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Alpha Inc.
European E-Commerce Expansion
Anthony Francis
President
Alison Croteau
CFO
Jack Eliasch
CEO
Zeynep Dede
COO
November 18, 2014 Alpha Inc. European E-Commerce Expansion 2
Table of Contents
Executive Summary .............................................................................................................. 3
Value Proposition.................................................................................................................. 4
Target Market ......................................................................................................................... 5
Market segmentation ..................................................................................................................... 5
Product Description ............................................................................................................. 6
Keys To Success ................................................................................................................................ 6
Competition ............................................................................................................................. 7
SWOT Analysis........................................................................................................................ 8
Strengths.............................................................................................................................................. 8
Weaknesses ..................................................................................................................................... 10
Opportunities.................................................................................................................................. 11
Threats .............................................................................................................................................. 12
Supply Chain......................................................................................................................... 14
Financials .............................................................................................................................. 14
Management Team ............................................................................................................ 15
Resumes ............................................................................... Error! Bookmark not defined.
Exhibits .................................................................................................................................. 17
November 18, 2014 Alpha Inc. European E-Commerce Expansion 3
Executive Summary
Alpha Inc. plans to function as an external group working to adapt and operate the
corresponding distribution logistics. This will assist with the expansion of the
online department in the specified parts of Europe. We plan to provide the online
Our Target Market is comprised of the populations in the five European countries
specified that are aged between 18-79 with incomes ranging from 24,000 to 1
million a year and who shop online. Therefore the size of our Target Market is
18.8 Million people. Our reachable Target Market consists of the 7.5 Million
We propose that TJX exploit the Northern European e-commerce market due to
the market potential that these countries possess. First, these countries have the
highest standards of living in the region. Our company will also stay true to the
Alpha Inc. plans to assist in the expansion of the e-Commerce portion of the
company by creating a TJX website that will target a select number of European
countries whilst utilizing the TJX distribution center held in Bergen, Germany. By
November 18, 2014 Alpha Inc. European E-Commerce Expansion 4
having a European base in Germany that has easy access to shipping in Northern
Europe, cost will be kept low for both the TJX Corporation and TJX Customers.
products online. Zalando is particularly similar to TJX in that they are an off-price
retailer.
Value Proposition
TJX is a superior company to its competitors, Zalando and Asos, and if our
However, every second that TJX spends outside of the Northern European
Ecommerce market, they are losing market share and market exposure as well as
potential profits which does not help them reach their ultimate goal. This is why
TJX needs to act quickly. We propose that TJX exploit these markets in the
specified countries due to the market potential that these countries possess. As
shopping in Europe while also maintaining some of the highest standards of living
in the world. As a result we plan to carry out the management of the TJX
Germany.
November 18, 2014 Alpha Inc. European E-Commerce Expansion 5
plan to invest great time in fashion conferences such as Premiere Vision and
conferences will help us to identify current fashion trends. Such conferences will
held in the UK that TJX also uses in the US in order to grow and cultivate both
our own relationships and TJXs relationships with vendors and thus stay true to
Target Market
Market segmentation
Our target market is comprised of the populations in the five European countries
specified that are aged between 18-79 with incomes ranging from 24,000 to 1
million a year and who shop online. Therefore the size of our target market is 18.8
Million people. However, our reachable target market consists of the 7.5 million
people who shop online specifically for apparel. We believe TJX can reach this
could be very profitable for TJX should they decide to enter this market.
November 18, 2014 Alpha Inc. European E-Commerce Expansion 6
Product Description
Alpha Inc. plans to assist in the expansion of the e-Commerce portion of the
company by creating a TJX website that will target a select number of European
countries while also utilizing the TJX distribution center held in Bergen, Germany
that will help reduce the price of shipping to those countries and increase TJX
market share. We want to stay true to the TJX business plan by keeping a lean
European base in Germany that has easy access to shipping in Northern Europe,
costs will be kept low for both the TJX Corporation and TJX Customers.
