Mr. R. Kader outlines a strategy to reduce customer returns, which cost R50 million annually for Edcon's Discount Division (Jet, Jetmart, Legit brands). Returns negatively impact cash flow, profits and employee incentives. The strategy focuses on improving processes for customer returns across departments through alignment, training and governance. Data shows Jetmart stores and house-branded appliances have highest return rates. The strategy identifies maintenance, improvement and execution approaches for supplier agreements, central returns processing, quality assurance and customer service to achieve the goals of improved customer experience and reduced costs of returns. Leadership alignment on goals, communication of strategy and training on new processes will be required for successful implementation.

1. Mr. R. Kader
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2. Strategy Alignment
TABLE OF CONTENTS
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3. Strategy Alignment
INTRODUCTION
Alignment of my area of responsibility to the Edcon company strategy is required. As a
project manager for Discount Division Operations (Jet, Jetmart & Legit), I have chosen to
focus on customer returns which is costing us R 50million annually at cost of the products
we offer.
Reason for my choice of topic:
1. Liquidity of our company is being affected as we have to pay suppliers R 50million
(Liabilities) on products returned by customers that we are unable to re-sell.
2. These liabilities are payable within a 30 day period, hence our cash flow is directly
affected in the process.
3. Profitability of our company is being reduced.
4. Employee incentives are affected by the reduced profits.
5. The various departments within our company are working in silos, hence internal
frustration is rife.
6. Stores have no clear directives, processes and understanding.
7. Customer are unsatisfied with the products and services we are providing.
In this document I wish to use a structured approach by applying Systems Analysis,
Strategic Alignment, Change Process, Risk Analysis and Research to not only address the
above mentioned short comings but also set a platform to mitigate these short comings in
future.

4. Strategy Alignment
UNDERSTANDING THE PRESSURE FOR CHANGE
What?
We as Edcon (Discount Division) want to improve our customer service in order to sustain
growth in our market share, secondly we want to reduce expenditure in order to improve our
liquidity as a company and in doing so create a sustainable competitive advantage.
Why?
Above the Line stakeholders (Executive Team):
• This equates to R30 million in Discount Division annually at cost in customer returns
and equates to 10% of the respective product sales which only has a 30% input
mark-up.
• Customer satisfaction is at its lowest levels in comparison to the past 5 years.
• Operating leverage is being pressurised un-necessarily though incurring a cost which
can be managed through understanding governance better and servicing our
customers more efficiently.
Lateral stakeholders (Cross-Functional Departments):
By affecting customer returns constructively:
• Customer satisfaction in our service will improve (Customer Services Dept.).
• Positive perception of our business in the market place from our customer will assist
the Marketing Department in strengthening our Brand.
• Finance & Admin departments will receive less queries from stores regarding
charges against their expense line.
• Centralised Store Returns department will be able to stream-line their operation by
reducing the amount of time spent in validating returns.
Below the Line stakeholders (Regional & Store Managers):
• Employees are demotivated and frustrated as they faced with dissatisfied customers
as a result of unclear expectancies, reverse logistics are resulting in additional
expenditure, suppliers are unaware of inferior products (dissatisfied customers) and
this is resulting in the longevity of our business being jeopardised.
• Should we reduce the amount of customer returns, the result will impact our nett
profits directly and increase employee benefits (Increases & Bonuses).

5. Strategy Alignment
Contribution of the Discount Division Chain (Jet, JMT & Legit Brands) on the Edcon group
equates to 60% of all customer returns as illustrated below:
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6. Strategy Alignment
TARGET STATE: CLEAR, SHARED VISION
A critical requirement for successful change and strategy achievement is for the leadership
to have a CLEAR and SHARED VISION of the target state or destination that needs to be
achieved. The target state must be:
Clear, specific and measurable.
Comprehended exactly the same by every leader.
No room should be allowed for interpretation – this creates chaos.
Organisational Transition Requirements
What will stop and why
(impact and effect)?
What will start and why
(impact and effect)?
What will continue and why
(impact and effect)?
Current process for customer
returns, as this is costing the
company R 50m annually.
New Customer Returns
Process, to improve the current
process and reduce the
negative impact of customer
returns.
Employee structures will
remain unchanged.
Alignment of all functional
departments with reference to
governance. (Operations,
customer services, marketing
and merchandise team)
Our current Systems
Technology is sufficient.
Supplier agreements and
products to be reviewed, to
ensure customer’s
expectancies are being met.
(Quality)

