1. BA 495: Business Strategy - Spring Term 2017
“Team Brooke”
Drew Bugni, Tatyana Collier, Katlin Combest,
Ryan Ordonez, Brooke Rawson & Yavuz Sefunc
Arte Soleil Final Recommendations
2. Overview and Purpose of Final Recommendations
Primary goal is to support and show how we formulated our final
recommendations. To do so we will share with you:
• Statement of Work Summary
• External Analysis
• Internal Analysis
• Review of Complete SWOT
• What You Need to Worry About
• Final Recommendations
3. Statement of Work Summary
“The
project
team
will
focus
on
how
art
retail
and
coffee
service
will
complement
one
another
and
provide
Arte
Soleil
the
sustaining
competitive
advantage
they
need
for
success.”
Client
Goals:
• Provide
cost
effective
solutions and
opportunities
to
the
East
Portland
community.
• Develop
a
comprehensive
understanding
of
target
market and
generate
an
active
customer
base
while
continually
bringing
in
new
customers.
Project
Team
Goals:
• Assist
Arte
Soleil
in
refining
their
industry
focus and
develop
a
self
sustaining
art
retail
business
that
can
be
complemented
by
a
coffee
service inside
the
location
and
strengthened
through
a
partnership
with
a
local
coffee
roaster.
• Curate
a
clearly
defined
strategy
for
Arte
Soleil
to
market their
business
effectively
using
consistent
messaging
and
nomenclature.
• Analyze
Arte
Soleil’s
financials and
provide
guidance that
will
allow
the
business
and
business
owners
to
be
financially
independent.
4. External Analysis
Arte Soleil's discoveries about their external working environment:
• Overview of the industry
• Economic and Sociocultural influences
• Forces within the market that help to identify the nature of the
industry competition
• Refined Weighted Competition Matrix
• Threats and Opportunities
5. • Industry on the decline overall (e-commerce threat)
• Small retailer store opportunities
• Owner-operators account for 83.3% of industry
Industry Overview
Small Specialty Retail Stores in the US: 45399
6. Economic Influences
City of Portland Neighborhood Economic Development Strategy
• Residual economic benefits from the neighborhood improving
• Leach botanical gardens is getting significant development
• Nixie Stark from PDC is willing to provide help with
developing a business plan
8. Forces That Impact Your Industry
Threat of
New
Entrants
Power of
Suppliers
Threat of
Substitute
Products
Competition Low
Competing for
retail stores
High
Variety of
spaces in
Portland for
artists to sell
their products
Workshops
Art retail
9. Forces That Impact Your Industry
Bargaining Power of
Buyers
Competitive Rivalry
Low contributing factors
• Number of buyers
and businesses
• Unstandardized
products
High contributing factors
• Low switching
costs
• Backward
integration
• Per capita
disposable income
Coffee Shops
Art galleries
Art classes
Local Restaurants
10. Forces That Impact Your Industry
+ Complements
• Food trucks provide foot traffic
for local companies
• Art workshops and classes
enhance Brand Recognition
and Awareness
• Local art vendors support the
“buy local” movement for
business
• Coffee service allows for longer
customer presence
• Open mic / Live music / Music
recording all support the
business financially and bring
in customers from outside the
local area
11. Refined Weighted Competition Matrix
Ratings
5 = Excellent
4 = Above
average
3 = Average
2 = Below average
1 = Poor
0 = None
Sources:
“Crafty Wonderland.” Crafty Wonderland. N.p., n.d. Web. 1 May 2017.
“Twisted : Yarn, Crafts, Classes, Tea.” N.p., n.d. Web. 1 May 2017.
“Singer Hill Cafe » Art Gallery.” N.p., n.d. Web. 1 May 2017.
“Give and Take Resale | Reuse, Resell, Refresh!!” N.p., n.d. Web. 1 May 2017.
Empire, Tender Loving. “Handmade Products - Record Label.” Tender Loving Empire. N.p., n.d. Web. 1 May 2017.
12. Opportunities and Threats
Threats
• E-commerce sales increasing
• Rising cost of rent for artists and
real estate for consumers
• Low switching costs for buyers
• Local industry competition is high
Opportunities
• Improve the socioeconomic status
and quality of neighborhood
• Leverage technology to reach
consumers
• Rising cost of rent for artists
• Increase diversity
14. VIRO Framework
• According to the VIRO
framework, a firm can
gain and sustain a
competitive advantage
only when it has
resources that are
• Valuable, costly to
imitate, rare, AND
the firm must be
organized to capture
the resource
15. VIRO Framework
• Arte Soleil is on the verge of turning many resources and
capabilities into a core competencies.
