rest of 2008Action Plan set for the rest of 2008

04 05 06 07 08 09 10 11 12

CAT-MAN

Range Review

WellnessZupy jak u mamy

Buliony z noem

CROSS - MERCH

Majonez + gratis

nowe Pomysy

na...

nowy majonez

Zupy Standard

Akcja wita

Pomys na...

Range Review

CAT-MAN

Wellness

WellnessPrincessaakcja dla TESCO

CROSS - MERCH

CROSS - MERCH

Urodziny TESCO

Festiwal Kawy

Espiro(tailor)

NESCAFECollection

Kubek w 1K

3w1(20+4)

Princessa, KitKat, AERO

Princessaon-pack

Festiwal Sodyczy

Akcja wita

Akcja wita

Joint Business Plan and ScorecardJoint Business Plan and Scorecard

All the prepared plans were wrote down and put into a scorecard. Next step is to track if they are properly

executed.

Execution of Joint Business Plan has to bring

measurable benefits in area of sales and profits.

Parameters controlled:

Central Level Local Level

shelf fill rate

sales factor

promotional order

shelf capacity

stock in outlets

promo order proposal

Joint Logistics InnitiativeJoint Logistics Innitiative

promotional order promo order proposal

OOS in TESCO (NESTLE products)

0,00%

1,00%

2,00%

3,00%

4,00%

5,00%

6,00%

OOS 5,60% 5,40% 5,70% 5,17% 5,10% 4,27% 3,95% 5,09% 5,41% 4,55% 4,93% 3,19% 3,60% 3,90% 4,20%

7 8 9 10 11 12 13 14 15 16 17 19 20 21 22

OOS reduction

by 43%

Develop People in JBP wayDevelop People in JBP way

Tesco Tesco Nestle Purina workshop held in St.Louis helped to support Nestle Purina workshop held in St.Louis helped to support

plan for category development via stakeholders of both partnersplan for category development via stakeholders of both partners

WE MANAGED TO INVOLVE ALSO HUNGARIAN TEAM

AFTER VISIT IN LEARNING CENTRE WE GOT STRONG PLAN FOR FURTHER GROWTH:AFTER VISIT IN LEARNING CENTRE WE GOT STRONG PLAN FOR FURTHER GROWTH:

-- all stakeholders from Tesco and Purina are involvedall stakeholders from Tesco and Purina are involved

-- we got strong commitment from Tesco to take part in 1bln Euro market opportunity in Poland we got strong commitment from Tesco to take part in 1bln Euro market opportunity in Poland to be to be presented at Tesco board presented at Tesco board

-- agreed shelf remerchandising from horizontal to vertical blocking agreed shelf remerchandising from horizontal to vertical blocking

-- agreed repositioning of snacks in category agreed repositioning of snacks in category exploring potential of impuls segment exploring potential of impuls segment

-- branded gondolabranded gondola--end test in 3end test in 3--4 locations (Q4.2008)4 locations (Q4.2008)

-- special pet event with local media engagement special pet event with local media engagement 3 top locations (10.08)3 top locations (10.08)

-- cooperation on Tesco web sitecooperation on Tesco web site

-- detailed challenging plan covers 32 points in total..... detailed challenging plan covers 32 points in total.....

Joint Category ManagementJoint Category Management

CategoriesInstant Coffee

Countlines Culinary

Date of change

Coffee

02.2008 05.2008 06.2008

Implementation

Donuts PromoDonuts Promo

Total number of stands - 95112 stands in each HM5 stands in each DDS

Krakw Kapelanka Tomek Tokarski

Gdynia Rafa RadomskiGdynia Rafa RadomskiPozna Opieskiego Maciek Jezierski

5 stands in each DDS1 stand in each 1K

No. of outlets: 296

Donuts PromoDonuts Promo

Donuts in TESCO

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Donuts 2007 900 1026 1000 1200 1300 1026

Donuts 2008 1000 1176 1200 1900 1700 1176

W1 W2 W3 W4 W5 W6

Increase +41%395.000 pc.

Sprzeda NCL 200g w sztukach w Hipermarketach

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

NCL - 2007 6275 7564 7383 6943 13596 11115

NCL - 2008 10829 10910 8104 13445 16464 14259

W1 W2 W3 W4 W5 W6

Sprzeda N.Gold 200g w sztukach w Hipermarketach

0

500

1000

1500

2000

2500

3000

3500

4000

NESCAFE Gold - 2007 1026 1222 1132 1081 1494 1723

NESCAFE Gold - 2008 1176 1078 1151 2381 2793 3709

W1 W2 W3 W4 W5 W6

Increase 40%12.500 pc.

Increase 106%4.580 pc.

Sales results for 2008Sales results for 2008

20 000 PLN

25 000 PLN

30 000 PLN

35 000 PLN

I - VIII 2008 I - VIII 2007

+ 29%+ 29%+31%+31%+23%+23% +21%+21% +43%+43%

+40%+40%

0 PLN

5 000 PLN

10 000 PLN

15 000 PLN

20 000 PLN

Culin

ary

Beve

rage

s

Cere

als

Infa

nt n

utrit

ion

Wat

er

Conf

ectio

nery

PetC

are

Ice

Crea

mDa

iry

+40%+40%

+27%+27%

+31%+31% --2%2% +4%+4%

7 principles that support JBP7 principles that support JBP

1

2

3

We set SMART goals

Clear on the what (i.e KPIs) BUT FLEXIBLE on the How

Senior Management endorsement and visible support

The consumer / Shopper is King

4

5

6

7

Senior Management endorsement and visible support

A process, not an event PLAN, DO, REVIEW

Focus on the 90% we agree and work through the 10% we dont

Whats right mindset v. Whos right

Efficient Distribution and Transportation

joint business plan nestle and tesco in poland - … business plan nestle and tesco in poland janusz...

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