7. Strategy Alignment
Strategic Change Alignment
Considering the organisational change and transition – what is the impact/effect on my area
of responsibility?
Area of Responsibility Transition Requirements
What will stop and why
(impact and effect)?
What will start and why
(impact and effect)?
What will continue and why
(impact and effect)?
Current Customer Returns
process will stop at stores, as
the lack of staff knowledge
about how to assist customers
with returns is affecting the
customer experience.
New Customer Returns
process will assist customers
to have a better shopping
experience. Process will
include standardised
documentation, consistent
process between stores,
training (process & technical)
and Governance.
Our staff structure will remain
unchanged as we do have
return’s specialist in our bigger
stores and in our smaller
stores managers will sign off all
returns.
New equipment will be
introduced to assist with testing
products in stores to allow for
customers to receive
immediate service during their
return’s transactions. (Circuit
Breakers multi plugs)
Supplier agreements and
products to be reviewed to
ensure products are of the
standards expected by the
customer.
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8. Strategy Alignment
Alignment Considerations Impact Status
Ind.
Business unit strategy & values
Operational capacity
Systems
Staff competence
Suppliers and strategic
partners
• Current computer systems will be sufficient.
• Staff competency is good.
• Suppliers have an expectancy of adherence to
their returns policy from us as a retailer, however
they are not aware of all the challenges arising in
stores from our customers.
Business processes &
Governance
Should the status quo of our process be maintained,
we will never address the customer service challenge
or alleviate the current financial costs to our business,
as all the various departments / functions (operations
& customer services call centre) of the business
currently address customer returns in very different
ways. Governance in terms of the way we implement
C.P.A. across the different functions of the business
varies at which point our customer doesn’t receive
consistently good customer service from us as a
retailer.
Budgets In order to monitor and ensure improvement we will
have to ensure budgets/targets are achievable and
stretch us simultaneously.
Standardised / Periodic Reporting Standardised, periodic and consistent reporting will
increase our understanding of customer returns and
allow for us to improve our business decisions, such
as understanding:
• Which stores are performing badly and why?
• Which products are consistently being
returned and why?
• Which time periods do our return’s volumes
peak and why?
Due to the lack of understanding of the above
questions we are unable to focus our resources
constructively to improve our customer service.

9. Strategy Alignment
Assessment of readiness of my area of responsibility
The graph below represents the various functional areas of our business which are impacted
by customer returns.
Strategies to address business requirements are as follows:
• Distribution Centre’s process to remain unchanged and performance to be maintained.
• Customer services performance and process to be improved.
• Quality assurance (Q.A.) on suppliers to be improved, as only 3% of the total number
of our suppliers are not going through quality checks.
• The main contributing factor to invalid customer write-offs is being generated from
stores, hence our focal point will be operations.
P
E
R
F
O
R
M
A
N
C
E
Great Good
Distribu
tion
Centre
Customer
Services
Suppliers /
Products
Quality
Assurance
Operations
(Stores)
Maintenance
Strategy
Improvement
Strategy
Aggressive Improvement and Change Management
Strategy

10. Strategy Alignment
As previously highlighted operations requires focus, the analysis below shows that our
Jetmart branded stores are the poorest performer in customer returns.
Ranking of brands is as follows (annually):
Brand Value (mill) % Contr.
Jetmart R 22.5 75%
Jet R 6.0 20%
Legit R 1.5 5%
Discount Division R 30.0 100%
P
E
R
F
O
R
M
A
N
C
E
Great Good
Jet
Jetmart
Maintenance
Strategy
Improvement
Strategy
Aggressive Improvement and Change Management
Strategy
Legit

11. Strategy Alignment
Products offered in a Jetmart store are:
1. Soft-lines (Clothing / Textiles, footwear & accessories). These returns from
customers are currently accumulated at a centralised point and assist us to ascertain
quality issues of products in our stores and contributes 0.1% to total Soft-lines sales
therefore we are happy to incur this cost.
2. Hard-lines (Appliances, kitchenware, baby feeding, furniture & luggage). This area
requires further analysis and is problematic.
3. Cell phones. Although we incur R 500,000 in returns annually, our suppliers indirectly
reimburse us for this cost in rebates, due to the volume that we purchase from them
and therefore this cost is offset.
Ranking of product types is as follows (annually):
Products Types Value (mill) % Contr.
Hard-lines R 20.0 91%
Soft-lines R 1.5 7%
Cellular R 0.5 2%
Total Jetmart R 22.5 100%
P
E
R
F
O
R
M
A
N
C
E
Great Good
Hard lines
Maintenance
Strategy Aggressive Improvement and Change Management
Strategy
Soft lines
Cellular

