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Content
of a Typical Commercial Due Diligence Brief
The
following is a typical list of what we would cover in a Commercial
Due Diligence Study.
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Strategic |
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Key market parameters
including size, growth rates, price and volume dynamics in
each market segment.
Market segmentation by key categories.
Key market drivers.
Achievability of business plan (in particular issues such
as roll-out, stock investment, margin growth, sales growth.)
Key suppliers and brands.
Brand, product range and price differentiation against key
competitors. Importance of major brands.
Supply chain dynamics and key elements of The Value Chain.
Store layout, product positioning, sales productivities.
Key financial benchmarks and KPI’s.
Retail Outlet Portfolio analysis by region, vintage, format,
contribution, etc.
Competitor reviews and audits.
Barriers of entry/competitive threats.
International feedback on threats/opportunities.
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Customer |
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What are the core customer profiles? (Age,
sex, demographics, alone vs. with partner/friend). Do they shop
across market segments?
Who are the big spenders, and their value?
How is the business/brand perceived against key competitors?
Where else do customers shop and why?
Awareness as a national brand and importance thereof.
What are the key reasons for buying (key events vs. impulse
vs. response to marketing)? Are customers buying for themselves
or others?
What drives footfall? Importance of product range, brands, customer
service, windows, overall appearance, prices.
What is the conversion rate of footfall to sales?
Price comparability and sensitivity.
Frequency of purchase, and occasion of purchase.
How do consumers act in economic downturns?
Effects of e-commerce, foreign exchange. Do customers purchase
abroad? On the internet? Via direct mail?
Is there a different customer profile/spending patterns in different
formats (High St. vs. mall, old format vs. new, regional differences,
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Operational |
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Review of management structure and organisation.
Key processes and competences. Strengths and weaknesses.
Quality and skills at key management levels.
Management information processes.
IT systems – output and suitability. |
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