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Case Analysis 2010
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Supply chain management
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Case report on [Link]
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Submitted To
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Yamini Madam
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Submitted by
Abhishek Sharma
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Debabrata Banerjee
Prathvi Nayak
Vipin Yadav
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Case Analysis 2010
Introduction
In this case there are two companies FNAC (Federation Nationale d’Achat des
Cadres) and PPR (Pinault-Printemps-Redoute). FNAC provides both types of
products cultural and technical to its customer like music, book, ticketing office,
computers and accessories, entertainment and sound. And it has good image
among customers. To earn more profit, FNAC launched e-commerce activities and
its website [Link] in 1999.
PPR acquired FNAC in 1994. PPR was the distributer of timber and was
expanding its business that it why PPR acquired Gucci group, YSL beauty,
Boucheron & Bedat etc. [Link] was giving good profit to PPR.
Analysis of the case
If we see Figure 3, we can see that FNAC is largely indulge in selling music 28%
of its selling product covered by music followed by PC software 26% and other
products come after it. According to figure 4, FNAC’s sales and EBIT is maximum
in 2002, 3547 million and 131 million respectively. New stores could be the reason
behind it but if we see the EBIT growth it is increasing by only 1.9% earlier it was
increasing rapidly like in 1997 it was 31.3 and in 1998 it was 25.9 so there is a big
difference in growth rate. And if see sales growth it decreasing by -8.8% these are
not good indication for company.
If we analyze figure 14, we can see that [Link] was facing aggressive
competition in 2004 in every product category. Like Alapage and Amazon were
competitors in online market. Cdiscount, Surcouf and Rueducommerce were
competitors in niche specialist and Pixmania and Nomatica were in online
discount.
Figure 13 shows that [Link] is biggest competitor of the company because this
figure is showing that [Link] has maximum number of online audience. And
[Link]’s line is below than [Link]. Amazon was doing well in European
countries mainly in UK and Germany. But it could not get success in France and
going to restructure its operations in France.
1
Abhishek, Debabrata, Prathvi, Vipin MBA 14C
Case Analysis 2010
FNAC has its warehouse in Massy and flagship stores in Paris. It could be
disadvantage for it. Because when there will be shortage of product it will take so
much time to bring product from these countries.
Problem in the case
The company counters stiff competition from various other companies like
[Link], Apple, Sony, French hyper market etc.
There were many cultural barriers like lack of uses of credit card for
payment which create lot of contradictions with western culture.
Cash payment does not take place through the telephone.
SKU was a sole responsible to distribute across the warehouses. It actually
increases their delivery time and also the cost.
Online shopping market is very critical as it often deviate the price in
between general outlets and online.
Downloads of various popular commercial music was restricted.
Recommendation and conclusion
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Abhishek, Debabrata, Prathvi, Vipin MBA 14C
