SAQSAQPresented by:Presented by:

Delattre ThereseDelattre ThereseGroizard CarlosGroizard CarlosPetersen PabloPetersen Pablo

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ContentContent

What is SAQ?What is SAQ? B2C siteB2C site B2B solutionsB2B solutions Value creation & captureValue creation & capture ConclusionConclusion

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Société des alcools du Société des alcools du QuébecQuébec(SAQ)(SAQ)

State-owned corporation responsible for State-owned corporation responsible for the trade of alcoholic beverages. the trade of alcoholic beverages. (Monopoly) since 1921(Monopoly) since 1921

5500 employees5500 employees $2.4B annual sales(2003) ($540M net $2.4B annual sales(2003) ($540M net

income)income) 77% Consumers and 23% Permit Holders77% Consumers and 23% Permit Holders Network:Network:

– 30 Express, 290 Classiques, 66 Sélections and 2 30 Express, 290 Classiques, 66 Sélections and 2 Signature storesSignature stores

– www.saq.com Web site VSOP System www.saq.com Web site VSOP System – 6 SAQ Dépôt stores and 3 bulk wine points of sale.6 SAQ Dépôt stores and 3 bulk wine points of sale.

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50% Mediagrif, 50% SAQ

International Wine Makers

Agents

Local Wine MakersSAQ.COMSAQ.COM

Customers

Permit Holders

Globalwinespirits.comPublic B2B

SAQOther Buyers

B2B

B2BB2C

B2C

$$$

$$$

= <.2% of sales

++

= Most purchases

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Net income 1994-2004

Distribution of Selling PriceMarch 2000

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How much goes to IT?How much goes to IT?

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Purpose of sitePurpose of site Age constraintsAge constraints Delivery constraintsDelivery constraints Prices are the samePrices are the same

www.saq.comwww.saq.com

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B2C-FeaturesB2C-Features

ABCs of Wine, ABCs of beer, ABCs of SpiritsABCs of Wine, ABCs of beer, ABCs of Spirits Recipes, games, adviceRecipes, games, advice PromotionsPromotions Links to Clubs & AssociationsLinks to Clubs & Associations Extensive list of related sites links & Search Extensive list of related sites links & Search

enginesengines

The The Courrier vinicole Courrier vinicole publication (membership)publication (membership) Groceries & Convenience Stores SectionGroceries & Convenience Stores Section

Business-to-Entertainment sectionBusiness-to-Entertainment section– Gift CertificatesGift Certificates– Gift ShopGift Shop– Business receptions ideasBusiness receptions ideas

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Measures of SuccessMeasures of Success

Surveys & Customer complaintsSurveys & Customer complaints 9000 visits daily & growing9000 visits daily & growing The The Courrier vinicole Courrier vinicole publication publication

2000 members2000 members SAQ e-Newsletter – 115,000 usersSAQ e-Newsletter – 115,000 users 1500 orders/week @ 93% efficiency1500 orders/week @ 93% efficiency

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SAQ.com PAWine.com Wine.com

Ownership State owned State owned Private retailer

Products 3,000 labels 55 countries

Over 1000 wines 2500 labelsDomestic & Intl’s

E-catalogue Yes Yes Yes

Registration Required Required Optional

Return policy 30 days 30 days 30 days

Customer Service

Phone & e-mail Phone & e-mail On-line specialists available

Delivery service Canada Post3 options 3 – 5 days deliveryFree delivery >$50

UPS 2 days deliveryFree ship to liquor store of choice in PA

UPS, FEDEX, DHL 7 - 10 days deliveryMax 24 bottles for 12 Sates

Order tracking On-line throughout delivery

On-line 24 delay tracking

Market QC, Canada PA, USA 30 States in USA & Japan

Special features • Wish list program• e-Newsletter • Courier Vinicole • Outlets link

Wine connection program (sampling)

• Wish list program• e-Newsletter• Party planner

Sites Comparison: B2CSites Comparison: B2C

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Business to BusinessBusiness to Business

One private (SAQ-B2B) and the other One private (SAQ-B2B) and the other one public (Global Wines and Spirits one public (Global Wines and Spirits – GWS).– GWS).

Globalwinespirits.comGlobalwinespirits.com– 5 languages5 languages– Call for tendersCall for tenders– Spot market placeSpot market place– CataloguesCatalogues– Private extranetsPrivate extranets– File management/conversionFile management/conversion

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SAQ-B2B.comSAQ-B2B.com

A private B2B transactional portal A private B2B transactional portal owned and operated by the SAQ’s owned and operated by the SAQ’s e-Commerce Divisione-Commerce Division

No membership fees, product list or No membership fees, product list or per-transaction fees to payper-transaction fees to pay

SAQ is the only buyer on the portalSAQ is the only buyer on the portal

The SAQ online saves time, effort and The SAQ online saves time, effort and money money (purchasing, shipping, and receiving)(purchasing, shipping, and receiving)

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SAQ-B2B.com SAQ-B2B.com (con’t)(con’t)

The only equipment required is a The only equipment required is a computer and Internet access computer and Internet access

Highest industry standards for Highest industry standards for security, boasting data encryption, security, boasting data encryption, back-up support systems and firewallsback-up support systems and firewalls

Easy-to-use functionsEasy-to-use functions (call for tenders, (call for tenders, logistics mgt, doc sharing, freight forwarders, and logistics mgt, doc sharing, freight forwarders, and shipment tracking)shipment tracking)

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The questions of added ValueThe questions of added Value

How does SAQ add value to its How does SAQ add value to its core business through its web core business through its web site?site?