Currently, TJXs European market share is very limited. There are brick and
mortar stores in the United Kingdom, Germany and Poland, but they have yet to
fully utilized the Ecommerce market there. What Alpha Inc. is hoping to do is
expand TJX sales to Denmark, Finland, Netherlands, Norway, and Sweden via an
out-dated while Internet shopping is rapidly becoming more cost effective and
popular by the day. We want TJX to continue its tradition of being a market
Keys To Success
The key to success for our proposal is based upon the effective adaptation of
distribution and Ecommerce to deal with more goods and more orders. The quick
November 18, 2014 Alpha Inc. European E-Commerce Expansion 7
Competition
Furthermore, TJXs major competition in the Ecommerce space is comprised of
sells off-price clothing and lifestyle products online. The company was founded in
Germany in 2008 and since then it has expanded to a total of fourteen countries.
Norway and the UK. One year after launching in 2009, Zalando began operating
fourteen countries. Last year, the company had a turnover of 1.8 billion Euros.
a British online clothing and beauty store, aimed primarily at young adults. The
company has two distribution centers in the UK and ships to over 237 countries.
The company launched in 2000 and opened their first international office in
Sydney, Australia in 2012. In the final quarter of 2012, ASOS launched three
international stores and international sales increased by 142% during the 2010
financial year. Their total revenue was 753.8 million pounds (2013) while their
The success enjoyed by these off-price online retailers goes to show that there is
not only demand for off-price retail in the Ecommerce realm in Europe but that
there is much room for growth within the European market. With TJXs financial
strength and high credit rating as well as the resurgence of the European
economies, the possibilities for expansion and overall success for TJX in Europe
are high when compared to Zalando and especially high when the predominant
source of their $32 billion revenue is in the US. Should TJX expand to the
European markets aggressively, their goal of being a $40 billion company can
SWOT Analysis
Strengths
Our planned distribution center is one already used by TJX in Germany, which
makes it easy and cheap to transport goods across Northern Europe. Access to the
TJX distribution center that already exists in the country will omit the cost of
spending copious amounts of money on a new center. This will help to maintain
TJXs image of always having the lowest priced products. The workforce in
Germany is also highly skilled, which prompted us to decide to take all necessary
employees from the local workforce there. The literacy rate is 99% and the
German people have extremely high scores on TOEFL English proficiency tests.
This will make communicating with operation managers easier and ease TJXs
November 18, 2014 Alpha Inc. European E-Commerce Expansion 9
introduction into the Northern European market. Labor costs in Germany are
relatively low when compared to other countries in Europe that have a similarly
skilled work force such as Sweden and Poland. Germany is also politically and
economically strong which omits it from most of the austerity troubles other
The TJX Corporation itself would face both difficulties and merits when entering
the European online sales market in the Nordic region. The strengths and
the business, which makes this project much more attractive and beneficial for
TJXs business.
Strengths
In terms of the strengths that the corporation will take on when beginning this
expansion, several come to mind. Using the currently held distribution site in
Germany has multiple benefits: the cost of labor is relatively low in the country
reasonable cost to them. Also, various branches of the TJX Corporation have
already been present in the European market for a few years, so they do have
quite a bit of experience there already. Due to this, they already have connections
November 18, 2014 Alpha Inc. European E-Commerce Expansion 10
with European retailers who could potentially also partner with them in this
Weaknesses
Both Germany and the countries that the online store will ship to have relatively
high VAT rates and tax rates in general. Although VAT would not have to be
applied to the actual goods because most of the items are not made in the
respective countries; therefore an additional cost might have to be added for the
expansion in the online sales department, they are worth examination. The most
important weaknesses that TJX would certainly face during the expansion process
are the initial start-up costs. Like in any business it is inevitably expensive to hire
new workers such as website developers and warehouse workers in order to adapt
to the increased size of the current TK Maxx website and the increased volume of
goods arriving into the distribution center. Unfortunately, these costs can be
Another issue is the high cost of shipping to other countries outside of Germany.
Sweden. These countries all maintain high VAT rates and high rates on Customs
November 18, 2014 Alpha Inc. European E-Commerce Expansion 11
Duties. Our company has attempted to make the cost of delivery of TJX goods
cheaper by shipping from the current distribution center held in Germany, which
would eliminate the cost of leasing a new distribution center and employing more
Opportunities
The current placement of the distribution center in Germany provides many
Luxembourg, Spain and Switzerland; all markets that could make TJX successful.
functioning infrastructure and economic efficiency, there will be less risk of late
goods. Trading will also be easier should TJX choose to expand because most of
the countries in Western Europe are a part of the European Union, which will
Branching into a new market also entails a plethora of new opportunities for TJX.
