The North Face China Expansion Strategy
Kai Tang
Key Objectives
Understand Productivity Drivers: Identify factors influencing TNF store performance.
Develop a National Database: Create a scorecard to evaluate and rank store locations.
Formulate Growth Strategies: Provide actionable tactics for immediate impact and long-term growth.
Methodology
The study used a top-down and bottom-up approach:
Top-Down: Analyzed outdoor market capacity, economic factors, and retail development at the city level.
Bottom-Up: Conducted surveys of ~250 stores across key cities, evaluating factors like outdoor strength, building quality, door location, facade, and interior.
Scorecard Model: A multi-variable regression model was developed to predict store productivity, validated by traffic conversion data.
Key Findings
Productivity Drivers:
External Factors (62% influence): Outdoor strength, building quality, and location.
Internal Factors (38% influence): Store layout, visual merchandising, and staff service.
Market Concentration:
High-tier cities (Tier 1-2) accounted for 62% of TNF's sales, with strong seasonality.
Regional differences in performance were observed, with TNF stronger in East and Northeast China.
Store Performance:
Low-performing stores were identified, with recommendations to close, relocate, or renovate.
New store opportunities were quantified, with 71 potential doors in high-tier cities and 57 in low-tier cities.
Recommendations
Existing Stores:
Close underperforming stores.
Renovate or relocate stores in good locations but poor buildings.
New Stores:
Use the scorecard to identify high-potential locations.
Focus on high-tier cities with strong outdoor markets.
Process Improvements:
Implement a scientific planning and tracking process for store openings.
Develop tools for better dealer inventory management and productivity monitoring.
Impact
Improved Productivity: Higher-performing stores with better profitability.
Strategic Expansion: Targeted new store openings in high-potential locations.
Data-Driven Decisions: Enhanced tools and processes for ongoing distribution management.
My Role (Full-Time Employee)
Project Lead
Project Design & Execution
Communication and Socialization
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Posted Jan 31, 2025
Analyzed 250 stores, identified productivity drivers, recommended store actions, and quantified 128 new door opportunities for strategic growth and profitabilit
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Clients
The North Face
