Matahari Department Store Corporate Social Responsibility A Strategic Perspective Presentation by Travis Saucer C E O Matahari Department Store Lippo Group
PT Matahari Putra Prima Tbk. Indonesia’s Leading Retail Group A Strategic Perspective
2007 Exceeding 1 Billion Sales in US Dollars Matahari Food Business (MFB) MDS Department Store division TimeZone & Others division 2007F Sales: Rp5.0 trillion 2007F Sales: Rp318 billion 2007F Sales: Rp4.5 trillion Department Store Hypermarket Arcade centre ♦ 90 outlets ♦ 80 outlets ♦ 38 outlets ♦ 45 cities ♦ 38 cities ♦ 20 cities Foodmart Other operations directly held under Matahari ♦ 29 supermarket outlets Distribution ♦ 25 cities ♦ In-house support Boston Pharmacy ♦ 3 centres ♦ 42 Health & Beauty Centers (HBC) Property ♦ Property management ♦ Retail leasing Note: No of outlets as of February 26, 2008 A Strategic Perspective
Indonesia’s Largest Department Store A Strategic Perspective
Matahari Department Store Group � Target middle and upper middle income consumers: Particularly targets females/families between ages 15 to 45. � Store size typically ranges from 4,000 – 15,000 sqm – Modern, well-lit and well fixtured. � MDS competes on Fashion, Value and Quality. A Strategic Perspective
2007 Matahari Department Store’s Most Successful Year in Its 50 Year History � Highest ever same store sales growth performance in 2007 at 13.7% � 2007 EBIT Margin of 10.4% - highest ever, best of class worldwide � Develop long-term, strategic plan of multi-segment business to double sales within 5 years � Sales hit Rp 5 Trillion A Strategic Perspective
Matahari Department Store is the crown jewel for PT. Matahari Putra Prima Tbk!!! Beginning in 2008 we will further dominate Indonesia with a major expansion of Matahari Department Stores!!! A Strategic Perspective
INDONESIAN ECONOMY SHOWS PROMISING GROWTH ... resulting in increase Real GDP forecast to ... while population is of GDP/capita of 25% grow by 6% p.a. .. growing at 1% per year ... by 2012 Real GDP, Population, Real GDP/capita, 2007-12 (Rp T) 2007-12 (M) 2007-12 (Rp M) 6,000 300 25 • +6 % • +31 % +25 % 248 4,944 20 235 5,000 250 20 16 3,775 200 4,000 15 3,000 150 10 100 2,000 5 50 1,000 0 0 0 2007 2012 2007 2012 2007 2012 Average income per capita projected to grow by 25% through 2012 Note: All figures in constant 2007 Rp Source: EIU; BCG analysis A Strategic Perspective
DEVELOPMENT OF MODERN RETAIL EXPECTED TO ACCELERATE Share of modern retail to increase to 30% by 2012 Modern retail as % of total retail sales, 2004 % 90 Singapore South Korea Projected Hong Kong increase to 30% Thailand Taiwan Japan 60 of total retail Malaysia sales in 2012 30 Indonesia 2012 China Vietnam India 1 Indonesia 0 100 1000 10000 100000 GDP per capita in US$ (2004) (1) Figure for 2007 Source: IBM consulting; Press search; BCG analysis A Strategic Perspective
Matahari Department Store The Crown Jewel Our number 1 strategy: Grow Matahari Department Store Faster!!! A Strategic Perspective
EXPAND MATAHARI STORE BASE MORE AGGRESSIVELY ... Planned number of Matahari stores, 2007-2012 125 +58% 115 105 95 85 79 Open 10 new stores a year starting 2008 2007 2008 2009 2010 2011 2012 1 1. Figure end 2007 (excludes 2 Matahari stores that are converted to Parisian) Source: Matahari Real Estate and Store Planning A Strategic Perspective
... AND EXPAND GEOGRAPHICAL FOOTPRINT THROUGHOUT INDONESIA Existing stores New stores in current cities New stores in new cities Source: Matahari Real Estate and Store Planning Potential future locations A Strategic Perspective
Matahari Department Stores Corporate Social Responsibility • Our success comes with a responsibility to be a role model in giving back to the employees and the communities that support us A Strategic Perspective
What Is Corporate Social Responsibility ? Achieving commercial success in ways that honor ethical values, respect people, communities and the natural environment A Strategic Perspective
Corporate Social Responsibility Divided into Four Areas: Work Place – How do we treat the people who work for us? Market Place – Good Governance practices Code of ethics Globally accepted accounting practices Community – Seeing ourselves as a member of the community rather than an outsider Environment – Reduce the resources we use and waste we produce A Strategic Perspective
