Strategic tools for the practising manager

KIT

THIS WEEK: The leisure segment (entertainment, gaming, eating out and travel)

Shopping can no longer be seen as just a need-based activity. With malls offering multiplexes, restaurants, video-parlours and other avenues of entertainment in both large and smaller cities, shopping has evolved as a leisure pastime.

The leisure segment in India is emerging as a high-growth category thanks to a large and growing youth population, more emphasis on outdoor activity, exposure to international lifestyles and media, growing Internet and broadband penetration, and the availability of easy credit.

The young consumer is spending more and more on activities such as clubbing, gaming and vacationing abroad.

Some 5.8 million Indians have travelled abroad and were found to be the busiest shoppers in Singapore, Malaysia, Thailand and the UK.

In-home and outdoor entertainment accounts for 8-9 per cent of the total household expenditure.

Within this category, the spend on eating out is the highest, followed by theatre and outdoor entertainment such as gaming, vacationing and amusement parks.

NUGGETS
Selections from management journals

The procurement process has long been characterised by mistrust among manufacturers and suppliers. A more effective model, pioneered by Toyota and Honda, fosters candour, knowledge sharing, and undeniable profitability.

Their methods of procurement based on shared information and insight could be called knowledge-based sourcing. With this approach, manufacturers and suppliers share a long-term commitment to improving each other's capabilities, starting by working together to eliminate wasted effort and inefficiencies.

Win-win sourcing
By Bill Jackson and Michael Pfitzmann
strategy+business,
Summer 2007
Read this article at www.strategy-business.com

Some shoppers just
can't help themselves and buy mostly on impulse without regard to price. Others are die-hard bargain hunters. Then there are the strategic consumers, who are willing to buy full-price sometimes, but at other times will wait for a bargain. It's these customers that retailers need to focus on in order to reap the full benefits of lean retail inventory management and variable pricing.

In a paper, Gerard P Cachon, professor of operations and information management at Wharton, and doctoral student Robert Swinney show how lean inventory systems are far more effective than initially thought in helping retailers determine the ideal size of their orders and the best markdown strategies when taking strategic buyers into account.

Here today, discounted tomorrow: strategic shoppers know when to buy, and at what price
Knowledge@Wharton, May 30-June 12, 2007
Read the article at http://knowledge.wharton.upenn.edu

Consumer goods marketers are struggling to keep up with unprecedented levels of change "" from an explosion in the number of media choices to the growth in size and importance of major discount retailers.

Some leaders appear to be coping with today's challenging environment by experimenting with new media, novel approaches to gathering insights about consumers, and more collaborative relationships with retailers, among other things.

How consumer goods companies are coping with complexity
The McKinsey Quarterly,
Web exclusive, May 2007
Read the article at www.mckinseyquarterly.com