SAQ Presented by Delattre Therese Groizard Carlos Petersen

SAQ Presented by: Delattre Therese Groizard Carlos Petersen Pablo

Content w What is SAQ? w B 2 C site w B 2 B solutions w Value creation & capture w Conclusion 2

Société des alcools du Québec (SAQ) w State-owned corporation responsible for the trade of alcoholic beverages. (Monopoly) since 1921 w 5500 employees w $2. 4 B annual sales(2003) ($540 M net income) w 77% Consumers and 23% Permit Holders w Network: – 30 Express, 290 Classiques, 66 Sélections and 2 Signature stores – www. saq. com Web site VSOP System – 6 SAQ Dépôt stores and 3 bulk wine points of sale. 3

Globalwinespirits. com SAQ Other Buyers Public B 2 B $$$ 50% Mediagrif, 50% SAQ $$$ International Wine Makers B 2 C Agents Local Wine Makers Customers B 2 B + + B 2 B SAQ. COM = Most purchases Permit Holders B 2 C = <. 2% of sales 4

Net income 1994 -2004 Distribution of Selling Price March 2000 5

How much goes to IT? 6

www. saq. com w Purpose of site w Age constraints w Delivery constraints w Prices are the same 7

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B 2 C-Features w w w ABCs of Wine, ABCs of beer, ABCs of Spirits Recipes, games, advice Promotions Links to Clubs & Associations Extensive list of related sites links & Search engines w The Courrier vinicole publication (membership) w Groceries & Convenience Stores Section w Business-to-Entertainment section – Gift Certificates – Gift Shop – Business receptions ideas 9

Measures of Success w Surveys & Customer complaints w 9000 visits daily & growing w The Courrier vinicole publication 2000 members w SAQ e-Newsletter – 115, 000 users w 1500 orders/week @ 93% efficiency 10

Sites Comparison: B 2 C SAQ. com PAWine. com Ownership State owned Private retailer Products 3, 000 labels 55 countries Yes Over 1000 wines Yes 2500 labels Domestic & Intl’s Yes Registration Required Optional Return policy 30 days Customer Service Phone & e-mail On-line specialists available Delivery service Canada Post 3 options 3 – 5 days delivery Free delivery >$50 On-line throughout delivery QC, Canada UPS 2 days delivery Free ship to liquor store of choice in PA UPS, FEDEX, DHL 7 - 10 days delivery Max 24 bottles for 12 Sates On-line 24 delay tracking PA, USA • Wish list program • e-Newsletter • Courier Vinicole • Outlets link Wine connection program (sampling) 30 States in USA & Japan • Wish list program • e-Newsletter • Party planner E-catalogue Order tracking Market Special features 11

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Business to Business w One private (SAQ-B 2 B) and the other one public (Global Wines and Spirits – GWS). w Globalwinespirits. com – – – 5 languages Call for tenders Spot market place Catalogues Private extranets File management/conversion 13

SAQ-B 2 B. com w A private B 2 B transactional portal owned and operated by the SAQ’s -Commerce Division w No membership fees, product list or per-transaction fees to pay w SAQ is the only buyer on the portal w The SAQ online saves time, effort and money (purchasing, shipping, and receiving) e 14

SAQ-B 2 B. com (con’t) w The only equipment required is a computer and Internet access w Highest industry standards for security, boasting data encryption, back-up support systems and firewalls w Easy-to-use functions (call for tenders, logistics mgt, doc sharing, freight forwarders, and shipment tracking) 15

The questions of added Value w How does SAQ add value to its core business through its web site? w How is the value created captured ? – By SAQ – By Suppliers – By Customers – By Taxpayers 16

How can a wine retailer add value on-line Value added w w w w Knowledge base Category search Personalization Exchange forums B 2 C Up-stream B 2 B Down-stream B 2 B SAQ Ø Yes Ø No 17

Benefits for SAQ of going electronic Characteristics of the Internet w Reach w Flexibility and ease to use w Personalization w Interactivity w Asynchronous communication w E-Commerce transactions w B 2 B SAQ application benefits Ø Restricted to QC Ø Benefits customers (no impact on growth) Ø Potential not exploited Ø Forums not available Ø E-mail support provided Ø Optional to customers and compulsory to suppliers Ø Limited to suppliers 18

Creation of value w Reduction of transaction costs (relative low importance) w Accessibility of knowledge base to customers – Products – Prices – Retail stores data w Convenience of home deliveries to customers w Certainty of product availability at retail stores w Electronic transactions with suppliers (B 2 B) 19

Increased process efficiencies due to systems integration throughout the Supply Chain w On line E-Commerce transactions linked to SAQ’s ERP system w Suppliers’ integration via: – B 2 B portal (transactional via EDI) – Global Wine & Spirits portal w PRP (Planned Replenishment Model) to be implemented 20

How is the created value being captured? w By SAQ – Enhancements achieved through site don’t play as a differentiating factor – Cost reductions obtained not even quantified – Market: Captured and limited to QC • Growth of market in Quebec not a government priority • Limited cannibalization from outlets • Promotion of site self restricted 21

How is the created value being captured? w By SAQ’s suppliers – Increased efficiency through electronic transactions – Improved logistics – Access to on-line sales information (overnight updates) – Close communication on promotional activities (through agents) 22

How is the created value being captured? w By SAQ’s customers – Access to knowledge base and specialized consulting services – On-line ordering convenience – Home delivery service (flexible service optional) – Access to on-line information on inventories at outlets – 17/5 Call center (complementary info. ) 23

How is the created value being captured? w By taxpayers (as stakeholders) – Transparency: On-line access to all information 24

Conclusion w Small part of a larger supply chain integration strategy w Some products are not easily or desirably sold online w The SAQ is using the web technology to complement its service to the consumer and to the suppliers w Whatever time is saved from buying online is time to be used to savor the wine! 25

THANKS ! 26