12. Strategy Alignment
Composition of Hard lines (General Merchandise) is as follows:
1. House branded appliances (Kettles & Irons). 64% of all customer returns is
accumulated from our House branded kettles and Irons, equating to R 19.2m
annually.
2. Branded appliances (Kettles, Microwaves & Irons). Currently 98% of customer
returns on this product is replaced or repaired by the supplier, hence costs to our
business is negligible.
3. Large appliances (TV’s & fridges). Currently 99% of customer returns on this product
is replaced or repaired by the supplier, hence costs to our business is negligible.
4. Other Hards (kitchenware, baby feeding, furniture & luggage). These returns from
customers are currently accumulated at a centralised point and assist us to ascertain
quality issues of products in our stores; contributing a very small percentage to sales,
hence we are happy to incur this cost.
Ranking of products is as follows (annually):
Products Value (mill) % Contr.
House branded App (HBA) R 19.2 96.0%
Branded App (BA) R 0.4 2.0%
Other Hards (OH) R 0.3 1.5%
Large appliances (LA) R 0.1 0.5%
Total Hard lines R 20.0 100%
P
E
R
F
O
R
M
A
N
C
E
Great Good
HBA
Maintenance
Strategy Aggressive Improvement and Change Management
Strategy
OH
LA
BA

13. Strategy Alignment
Customer returns on House branded appliances are affected by the areas listed below:
1. Supplier agreements are in place and effect our business through, quality of the
product, returns policy and hence the customer directly. This agreement must be
reviewed periodically to ensure alignment with changes in the market place arising
from changes in our customer’s needs.
2. Centralised Store Returns department (C.S.R.) is responsible for ensuring they can
provide supply chain support for all the returns from customers to stores and back to
the various suppliers. (reverse logistics) Although some suppliers are willing to
manage this on certain products, all of our hard-lines suppliers prefer that we collate
the returns, validate and then pass on returns back to them in bulk. We require
improvement here as not all suppliers are collecting valid returns.
3. As much as product quality is the responsibility of the supplier, we are customer
facing and therefore we have a Quality Assurance department (Q.A.) responsible for
testing that products are of the desired quality for our customers. Improvement
required as not all of our house branded merchandise is being tested currently.
4. Processes for all departments must be aligned to the customer expectations
especially from the sales assistant all the way to every head office function,
otherwise we risk confusing and upsetting our customers. Once customers are
disappointed by a brand the chances of us losing them to the competition are not
high but rather guaranteed.
P
E
R
F
O
R
M
A
N
C
E
Great Good
Customer
Service
Maintenance
Strategy
Process
Equipment
Supplier
Agreement
Improvement
Strategy
Execution Strategy
Customer
Services
Dept.
Product
Quality
Centralised
Store
Returns
Dept.

14. Strategy Alignment
Areas of focus to achieve the strategy:
1. Maintenance strategy:
• Supplier agreements must be maintained in line with business requirements.
Business needs will be determined by the customer’s expectation of the
products desired by them.
2. Improvement strategy:
• Focus on improving the function of the Centralised Store Returns
Department. This department will have to align their current processes to
assist the requirements of the various suppliers we transact with.
• Product Quality to be focussed on by Quality Assurance Department.
Understanding customer expectations. Aligning their processes and ways of
working with both stores and supplier’s to ensure our customer’s needs are at
the forefront of their department strategy.
• Customer services department plays a vital role in how our customer
experience is affected, as they are contacted by the customer 85% of time
when a customer is dissatisfied.
3. Execution Strategy:
• Focus on ensuring the equipment required for stores to deal with customer
returns are available.
• Focus on ensuring that our process addresses the needs and expectations of
our customers.
• Understanding how we deal with our customers during their product return’s
transaction impacts the customer service experience and our business.
The above strategies will assist us in achieving our targeted state of improved customer
service and reduce customer returns.
Focus Areas

15. Strategy Alignment
LEADERSHIP ALIGNMENT
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16. Strategy Alignment
Probability
ofChange
Success
Higher
Lower
RESTRAINING
FORCES
(EstimatedStrength)
DRIVINGFORCES
(EstimatedStrength)
CommunicationBudget
Alignment of
departments
Are there strategies in the business case to
address these forces?
Informing
&
cohesion
Financial
Analysis
Stakeholders to
have input in the
desired methods
of comms.
Staff buy-in
Feedback on
challenges raised

