Q&A with Noel Manucom, President of HBC, Inc on Business Strategy

Q1: What tools do you use as a guide to help spot opportunities and formulate the right business and marketing strategies?

For Product Planning:

Industry Scanning/Emerging Trends for new product development
BCG Matrix (Revenue/Value/ Volume), Gross Margin, Market Share to assess performance of existing products

For Marketing Plans

  • Industry Analysis (Key Success Factors, Competitive Landscape, Emerging Trends)
  • Brand DNA
  • SWOT Analysis
  • Blue Ocean Matrix

We also use a modified BCG matrix to evaluate store performance.

Q2: HBC was heavy in convenience store products but has gradually reduced this to focus on beauty products using your own store brands. What made you decide to take on this direction?

The marketing group got excited with increasing demand for HBC’s house brands vis-à-vis nationally distributed products. Further analysis boosted the confidence of the team that HBC’s house brands could well be the store’s unique selling proposition. Top management approved the strategic move. From a 10%-90% house brand-other products merchandise mix, the mix eventually became 70-30 in favor of HBC’s house brands, which was referred to as “beauty exclusives.” Accordingly, HBC stores were referred to as the “home of beauty exclusives.”

Q3: HBC purchased SaveMore drugstores in the latter part of 2011. How does this fit HBC’S business strategy and brand essence?

Numerous customer surveys and focus group discussions conducted for HBC indicated the opportunity of increasing HBC’s offering to include drugs and medicine. Customers noted that a pharmacy section would effectively complement HBC’s focus on beauty and wellness (“beauty inside and out”). In addition, customers also voiced out that they would like to enjoy the convenience of a one-stop shop that would cater, again, to their beauty and health needs. Thus, the acquisition of Savemore, which also serves the C and D market, would strengthen the HBC brand and fit well with the company’s vision of being the leading player in health, beauty, personal and home care market.

In terms of economic value, the synergy between HBC and Savemore (now renamed Shopmore due to copyright) will effectively double HBC’s revenues, extend its reach (Shopmore would give HBC 52 more stores), no gestation period (no business disruption, cash flows on day 1) and improve profitability as the current corporate support group (HR, Finance, IT, Supply Chain, Marketing) can effectively serve both HBC and Shopmore operations.

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