Stern Stewart Case: Sports Growth

The candidate could proceed according to the following solution scheme:

The candidate should first consider what opportunities exist generally to increase sales and apply these to the case in a structured way. A good candidate will first explain their general framework and then apply it specifically to the solution of the case.

The candidate could choose the following structure for this:

It makes sense to separate the factors into qualitative and quantitative factors and also to distinguish between the dimensions internal and external. A 2x2 matrix is suitable for this purpose.

On request, you can provide the company's total sales (€ 21 billion) and sales for France (€ 6.5 billion).

The candidate should take the market size as the main decision criterion when choosing a country, as the purchasing power does not differ greatly even in the strongest countries.

The estimate is based on the market size and the market share of Tiger SE within each country.

• The average expenditure in the sporting goods segment differs only slightly in the strongest countries and therefore, does not serve as a sufficient indicator for the evaluation of a specific country.
• Regarding the number of inhabitants, Germany and France differentiate themselves above all.

Thus, the first rough estimate concerns Germany and France. A good candidate argues at this point that a growth rate would have to be assumed for the estimation of the future market size.

First, the candidate should describe the table and compare the actual values with the targets. In addition, the candidate is asked to name some concrete measures per key figure with which the targets can be achieved.

Examples of useful measures would be:

• Increase of the conversion rate through active marketing of the online shop
• Optimization of the consumer experience of online shopping to increase the number of orders/year
• Discount codes for the online shops to increase conversion rate

A good candidate already notes here that the measures are associated with costs and thus the margin of the company decreases. However, since the primary goal of the company is sales growth, the critical note of the cost side is sufficient.

Following the calculation, a good candidate should want to rank the results.

In relation to total sales, a growth rate of 0.08% can be achieved and in terms of sales generated in France, a realistic growth rate of 2.6% can be achieved.

After the expansion of eCommerce on the French market has been evaluated as attractive, the candidate should now work out which areas of the company have to be adapted due to the new strategy. The following areas should be mentioned and their contribution to the success of the implementation explained:

• Marketing/Sales: Focus of advertising campaigns on eCommerce business
• IT: Expansion of the online shop (security, stability, functions) and data collection
• Logistics: Adjust capacity of logistics centers to increased demand (alternative: outsourcing)
• Operations: Expansion of production volume to meet increased demand

A very good candidate will also bring one of the following areas to the table:

• Product management: Analysis of the collected customer data and development of specialized offers
• Controlling: Risks of non-payment (e.g. payment on Invoice) taken into account
• Management: Closure of shops due to decline in demand in traditional shops

The applicant should be aware of the risks, such as the congestion of production sites.

After the implementation plan could be outlined, it comes to the final recommendation of solving the case study. For this, the candidate should convince the CEO, whom he meets in the elevator, of his results in three sentences.

Above all, make sure that the applicant presents their results in short, concise sentences. The applicant should first recommend expanding the eCommerce business in France, as this is where the greatest additional earnings potential is available at around 168 million euros. He should then back up his statement with further arguments. The relatively low conversion rate in 2018 and the market size can be cited here. Finally, he should point out that a rough implementation plan has already been drawn up with the departments concerned.