17. Strategy Alignment
HOLISTIC ANALYSIS – A SYSTEMS PERSPECTIVE
Areas that are required to change as highlighted in your performance triangle.
Dimension Sub-dimension Strong
/
Weak?
Impact/Effect of weak threads?
Human
Resources
Retention of staff
Morale
Commitment
Employee turnover
Employee development
Staff discipline
HR systems and
processes
Communication
Person-job-fit
Weak Staff not being equipped with the
following knowledge and skills
regarding customer returns:
1. What are the rules?
2. How do I provide customer
service when a customer
wants to return a product?
The above is causing low
morale, no commitment,
employees feeling undeveloped
and frustrated by the process.
This is resulting in bad customer
service, breakdown in
communication & high staff
turnover.
Leadership
Team
Competence to deal with
strategy requirements
Value congruence
Experience
Culture of support (team
and others)
Resilience
Weak The leadership team within
stores and between various
head office departments are all
trying to achieve the strategy
and are operating in silos which
is causing confusion amongst
our staff members. Staff
members are incapable of
ensuring customer needs are
being met as they are too busy
trying to please the various
leaders within their management
structure.

18. Strategy Alignment
Dimension Sub-dimension Strong
/
Weak?
Impact/Effect of weak threads?
Finance Liquidity
Cash flow
Weak Liquidity of our company is being
affected as we pay R 30million
for products and thereafter we
carry the loss on valid returns
from customers. In our S.L.A.
with suppliers we are allowed to
return defect products and
receive a credit on our account.
Marketing Product quality
Product differentiation
Market share
Understanding customer
needs
Customer service
Advertising
Perception of the brand
Market research
Weak House brands has been
identified as the largest
contributing factor to customer
returns which illustrates that our
customer research is lacking to
understand, what exactly our
customer’s needs and
expectations are. Customer
service is therefore being
compromised, due to lack of
understanding. Perception of our
in-house brand is being tainted
by us, hence the quality and
differentiation of our products fail
in the eyes of our customer.

19. Strategy Alignment
Dimension Sub-dimension Strong
/
Weak?
Impact/Effect of weak threads?
Operations Cost of operations
Processes
Equipment
Productivity
Speed and accuracy of
execution
Weak Invalid customer returns adds
cost to the business and is a
direct loss to the stores; affecting
their profitability and ultimately
their incentives. Ineffective
processes is causing employees
to spend too long trying to assist
a customer and impacts
customer service negatively.
Demotivated staff is causing a
decline in productivity levels.
Management
Information
Systems
Quality of information Weak Data is currently available,
however not processed into
information; hence no business
decisions are being based on
the trends from our customer
returns.
Customers Relationships
Perception of our
service/product
Perception of experience
to work with us
Communication
Understanding of our
customers and their
buying behaviour
Weak Lack of signage in our stores to
inform customers about our
returns policy, limited knowledge
of staff and mixed messages
between staff members and
customers; is causing
customer’s to be unsatisfied with
our products and services.

20. Strategy Alignment
Dimension Sub-dimension Strong
/
Weak?
Impact/Effect of weak threads?
Governance Clarity of roles and
responsibilities
Clear lines of reporting
(channel of command)
Compliance (rules,
regulations, laws, policies,
procedures, standards,
etc.)
Weak Store managers, specialists and
general staff have different
interpretations of the Consumer
Protection Act (C.P.A) and in
some cases may leave the
company exposed to major
penalties and fines. Roles and
responsibilities are being ignored
due to a lack of a standardised
process.
Suppliers Speed of problem solving
and decision-making
Quality of service/products
Weak We as a company are absorbing
the cost of customer returns
which are in some cases due to
quality issues and in doing so
suppliers are unware of the
impact this is having on our
consumer.
Logistics and
Supply Chain
Cost effective Weak The duty of C.S.R. department is
to consolidate all customer
returns and expedite these
returns back to our suppliers in
line with our SLA, however
currently we add to the cost of
transportation and we are not
being credited by our suppliers
for valid customer returns.