Benefits A. Good reputation – attract the best people B. Brand enhancement C. Income appeal to investors and financial analysts D. Increase sales and market share A Strategic Perspective
Cost of Ignoring CSR A. Risk of new business B. Brand risk C. Legal risk A Strategic Perspective
Challenges A. Choosing social issues B. Selecting on initiative to address the issue C. Developing and implementing program plans D. Evaluation A Strategic Perspective
Corporate Social Responsibility Matahari 2006/2007 A Strategic Perspective
Matahari: Aid and Support on 2006 / 2007 Natural Disasters 1. Earthquake victims 2. Tsunami victims 3. Flood victims A Strategic Perspective
June 2006, EARTHQUAKE Matahari disbursed aid to help the earthquake victims with food, blankets, medicine for more than 10,000 households. A Strategic Perspective
February 2007, TSUNAMI Together with Yayasan Obor Berkat Indonesia, Matahari helped the victims of the tsunami A Strategic Perspective
February 2007, FLOOD Together with Yayasan Obor Berkat Indonesia, Matahari helped the flood victims in Jakarta and greater Jakarta region A Strategic Perspective
Matahari: Aid and Support on 2006 / 2007 Arts, Humanities and Education for the Nation’s Future 1. Arts programs 2. Sport events 3. Scholarships to employees and the less fortunate 4. Teachers in isolated areas 5. Loaning of associates to universities A Strategic Perspective
August 2007, TEACHERS SUPPORT In cooperation with Foreign Affairs Department, Matahari donated special packages for teachers in isolated areas throughout Indonesia A Strategic Perspective
Matahari: Aid and Support on 2006 / 2007 Less Fortunate Members of the Community 1. Special Olympics 2. Orphanages 3. Blind and handicapped individuals A Strategic Perspective
2006 IKM donation to Orphanage A Strategic Perspective
August, 2006 Matahari donated Rp 100 million to Yayasan Putra Bahagia to help the unfortunate children A Strategic Perspective
2006 Donation to Orphanage A Strategic Perspective
Employee Welfare 1. Scholarship to employee 2. Vocational study 3. Spiritual responsibility; establishment praying place i.e mosque 4. Condolences contribution 5. “Koperasi Karyawan” - benefit of local loans to employee - special allocation of emergency of employee 6. Employee’s union – annual conference meeting A Strategic Perspective
Employee voluntary blood donor for Indonesia Red Cross A Strategic Perspective
Employee spiritual responsibility A Strategic Perspective
Matahari Soccer Team A Strategic Perspective
Worked with Others to Achieve More 1. Employees union 2. Customer donations 3. Matahari Suppliers Club 4. Indonesia Retail Association 5. Special Olympics 6. Louis Braille Institution 7. Organized Bazaars for funds 8. Ministry of Foreign Affairs to provide aid 9. UNICEF A Strategic Perspective
September 2006 Through a trade-in program, Matahari collected more than 10,000 pairs of jeans which were donated to social institutions in areas surrounding Matahari stores. A Strategic Perspective
November 2006 Rp 4 billion was donated by Matahari in cooperation with Matahari Suppliers Club (AMSC) to 33 social foundations, as part of the “Matahari Charity Day”. A Strategic Perspective
October 2007 Matahari in-cooperation with Dompet Dhuafa gathered funds to help those in needs. A Strategic Perspective
New Initiatives for 2008 Cause Marketing – Donate a portion of the profits of each bra we sell to the Breast Cancer Council Trade Ins – Encourage our customers to donate uniforms/bags/shoes which will be donated to local orphanages in return for discounts on new merchandise Matching Donations – donations by our customers will be matched by MDS and our suppliers A Strategic Perspective
CSR is beyond the old philanthropy of the past “Donate to good causes at the end of the year” CSR is a year round responsibility that we accept for the environment around us CSR is the difference we make to the world and the contributions to poverty reduction A Strategic Perspective
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