Tools

1. Tools 1 Text Growth in short run, niche leader in long run Goal Frame Textbox ABC Vertical Risks Circle Export ✓ X 6% CAGR Takeaway Analysis | 1. Enter | 2. Collaborate | 3. Milk | Financial Feasibility | Timeline

2. March 16th, 2013 Presented to: By: Dominik Bundschuh, Kim Graves, Amelia Lak and HelgeRatvik

3. Lauren Bruce – PiaGhosh – Andy Nesta – Tim Tong

4. Cirque du Soleil Presented to Daniel Lamarre CEO and President of Cirque du Soleil March 13, 2008 JDRC Consulting

5. Ready, Steady, Grow Presented to Bjorn Magnusson By Jedi Consulting March 4th 2011

6. March 1st, 2013 Presented to: By: Lauren Bruce, Andy Nesta, PiaGhosh and Tim Tong

7. Executive Summary Mission to India Fonterra needs to develop a strategy to break into the Indian market both short-term and in the long-run, while accounting for key players How do you match lack of supply and growing demand? How do you minimize industry and government reluctance? How do you establish brand presence in India? Questions to consider Break into India with non-cooled products Co-ownership of plant with IFFCO in Nellore Develop own production in the long-run Strategy Where you want to be Capture a maximal market share in the rapdidly growing, largest dairy market in the world Analysis|1. Enter | 2. Collaborate | 3. Milk | Financials | Timeline

8. Vision for Expansion Vision: Milk India’strue potential for Fonterra Leverage expertise in production and processing Break through rapid entry Strong brand presence Analysis|1. Enter | 2. Collaborate | 3. Milk | Financials | Timeline

9. How can you overcome these burdens? We need a solution that…. To account for all these barriers and capture a maximal piece of the pie, your strategy needs to fulfill several requirements: Rapid entry Strong brand presence Local support Reliable supply chain Breaking into the Indian market with strong brand presence and local support will secure Fonterra in a favorable and competitive position Analysis|1. Enter | 2. Collaborate | 3. Milk | Financials | Timeline

10. Generation 2010 2040 16% Biomass Biomass Need a solution that is: Clean Reliable Profitable Scalable Gas 67% 31% Fuel Breakdown 19% Oil Gas Coal 33% 34% Need a clean, reliable, profitable and renewable solution to achieve 2040 vision.

11. Decision Criteria Clean Reduce CO2 and other emissions Reliable Flexible to match volatile demand Profitable Financially feasible Scalable Not depleted by use Scalable to match increasing population

12. Recommendation 3 2 Collaborate to form a co-ownership plant with IFFCO in Nellore Milk the market by developingautonomous production, processing and distribution channel system in the long run Enter with non-cooled products 1 • Rapid market entry • Establish brand presence • Simplified channel system • Government and industry support • Positive perception • Permanent establishment as a strong market player in India 2 - 5 years 5 years onwards Right now Analysis | 1. Enter | 2. Collaborate | 3. Milk | Financials | Timeline

13. Why enter with non-cooled products Quick implementation Low resource commitment Export How? Middle Class • Urban agglomerationPurchasing power Who? Urban centres Where? Easier initial distribution system Premium powder Less time-sensitive supply chain Product? Analysis | 1. Enter | 2. Collaborate | 3. Milk | Financials | Timeline

14. Choosing cities to target middle class Goal: gain rapid entry and establish brand presence Analysis | 1. Enter | 2. Collaborate | 3. Milk | Financials | Timeline

15. Choosing the airports for travel retail expansion Charles de Gaulle, Heathrow, and Schipol are the most attractive airports for Toms to reach the widest international audience.

16. Short-term strategy A B C Idea in brief: • 3 year membership program • All access card to attend Cirque shows worldwide • Price: $700 Impact on company • Increase in occupancy rates • Increase in loyalty • Subsequent increase in profits Metrics for success: • 90% occupancy within two years • Increase in profits by over 10% • Sell pass to 8% of current visitors • Increase revenues for MGM

17. A brief history A B C Revenues 1980 1987 1984 future Le Grand Tour du Cirque du Soleil was a pivotal point in the company’s history

18. The Generosity Card The Generosity Card Value Proposition Financial goals Compel guests Incent card usage Effective execution 1. Offering a free Welcome Generosity gift to entire customers to join loyalty program. 2. Year-round automated rewards scheme. €5 gift for every €100 spent. 3. Limited time offer seasonal promotions during holidays. 3. Limited time exclusive offers for high loyalty/high profit customers. Source: Paytronix, 2010

19. Moving into new markets Largest impediment to international growth is low bargaining power with distributors Use data to eliminate the barriers Unknown geographical market demand Distributors don’t know Toms’ brands Use push tactics in markets with high likelihood to buy Use data as evidence of customer loyalty in negotiations Increase the likelihood of success in international expansions by correctly applying data

20. Prorated first year financial results Variable Costs Incremental Revenue: DKK 39.7 Million 6% 42% Fixed Costs 26% 15% Other Costs 4% 1% 7% Revenue EBIT COGS Promotions Airport Retail Space Loyalty Card Launch Customer Loyalty Costs In-store experience

21. Resulting financial strengths and synergies Travel retail Availability More loyalty cards Increased sales in travel retail Sampling strategy Preference Generosity Card Loyalty Ad Campaign Awareness Experience store Familiarity Affordable luxury Personality Toms’ strategies form a positive feedback loop which can achieve scalable growth Fun, Danish, Luxury Associations The total 5 year NPV of the travel retail and loyalty programs is DKK 44.1 Million