21. Strategy Alignment
Dimension Sub-dimension Strong
/
Weak?
Impact/Effect of weak threads?
Systems
health
• Complexity of problems
required to solve daily
• Emotional load – dealing
with difficult, demanding
people regularly
• Right person for the job
(person-job fit)
• Opportunities for growth
and development
• Effective communication
• Effectiveness and
Efficiency – doing the
right things and doing it
right the first time.
Weak Due to a lack of knowledge &
understanding, staff are unable
to deal with difficult customers,
service the customer correctly
the first time and are unable to fit
into the job we expect of them.
Structural
dimension
• Equipped with the right
resources
• Supported by effective
and efficient processes
and systems
• Supported by sound
governance
Weak Staff are unable to do basic tests
for customers in store due to a
lack of equipment. They are
afraid that should they test a
faulty product, the possibility of
the store’s power being tripped
is high. Due process can’t be
followed as required by C.P.A.
when declining a customer
return.
Customer
interface
• Fulfilment and support of
customers
• Information and Insight on
our customers
• We know in which areas
we can exceed the
expectation of the
customer and raise the
expectations of our
competitors in the
process
Weak Competitors gain an advantage
over us, as we are unable to
provide customers with the
expected customer service and
disengaged staff are not taking
the time to understand, let alone
service their customer needs.

22. Strategy Alignment
Deductions and Conclusions from the above Analysis:
1. H.R.: The people in our business are competent, however they require training,
process and clear understanding; as the lack thereof is causing bad customer service
and the company strategy to fail. Employee turnover is increasing at an exponential
rate due to unclear directives.
2. Leadership team: We have not equipped our leaders with the knowledge they
require.
3. Finance: The major weakness here is that our business is affected financially by us
not receiving credits for returns generated from defective merchandise.
4. Marketing: Our stores do not have the signage to support and inform customers of
our returns policy.
5. Operations has no process to be followed when dealing with customer returns,
therefore there is no consistency in customer service between our stores.
Management Information Systems: Data is available, unprocessed and therefore
not used in decision making.
6. Customers: Customer confidence is being lost due to the poor customer returns
process in our stores and is impacting on the company’s market share. Knowledge
and understanding of our customers isn’t at the forefront of our business and
contradicts our business values.
7. Governance: Compliance with the C.P.A rules are being applied in some cases by
sheer luck and not consistently throughout the business.
8. Suppliers: Although S.L.A.’s with our suppliers allow us to return defective
merchandise for a full credit. Suppliers are not provided with customer feedback and
as a result they are unable to assist us in improving the products we offer our
customer.
9. Logistics & Supply Chain: Cost inefficiencies (Reverse Logistics Costs) are being
absorbed by us as a result of not processing customer returns constructively.
10. Systems Health: Confusion and frustration of staff in stores is very high when
processing a customer return.
11. Structural Dimension: Stores require circuit breaker multi plugs to test products for
customers and to assist with improved customer service.
12. Customer interface: Management at different levels are applying different rules to
customer returns, resulting in inconsistent customer service levels.
Graphic representation of our change readiness is as follows:

23. Strategy Alignment
STRATEGY TRANSLATION: STAKEHOLDER ANALYSIS
Stakeholder Identification
What do we want from them? What do they want
from us?
Potential to
influence
Importance
Internal
Stores Adherence to process and
improved customer services.
Training,
equipment and
support from all
head office
functions.
High High
Customer
Services
Dept.
Adherence to process and
improved customer services,
which doesn’t contradict with
the store’s customer returns
process.
Training and
support from
operations.
Low High
Centralised
Store
Returns
Dept.
To insure returned products are
transferred back to the
respective suppliers.
SLA with suppliers
to be
communicated to
them.
Low Low
HR Training Availability of staff
from operations
High High
Buyers Understanding of customer’s
needs
Feedback from
operations
regarding customer
needs.
High High
Quality
Assurance
Department
Products to be tested
periodically, to ensure suppliers
receive feedback.
Stores to adhere to
QA process
requirements
High High
External
Suppliers SLA to be adhered to and
product quality to be
maintained as per the agreed
standards
Feedback from
Q.A. dept.
High high

24. Strategy Alignment
From the above one can deduce or conclude the following for our change project:
• Store management needs to be supported and ensure that they have a firm
understanding of the various customer returns situations which may arise, so as to
empower them to manage their business with efficacy.
• HR, QA & suppliers must be collaborated with, on all decisions which may affect
them; as they will influence the success of the project.
• Customer Service dept. has enormous power over how our customer service is
perceived and therefore we require their buy-in, on the processes which impact
customer services.
• C.S.R. department isn’t customer facing and deals with customer returns at the end
of the cycle, hence we will be required to monitor this function periodically.
• Last but not least… “The Customer”: This stakeholder as we are aware has the
highest power and importance, therefore this stake holder is neither internal nor
external but is rather the determining factor to all the other stakeholders in their
business decisions.