• Location
• Coffee
• Knowledge of art community
• Connections to artists
16. Strengths and Weaknesses
Strengths
● Low overhead
● Location
● Potential for extraordinary coffee
service
● 6 artists ready to consign
● Knowledge
Weaknesses
● Complement products to attract
consumers
● Marketing
● Sourcing artists and creators
● Building permits
● Few technical strengths
17. SWOT Overview
Opportunities
● Improve neighborhood
● Leverage technology
● Rising rent
● Increase diversity
Threats
● E-commerce increasing
● Rising rent
● Low switching costs
● Local competition
Strengths
● Low overhead
● Location
● Potential for complementary
coffee cart service
● 6 artists ready to consign
● Knowledge
A
Fund technology, online marketing
and advertising efforts with capital that
is not slated for overhead costs. Use
these efforts to promote the location of
the business and share your
community commitment.
B
Use knowledge to counter local
competition by developing close
relationships with the artists ready to
consign, their networks and your own.
Emphasize Arte Soleil as a cost
effective solution for artists in the
Portland area.
Weaknesses
● Complement products to attract
consumers
● Marketing
● Sourcing artists and creators
● Building permits
● Few technical strengths
C
Pivot idea generation energy towards
retail and coffee cart service
combination to remove the focus of
needing to update the building and
begin serving the community.
D
Focus on promoting the business to
the right audiences to achieve continual
artist sourcing and take consumer
attention away from e-commerce
options.
19. • Consignment Strategy with signed contracts
• Arte Soleil Consignment Contract
Recommendations
Arte Soleil’s Commission
Under 30 days 31-59 days 60-75 days More than 75 days
45% 50% 65% 80%
• Technology and Point of Sale data collection software
• iPad + Square ($498)
Sources: “Square Stand for Contactless and Chip | Square Shop.” N.p., n.d. Web. 2 June 2017.
20. • Invest in marketing and social media
• Wix.com template + eCommerce plan ($204) - http://ryanordonez.wixsite.com/artesoleil
• Pinterest, Instagram, Google+
• Trimet Advertising ($160)
• Promote coffee business
• Page on website / Punch Card / Signage
• Establish open hours of operation
• After renovations complete: Friday - Sunday, 2:00pm to 8:00pm
Recommendations
21. What Do You Need To Worry About?
• Setting
a
profitable
consignment
/
lease
structure
and
collecting
data
on
vendor
sales.
• Continuing
your
cost
strategy
through
the
developmental
stage
of
your
business.
• Marketing
campaign
for
customer
loyalty
and
brand
recognition.
• Utilizing
vendors
to
work
in
store
to
add
to
open
hours
of
operation.
22. • Cost Leadership
• Suggested Consignment Model
• 45% if sold within 30 days
• 50% if sold between 31-59 days
• 65% if sold between 60-75 days
• 80% if sold in more than 75 days
• (Arte Soleil can require artist to retrieve any unsold artwork after 30 days)
• 100% of discount will come out of artist's portion of the sale
• Arte Soleil retains normal commission on all sales
Business Strategy
23. Before Opening
• Focus heavily on advertising and marketing to create
awareness
• Purchase all coffee cart equipment
• Take training on being a barista
• Purchase software for retail sales and learn software
thoroughly
• Have contracts signed by retailers and art ready to sell
24. After Opening
• Continue advertising and marketing efforts
• Adjust and re-write contracts with retailers as necessary
• Determine which artists are selling and which aren’t
• Open part-time
25. Summary of Work and Conclusion
External
Analysis
of
Opportunities
and
Threat
-‐ April
24,
2017
To
better
understand
how
to
position
Arte
Soleil
in
the
marketplace,
the
project
team
will
complete
a
comprehensive
analysis
of
the
small
specialty
retail
stores
industry.
This
analysis
will
include
research
via
secondary
sources
that
will
facilitate
the
identification
of
opportunities
and
threats
currently
facing
businesses
operating
within
the
industry.
Internal
Analysis
of
Strengths
and
Weaknesses
-‐ May
1,
2017
To
better
understand
how
Arte
Soleil
is
currently
positioned
in
the
local
Portland
marketplace
and
small
specialty
retail
stores
industry,
the
project
team
will
complete
a
comprehensive
analysis
via
primary
and
secondary
sources
to
identify
the
businesses’
strengths
and
weaknesses.
Financial
Analysis
-‐ May
15,
2017
Understanding
Arte
Soleil’s
current
financials
will
be
a
vital
in
delivering
rational
and
meaningful
recommendations.
This
analysis
will
provide
foundational
information
to
the
project
team
concerning
Arte
Soleil’s
financial
limitations
and
opportunities.
Final
Recommendations
-‐ June
2,
2017
Fortified
by
the
research
conducted
in
the
external,
internal
and
financial
analyses,
the
project
team
will
provide
Arte
Soleil
with
final
recommendations
to
implement
specific
strategies
on
how
to
gain
and
sustain
a
competitive
advantage
in
the
small
specialty
retail
store
industry.
Thank
you
for
your
sincerity
and
participation!