The corporation will have the opportunity to partner with different retailers to
create a new inventory of items to sell that are catered to the trends and desires of
the respective countries. Also, the Nordic countries that we will be dealing will
are known for having extremely high standards of living and subsequently high
average incomes. In fact, all of the countries that we are targeting are on the list of
the top 15 countries with the highest standard of living with Germany at number
highly: Germany with $24,623, Sweden with $26,242, Norway with $31,459,
Denmark with $24,682, the Netherlands with $25,493, and Finland with $25,739.
This shows that consumers in the northern European market will have more
money to spend and possibly have higher-end taste in items. For example, in
Sweden the average price of jeans sold is 115. This allows TJX to sell more
expensive products and apparel that have higher mark-ups on the website. This
also means that inventory would be turned over less, which would therefore make
the E-commerce site more sustainable and attractive to consumers because they
are then able to find the goods they originally liked consistently.
Threats
November 18, 2014 Alpha Inc. European E-Commerce Expansion 13
only one major force in this area that could potentially rival TJX and that is
Zalando. Zalando is similar in concept in that they offer name-brand products and
European market with stores in other areas of the continent. This matched with
their far greater experience as an off-price retailer in general would allow them to
excel in the market and potentially beat out Zalando and other smaller-scale
competitors. So, the competition serves as both a threat and a major opportunity
endures both successes and difficulties. In terms of this expansion project for
TJX, the merits outweigh many of the challenges, and many of the challenges can
also be diminished.
the European Union are having economic troubles and their governments are
minimal experience in European markets, so there is the same risk with any other
company that things could not go as planned. Similarly, should a recession occur,
website sales would certainly decrease and workers in the distribution center
would be put at risk for being laid-off and having their wages cut. Though an
November 18, 2014 Alpha Inc. European E-Commerce Expansion 14
economic crash is always possible, there is a low risk potential for one at this
moment in time.
Supply Chain
Our supply chain will begin with the shipment of supply by TJX Buyers to Alpha
Inc. Once the products arrive in the distribution center in Germany, they will be
sorted and placed in the in sections. When an order is placed online, Alpha Inc.
will organize for the items to be packaged and sent on a on the soonest possible
working day. For the final phase of the supply chain, DHL will pick up the items
from the distribution center and ship them to the customers in the designated
countries.
Financials
Our financial statement was also partly based on TJXs financial success in the
European market in the past. In terms of how we would like to be paid by TJX,
November 18, 2014 Alpha Inc. European E-Commerce Expansion 15
we will ask to take 5 percent of the profit accumulated from all sales in these
designated countries. This is a more reasonable approach than simply asking for a
flat rate payment each year because the profit from these sales will presumably
grow each year allowing the profit distribution between TJX and Alpha Inc. to be
proportional.
Management Team
Jack Eliasch, CEO- Our chief executive officer, Jack Eliasch, will have the
responsibility of hiring the other members of the management team. The CEO
also sets goals for Alpha Inc. and oversees each project. Mr. Eliasch will be
overseeing the partnership and will help in assisting relations between Alpha Inc.
Zeynep Dede, COO- Our chief operations officer, Zeynep Dede, will be in charge
of the products shipping to and from the distribution center. Mrs. Dede will be
working closely with TJXs buyers and making sure all of the shipments arrive at
and depart the distribution center efficiently. She will also make sure all of the
product orders purchased by online customers are shipped on time and with care.
November 18, 2014 Alpha Inc. European E-Commerce Expansion 16
Alison Croteau, CFO- Our chief financial officer, Alison Croteau, will be in
charge of budget and financing strategies. Mrs. Croteau will manage Alpha Incs
expenses and make sure the correct amount of money will be allocated to each
department ensuring financial prosperity. She will also deal with payments from
Anthony Francis, President- Our President, Anthony Francis, will oversee staff
functions, human resources, finance and strategy. Mr. Francis will be responsible
for implementing Alpha Incs and TJXs partnered vision. He will also be
responsible for making sure everyone in the company knows the TJX vision so
that our partnership will be completely devoted to helping their corporation reach
Exhibits
November 18, 2014 Alpha Inc. European E-Commerce Expansion 18
Supply Chain
Distribution
TJX Buyers Center in DHL Customers
Germany