25. Strategy Alignment
STRATEGY TRANSLATION: RISK ANALYSIS
Risk analysis:
Risk Description Prob. Imp
Risk
factor
Action-/Management Plan
HR allocating resources
for the training sessions. 6 9 54
We will request that HR provide us with a
reasonable timeline to ensure the training is
ready to go live quickly.
Q.A. department, not
having all the
information submitted in
time to HR, for the
training manuals to be
compiled.
2 7 14
Based on the timeline provided by HR above,
we will request that QA advise if these
timelines are reasonable. However we don’t
foresee resistance as this training will reduce
the amount of invalid queries from stores &
suppliers, to their department.
Operations (Store and
Regional Managers 8 10 80
Absenteeism and business demands could
cause operators to be unavailable for the
training.
New Signage
requirements from
Marketing dept. 1 3 3
Signage delivery timelines will not stop the
change of process, as we intend on printing
the returns policy on the back of the till slips
and train staff to make customers aware of the
returns policy.
Additional equipment -
(availability from
supplier) 4 10 40
The equipment required for the new process
can be supplied by a number of agents and
retail outlets, hence the probability of not
receiving the equipment in due time is very
low.
Probability: 1-3 (Low) 4-6 (medium) 7-10 (High)
Impact: 1-3 (Low) 4-6 (medium) 7-10 (high)
Risk Factor: Probability x Impact

26. Strategy Alignment
Based on the above information, risk management findings are:
From the above one can deduce or conclude the following for our change project (Impact vs.
Probability):
• Operations will require extensive management:
o Attendance will have to be confirmed a week in advance.
o It will be compulsory for a representative to be sent for training, should a
store/regional manager be unavailable and a 1 on 1 session held with them
upon their return.
• Management effort required for H.R.:
o Timelines for the training roll out will have to be negotiated to ensure that staff
are not pulled out of stores during peak trading times.
o Training planned to be approximately half a day for candidates, as this will
reduce costs for both HR and stores and ensure productivity in both areas isn’t
affected drastically.
• Management and Monitoring required to ensure that we are able to distribute the
required equipment in due time.
• Risk level acceptable in the Q.A. department, however this area should be monitored.
• Marketing risks are acceptable and doesn’t require extensive management, feedback
to be provided from the marketing department during the project.

27. Strategy Alignment
CRITICAL SUCCESS FACTORS AND OBJECTIVES
Considerations Critical Success Factors Objectives
Human
Resources
Minimum requirement is that 1 Store
manager, 1 specialist sales associate and
the regional operations manager must be
trained by the end of the training schedule.
To ensure understanding of
the new business process and
to empower all the members
of the leadership team are
able to coach their
subordinates when dealing
with customer returns. In
doing so improve customer
service.
Governance All staff members are to take a 10min. test
on C.P.A. in store within the next 3 months.
This is to ensure that we
understand our customer’s
expectancy of us as a
business and operate ethically
in all our transactions with our
customer.
Marketing Returns policy to be printed on the back of
all till slips within the next 4 weeks.
This will make it easy for our
customer to be informed and
understand our returns policy
in the convenience of their
own time, should need be.
Finance Approval of budget for the additional
equipment and training sessions (new
customer returns process).
Without funds we will be
unable to effect the alignment
of the customer returns policy
to our company strategy.
Equipment All stores must have 1 circuit breaker multi
plug once their training has been
completed. (plan to distribute to store
managers at the training sessions)
Stores will be able to test
customer returns in the
customers presence, so that
the return maybe validated.