22. Pros and Cons of Toms Sales Channels Indirect Direct Boutique Stores Online Traditional Retail Travel Retail Exports -Standard Exports - Tailored -Large volume - Targets desired segments -More accommodating sales displays - “Traveller exclusive” -Low capital investment -Widespread reach -Widespread reach -Full control over sales displays - Gives consumers the full experience -Exposure to world’s largest retailers PROS - High fixed costs - Unproven revenue generation -Little leverage of brand equity - Misses impulse nature of chocolate -Limited in scope - Require large orders -Low volume -Standard batches - Low bargaining power with customers - Little consumer insight - Limited ability to be frequent customer CONS

23. Timeline for Action A B C 2010 1994 2008 2012 2014 • Partnerships with Las Vegas Sands and Dubai World • Sold 20% equity stake to Dubai investors Las Vegas United States Dubai Middle East Macao China & Tokyo Japan London Europe Singapore SE Asia Cirque has already begun expansion efforts abroad while forging select partnerships

24. Finding partnership in London comparable to MGM’s Profitability? A B C Partnership options: Historical IRR 16%+ • High return on capital • Strong history in London • Opportunity to be first hub in Europe Capital needed $100-200M Value proposition to funders:

25. Leveraging the ability to test markets • Travel Retail • Develop customer loyalty • Create brand awareness • Uncover customer data • Export Market • Direct market access • Small commitment • Market testing • Traditional Retail • Established presence • Stable revenue • Frequent customer • touch points 6% CAGR Toms has the ability to use each sales method as a testing platform to make successive steps towards becoming a more integrated international player

26. Recap Step 1: Non-cooled products Question Solution Outcome How will you establish brand presence in the short-term? Export non-cool products to the middle class Middle class familiarization and adoption of Fonterra products Analysis | 1. Enter | 2. Collaborate | 3. Milk | Financials | Timeline

27. Win-win through co-ownership Fonterra Co-op • Pooling of technology • Reliability in product quality • Gain education to improve profitability and productivity • Avoid tariffs • Access to farmland • Gain consumer knowledge • Large scale market entry with shared risks Entry barriers can be reduced through government and industry support Analysis | 1. Enter | 2. Collaborate | 3. Milk | Financials | Timeline

28. Pros Cons Co-ownership • Pooling of Resources & knowledge • Large-scale market entrywithout high risk • Avoidance of import tariffs • Lower foreign exchange risk • Stronger government support • Shared profit • Investment cost • Lack of complete control increases quality risk • Limited flexibility • Politicking with other owners

29. CONTROLING BRAND IMAGE “REAL BEAUTY” TRADITIONAL Unilever’s Brand Management Team Unilever’s Brand Management Team Dove Brand Image Dove Brand Image Consumers Consumers Consumers Consumers With Internet as a marketing channel, Unilever can no longer have full control over Dove’s brand image

30. How will you deal with corruption? Risks Mitigation Severity Corruption Ensure strict process controls, working with all levels of government Medium Likelihood Medium

31. Risk of Uncooperative International Retail Stores Risk International Retail Stores refuse to allow Toms to increase retail space Impact Loyalty Program: Smaller rollout Travel Retail Sales: Same as before Anthon Berg Brand: Uncertain Mitigation Move to the next most attractive airport Consider sharing a 2.5% spread in margin

32. Educate Nellore’s farmers Educate farmers on On-farm management skills Pivotal link: IFFCO Milk quality Productivity • Indian Farmers Fertiliser Cooperative Limited: • 40,000 farmers Stronger acceptance

33. Controlling the value chain Retail Distribution Dairy supply Plant Large retailers IFCCO farms Cold Star Systems Feasibility Study Push towards middle class Own farms, if needed Government Approval Warehousing Premium positioning National milk quality standards Build Plant Strong city connections Analysis | 1. Enter | 2. Collaborate | 3. Milk | Financials | Timeline

34. 2. How it works Where the Outputs Go Solid Fuel Fertiliser Recycled Products Biogas Solid Transport Pipeline Solid Transport Land transport Transportation Method FCC Environment Severn Power Station FCC Environment Severn Power Station Channel Partner External Site External Site CHP Plant CHP Plant Destination

35. An acquisition strategy would favour competitors Opportunities to expand through: Acquisitions Organic Retail Growth Trend of consolidation among confectionery producers bid up prices Acquisitions force Toms to fight a battle it cannot win Suitable acquisitions are scarce Recent 2012 acquisitions compromises financial flexibility Without deep pockets like its competitors, Toms’ 5 year strategy cannot purely rely on acquisitions

36. Detailed analysis of H&M’s competitive positioning Source: BCG analysis, Team Jedi analysis, H&M annual report 2009

37. What does the recommendation accomplish? 3 Grow Anthon Berg in travel retail markets while preparing for international, traditional expansion in the future Take Off International 2 • Use loyalty programs • Gather customer data Chart your course Loyalty program • Leverage Toms’ existing • brand equity in Anthon Berg • Use International travel • Retail Stores 1 Build the foundation Capture the travel retail space Growth in short run, niche leader in long run Goal

38. Consolidation a result of highly competitive industry Suppliers Buyers • Supplier size and independence • Quality control • Switching cost • Direct to consumer • Indirect (eg. through a parent) • Available information about attributes Rivalry • Highly fragmented industry • Experiencing consolidation Threat of new entrants Substitute products • Low cost of entry • Suppliers accessible • Low IP involved • None • (non-branded clothing) Unattractive market force Attractive market force

39. Implementation Timeline