Strategy Management

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Case study

Portfolio analysis and planning in a retail group

Bear is a large department store in downtown St Gallen which has belonged to the family of the same name for three generations. Offering a full range of goods, it has been able to preserve its domonance in the region. Figure 1 presents the range of goods sold and estimates for current turnover.

|Product goup |Turnover in mil. CHF | |Textiles, clothing and shoes |80 | |Cosmetics and toiletries |10 | |Food |10 | |Household goods |68 | |Sports goods |45 | |Home electronics |20 | |Fashion jewelry and accessories |2 | |Books and magazines |2 | |Flowers |1 | |Miscellaneous |2 | |Total turnover |240 |

The store's competitors are large hypermarkets on the one hand, and small specialized shops on the other. Currently the store enjoys 30% of a total market for the St Gallen urban market area worth an estimated 800 million Swiss francs. Its largest competitor has a market share of 25%. The average real market growth across all product groups is estimated at approximately 3%.

With an eye on the increasing ecological awareness among consumers the woners of the store accepted an offer of franchising rights three years ago from the Body Shop Levy in Zurich for the three contons of St. Gallen, Appenzell and Thurgau. The Body Shop stores sell domestic products based on natural substances which have been developed without experiments on animals. Body Shops have been opened in Rohrschach Wil and St. Gallen, and the turnover figures for the three shops comfirm the Bear Group management's positive assessment of the market. With market growth of 10% for natural cosmetics, the Body Shops last year had turnover figures of 0.8 mill. Swiss francs in Rohrschach, 1.0 mill. Swiss francs in Wil and 1.5 mill. Swiss francs in St. Gallen.

|Strategic business fields |Strategic business units | |Department store |Textiles, clothing and shoes | | |Cosmetics and toiletries | | |Food | | |Household goods | |...
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