28. Strategy Alignment
Hence the 2 most important weak threads are:
1. Customer service
As we are aware customer service perception of Edcon has dropped 25% with
contributing factors such as:
• Customers feel unwelcomed.
• Store staff do not know their products.
• Staff are unfriendly when processing returns.
• Time consuming process to find someone who knows how to execute a return
or alternatively waiting too long for a manager to authorise a return.
Research:
“Customer service expert advice states:
1. Obsess over the beginning and ending of the customer interaction. Because of
how human memory works, you have to get these moments right if you want your
customers to remember their time with you pleasantly.
2. Do the hustle. A perfect product, delivered late, feels like a defect. (And the timeline
for what customers consider “late” is continually getting shorter.)
3. Offload the transactional–in a way that suits your company’s customer service
style. Customers appreciate it when you streamline or automate transactional
details, the things machines can do as well or better than humans.
4. Don’t just be good—be memorably good. If you don’t create a memorable
experience for your customers, your story won’t spread. Customer service is indeed
the new marketing, or at least it is an incredibly powerful support that makes your
marketing resonate by matching it with the truth of your business.
5. Learn to apologize. Things will go wrong. (Things will go right and yet customers
will perceive them to be wrong–it’s the same thing.) Prepare for this, emotionally as
well as operationally.”
Micah Solomon is a customer service consultant and expert, customer experience
consultant, speaker and author.
Source: http://www.forbes.com/sites/micahsolomon/2014/06/05/expert-customer-service-advice-5-top-tips-of-all-
time/

29. Strategy Alignment
“The Zappos Effect: 5 Great Customer Service Ideas for Smaller Businesses
1. Lightning Fast Response
Many large businesses do not reply to customer emails. This sort of response won’t fly in a
customer-focused ecommerce business. Do your best to provide lighting fast responses to
customer questions, comments, or orders.
Many small merchants cannot easily afford a call centre, so they rely on email as the only
means of customer communication. This is fine, as long as you get right back to the
customer. Consider keeping your customer service inbox open all day when you’re sitting at
your desk. When an email comes in, treat it like a fire alarm. Also, after hours, have a means
of monitoring customer service emails from your smartphone.
Define what lighting fast response means in your company — perhaps five minutes or less
— and track your response times. You want to get back to every customer before that
customer starts wondering what’s going on.
2. Never Argue About Returns
Zappos has a 100 percent satisfaction guaranteed return policy. The company will never
fuss about any return. In fact, Zappos actually encourages customers to order several
products, check them out, and return what they don’t want. Here’s a Zappos-produced video
on the company’s return policy.
3. Treat Good Customers Well
Another Zappos customer service tactic that translates well to small online retailers is the
concept of treating loyal or new customers well. Specifically, Zappos often upgrades good
customers to next day or second day air shipping from standard ground shipping. This policy
encourages customers and rewards those customers that frequently shop your store. You
might also consider offering coupons or other bonuses to your best customers.
4. Expect Problems, Be a Solution
Next, expect problems. Remember, you’re selling products via mail, often on images alone.
Lots of things could go wrong, from shipping problems to the customer ordering the wrong
size. Knowing that there will be problems, you should be prepared to handle them when they
come. If a certain type of problem — perhaps packages damaged during shipping or
something similar — be sure to take some action to prevent this sort of problem in the future.
Customers that have had problems and believe they were treated fairly will often be your
most loyal customers in the long run.
5. Treat Customers Like Individuals
Finally, learn to treat every customer like an individual with a unique story, challenge or
problem. Imagine what you would do if a customer called you and said she had forgotten to
pack her favourite pair of shoes.”
March 21, 2011 • Armando Roggio
Source: http://www.practicalecommerce.com/articles/2662-The-Zappos-Effect-5-Great-Customer-Service-Ideas-
for-Smaller-Businesses
Deduction:
Based on the above research it is clear that as a big business we tend to lose sight of the
customer experience and in doing so not only do we lose customers, but we also incur
financial losses simultaneously.

30. Strategy Alignment
Steps to improve customer service:
Training of staff on the companies improved customer returns policy.
Training should entail:
o Understanding of the various products we offer to all staff members. (Expert
knowledge)
o Process to be followed during the returns transaction, to ensure timorous
execution of the return. (efficiently and effectively)
o How to communicate with the customer, to ensure that we treat customers as
people and not transactions.
o Expect a complaint when a customer wants to return a product at our store,
however deal with it as an opportunity to impress the customer.
o Ensure that arguments don’t occur during the return’s transactions.
Stores should have their Returns policy displayed as instructed (addendum a).
Stores are to use the defective tag check list (addendum b) when returning a product,
as this has 2 benefits namely:
o Customers are assured that we understand what to check for and that we can
process their return correctly the first time.
o Allows us as a company to identify quality issues with our products swiftly and
initiates discussions with our suppliers swiftly.
Not only will the above assist with alleviating customer & employee frustration, but also allow
us to turn a customer return transaction into a pleasant customer experience.