How is the value created How is the value created captured ?captured ?

– By SAQBy SAQ– By SuppliersBy Suppliers– By CustomersBy Customers– By TaxpayersBy Taxpayers

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How can a wine retailer How can a wine retailer add valueadd value on-lineon-line

Value added

Knowledge baseKnowledge base Category searchCategory search PersonalizationPersonalization Exchange forumsExchange forums B2CB2C Up-stream B2B Up-stream B2B Down-stream B2BDown-stream B2B

SAQ

YesYes YesYes NoNo NoNo YesYes YesYes NoNo

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Benefits for SAQ of going Benefits for SAQ of going electronicelectronic

Characteristics of the Internet ReachReach Flexibility and ease Flexibility and ease

to useto use PersonalizationPersonalization Interactivity Interactivity Asynchronous Asynchronous

communicationcommunication E-Commerce E-Commerce

transactionstransactions B2BB2B

SAQ application benefits

Restricted to QCRestricted to QC Benefits customers (no Benefits customers (no

impact on growth)impact on growth) Potential not exploitedPotential not exploited Forums not availableForums not available E-mail support providedE-mail support provided Optional to customers Optional to customers

and compulsory to and compulsory to supplierssuppliers

Limited to suppliersLimited to suppliers

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Creation of valueCreation of value

Reduction of transaction costs (relative low Reduction of transaction costs (relative low

importance)importance) Accessibility of knowledge base to Accessibility of knowledge base to

customerscustomers– ProductsProducts– PricesPrices– Retail stores dataRetail stores data

Convenience of home deliveries to Convenience of home deliveries to customerscustomers

Certainty of product availability at retail Certainty of product availability at retail storesstores

Electronic transactions with suppliers (B2B)Electronic transactions with suppliers (B2B)

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Increased process efficiencies due Increased process efficiencies due to systems integration throughout to systems integration throughout

the Supply Chainthe Supply Chain

On line E-Commerce transactions On line E-Commerce transactions linked to SAQ’s ERP systemlinked to SAQ’s ERP system

Suppliers’ integration via: Suppliers’ integration via: – B2B portal (transactional via EDI)B2B portal (transactional via EDI)– Global Wine & Spirits portal Global Wine & Spirits portal

PRP (Planned Replenishment PRP (Planned Replenishment Model) to be implementedModel) to be implemented

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How is the created value How is the created value being captured?being captured?

By SAQBy SAQ– Enhancements achieved through Enhancements achieved through

site don’t play as a differentiating site don’t play as a differentiating factorfactor

– Cost reductions obtained not even Cost reductions obtained not even quantifiedquantified

– Market: Captured and limited to QCMarket: Captured and limited to QC• Growth of market in Quebec not a Growth of market in Quebec not a

government prioritygovernment priority• Limited cannibalization from outlets Limited cannibalization from outlets • Promotion of site self restrictedPromotion of site self restricted

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How is the created value How is the created value being captured?being captured?

By SAQ’s suppliersBy SAQ’s suppliers– Increased efficiency through Increased efficiency through

electronic transactionselectronic transactions– Improved logisticsImproved logistics– Access to on-line sales information Access to on-line sales information

(overnight updates)(overnight updates)– Close communication on Close communication on

promotional activities (through promotional activities (through agents)agents)

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How is the created value How is the created value being captured?being captured?

By SAQ’s customersBy SAQ’s customers– Access to knowledge base and Access to knowledge base and

specialized consulting servicesspecialized consulting services– On-line ordering convenienceOn-line ordering convenience– Home delivery service (flexible Home delivery service (flexible

service optional)service optional)– Access to on-line information on Access to on-line information on

inventories at outletsinventories at outlets– 17/5 Call center (complementary 17/5 Call center (complementary

info.) info.)

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How is the created value How is the created value being captured?being captured?

By taxpayers (as stakeholders)By taxpayers (as stakeholders)– Transparency: On-line access to all Transparency: On-line access to all

information information

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ConclusionConclusion

Small part of a larger supply chain Small part of a larger supply chain integration strategyintegration strategy

Some products are not easily or Some products are not easily or desirably sold onlinedesirably sold online

The SAQ is using the web technology The SAQ is using the web technology to complement its service to the to complement its service to the consumer and to the suppliersconsumer and to the suppliers

Whatever time is saved from buying Whatever time is saved from buying online is time to be used to savor the online is time to be used to savor the wine!wine!

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THANKS !THANKS !