31. Strategy Alignment
2. Governance
Currently employees complain that customers walk into stores, to return a product and when
denied, consumers threaten to contact C.P.A hotline; managers then process the return
unwillingly. This illustrates that our store staff do not understand C.P.A. well enough to
provide great customer service while adhering to the customer’s rights in compliance with
the C.P.A.
Research:
“The Consumer Protection Act is here, and if you do not familiarise yourself with it then you
may face the consequences. This month we will start looking at the provisions of the Act and
explain how they affect businesses and individuals.
The starting point in interpreting and applying any Act is to look at the purpose of the Act.
Very few people know that there is already a very well developed system of consumer
protection in our Law. This Act came about because of the ignorance of the consumer
protection laws in the marketplace on the side of both business and consumers. Companies
have escaped liability up until this Act, and now they are all scurrying about to make sure
that they comply. The average consumer now has the power to put big business in its place
and to demand not only quality goods, but also quality service.
The purpose of this Act is to protect all citizens from unethical businesses who bully people
into buying products they do not want or need. If you are an honest trader then you serve the
Act, but you must know what the Act requires of you. With some small adjustments to your
business you will meet the Act’s most serious requirements and avoid unnecessary and
costly litigation.
The purpose of the Consumer Protection Act is to:
• Provide a legal framework
• Reduce the disadvantages of being a consumer
• Promote fair business practices
• Protect against certain defined conduct
• Improve customer awareness
• Promote consumer confidence and responsibility
• Provide for cost-effective and speedy dispute resolution
• Provide a fair system of redress.”
EUGENE BOTHA - SIRDAR LEGAL ASSOCIATE
Source: http://sirdargroup.com/tag/consumer-protection-act/

32. Strategy Alignment
“Corporate governance is most often viewed as both the structure and the relationships
which determine corporate direction and performance. The board of directors is typically
central to corporate governance. Its relationship to the other primary participants, typically
shareholders and management, is critical. Additional participants include employees,
customers, suppliers, and creditors. The corporate governance framework also depends
on the legal, regulatory, institutional and ethical environment of the community. Whereas the
20th century might be viewed as the age of management, the early 21st century is predicted
to be more focused on governance. Both terms address control of corporations but
governance has always required an examination of underlying purpose and legitimacy.”
James McRitchie, 8/1999
Source: http://corpgov.net/library/corporate-governance-defined/
Steps to improve governance:
A module concerning C.P.A. should be included in the training mentioned above.
This module should entail:
o Understanding C.P.A.
o Knowing the rules of C.P.A in relation to the products we sell.
o How to express the C.P.A. rules to the customer without being offensive.
Ensure that from our marketing materials to our products, that all the various
departments are aligned with the requirements of C.P.A.
Departments which need to be aware of their role in C.P.A. are:
o Suppliers - products must be of the required standard.
o Marketing - marketing materials in store has to comply with the C.P.A. rules.
(such as our returns policy)
o Customer services - as this department is our system of redress, which is
required in the rules of C.P.A. “Provide a fair system of redress.”
o Store staff - last but not least, as they are the face of the company, when a
customer walks into our store. Compliance to the C.P.A. is personified on our
sales floor by our store staff.
Based on the above research; the link between our 2 threads is undeniable, namely:
customer service and governance. Corporate governance isn’t just about financials but also
about our customers and employees and “Yes” in South Africa we have the C.P.A to
promote customer confidence in retailers and service providers. This has always been our
aim in the retail industry. C.P.A. isn’t an obstacle but rather a set of rules in the game of
retail which allows us the opportunity to exceed customer expectation.

33. Strategy Alignment
CONCLUSION
Customer service is what defines retail, we can’t afford to have customers returning their
purchases from us on the current scale which we are experiencing, as this could cost us
more dearly than we think.
A proposed project timeline and cash flow analysis, of the change project required to
improve our customer returns policy for Discount Division in Jetmart stores illustrates that
with a minimal investment of R 410,000, we can potentially reduce the cost to the company
by R 3 million conservatively within the first financial year. (Refer to addendums c & d)
In the words of Sam Walton (founder of Walmart):
“There is only one Boss. The Customer. And he can fire everybody in the company
from the chairman on down, simply by spending his money somewhere else.”
Based on the above strategy alignment analysis / exercise: I know that this project will assist
our company’s liquidity, cash flow, profitability and customer service; which will improve the
platform of Edcon in the market place.

34. Strategy Alignment
ADDENDUMS
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35. Strategy Alignment
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36. Strategy Alignment
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