organization [Web Address]

Alpha Inc.
European E-Commerce Expansion

Anthony Francis
President
Alison Croteau
CFO
Jack Eliasch
CEO
Zeynep Dede
COO
November 18, 2014 Alpha Inc. European E-Commerce Expansion 2

Table of Contents
Executive Summary .............................................................................................................. 3
Value Proposition.................................................................................................................. 4
Target Market ......................................................................................................................... 5
Market segmentation ..................................................................................................................... 5
Product Description ............................................................................................................. 6
Keys To Success ................................................................................................................................ 6
Competition ............................................................................................................................. 7
SWOT Analysis........................................................................................................................ 8
Strengths.............................................................................................................................................. 8
Weaknesses ..................................................................................................................................... 10
Opportunities.................................................................................................................................. 11
Threats .............................................................................................................................................. 12
Supply Chain......................................................................................................................... 14
Financials .............................................................................................................................. 14
Management Team ............................................................................................................ 15
Resumes ............................................................................... Error! Bookmark not defined.
Exhibits .................................................................................................................................. 17
November 18, 2014 Alpha Inc. European E-Commerce Expansion 3

Executive Summary
Alpha Inc. plans to function as an external group working to adapt and operate the

Northern European e-commerce website for TJX, as well as manage the

corresponding distribution logistics. This will assist with the expansion of the

online department in the specified parts of Europe. We plan to provide the online

TJX shopping opportunity to consumers in the Netherlands, Sweden, Denmark,

Norway and Finland.

Our Target Market is comprised of the populations in the five European countries

specified that are aged between 18-79 with incomes ranging from 24,000 to 1

million a year and who shop online. Therefore the size of our Target Market is

18.8 Million people. Our reachable Target Market consists of the 7.5 Million

People who shop online specifically for apparel.

We propose that TJX exploit the Northern European e-commerce market due to

the market potential that these countries possess. First, these countries have the

highest volumes of internet shopping in Europe whilst also maintaining the

highest standards of living in the region. Our company will also stay true to the

TJX business plan of lean inventories and strong vendor relationships.

Alpha Inc. plans to assist in the expansion of the e-Commerce portion of the

company by creating a TJX website that will target a select number of European

countries whilst utilizing the TJX distribution center held in Bergen, Germany. By
November 18, 2014 Alpha Inc. European E-Commerce Expansion 4

having a European base in Germany that has easy access to shipping in Northern

Europe, cost will be kept low for both the TJX Corporation and TJX Customers.

TJXs major competition in the Ecommerce space is comprised of Zalando and

Asos. Zalando SE is an e-commerce company that sells clothing and lifestyle

products online. Zalando is particularly similar to TJX in that they are an off-price

retailer.

Value Proposition
TJX is a superior company to its competitors, Zalando and Asos, and if our

business plan is executed effectively in Europe, their goal of becoming a $40

billion company can be realized.

However, every second that TJX spends outside of the Northern European

Ecommerce market, they are losing market share and market exposure as well as

potential profits which does not help them reach their ultimate goal. This is why

TJX needs to act quickly. We propose that TJX exploit these markets in the

specified countries due to the market potential that these countries possess. As

previously mentioned, these countries have the highest volumes of internet

shopping in Europe while also maintaining some of the highest standards of living

in the world. As a result we plan to carry out the management of the TJX

Ecommerce website close to an already existing TJX distribution base in Bergen,

Germany.
November 18, 2014 Alpha Inc. European E-Commerce Expansion 5

In order to maintain TJX-quality relationships with both vendors and buyers, we

plan to invest great time in fashion conferences such as Premiere Vision and

ModAmont in Paris and Bread & Butter in Germany. Participating in these

conferences will help us to identify current fashion trends. Such conferences will

provide us with a stepping-stone to building networks and relationships with

vendors. Furthermore we also plan to utilize the OFFPRICE convention that is

held in the UK that TJX also uses in the US in order to grow and cultivate both

our own relationships and TJXs relationships with vendors and thus stay true to

the value proposition policy held by TJX.

Target Market

Market segmentation
Our target market is comprised of the populations in the five European countries

specified that are aged between 18-79 with incomes ranging from 24,000 to 1

million a year and who shop online. Therefore the size of our target market is 18.8

Million people. However, our reachable target market consists of the 7.5 million

people who shop online specifically for apparel. We believe TJX can reach this

number of people as a result of TJXs off-price business model. The success

enjoyed by the German-based company Zalando exemplifies how such a model

could be very profitable for TJX should they decide to enter this market.
November 18, 2014 Alpha Inc. European E-Commerce Expansion 6

Product Description
Alpha Inc. plans to assist in the expansion of the e-Commerce portion of the

company by creating a TJX website that will target a select number of European

countries while also utilizing the TJX distribution center held in Bergen, Germany

that will help reduce the price of shipping to those countries and increase TJX

market share. We want to stay true to the TJX business plan by keeping a lean

inventory distribution center in the heart of European transportation. By having a

European base in Germany that has easy access to shipping in Northern Europe,

costs will be kept low for both the TJX Corporation and TJX Customers.

Currently, TJXs European market share is very limited. There are brick and

mortar stores in the United Kingdom, Germany and Poland, but they have yet to

fully utilized the Ecommerce market there. What Alpha Inc. is hoping to do is

expand TJX sales to Denmark, Finland, Netherlands, Norway, and Sweden via an

online website. Building brick-and-mortar stores is time-consuming, costly and

out-dated while Internet shopping is rapidly becoming more cost effective and

popular by the day. We want TJX to continue its tradition of being a market

leader in retail by breaking into northern European online sales.

Keys To Success
The key to success for our proposal is based upon the effective adaptation of

distribution and Ecommerce to deal with more goods and more orders. The quick
November 18, 2014 Alpha Inc. European E-Commerce Expansion 7

adaptation of the TKMaxx website to the specified countries is integral in order to

then deal with the expected higher volume of users.

Competition
Furthermore, TJXs major competition in the Ecommerce space is comprised of

Zalando and Asos. Zalando SE is an e-commerce company similar to TJX that

sells off-price clothing and lifestyle products online. The company was founded in

Germany in 2008 and since then it has expanded to a total of fourteen countries.

Currently, the company is operating in Germany, Austria, Switzerland, France,

Belgium, the Netherlands, Italy, Spain, Poland, Sweden, Denmark, Finland,

Norway and the UK. One year after launching in 2009, Zalando began operating

abroad by expanding to Austria. By 2013, the company had begun operating in

fourteen countries. Last year, the company had a turnover of 1.8 billion Euros.

Similarly Asos is another company that is in competition with TJX. ASOS.com is

a British online clothing and beauty store, aimed primarily at young adults. The

company has two distribution centers in the UK and ships to over 237 countries.

The company launched in 2000 and opened their first international office in

Sydney, Australia in 2012. In the final quarter of 2012, ASOS launched three

international stores and international sales increased by 142% during the 2010

financial year. Their total revenue was 753.8 million pounds (2013) while their

net profit was 29 million pounds.

November 18, 2014 Alpha Inc. European E-Commerce Expansion 8

The success enjoyed by these off-price online retailers goes to show that there is

not only demand for off-price retail in the Ecommerce realm in Europe but that

there is much room for growth within the European market. With TJXs financial

strength and high credit rating as well as the resurgence of the European

economies, the possibilities for expansion and overall success for TJX in Europe

are high when compared to Zalando and especially high when the predominant

source of their $32 billion revenue is in the US. Should TJX expand to the

European markets aggressively, their goal of being a $40 billion company can

surely be not only reached but surpassed.

SWOT Analysis

Strengths
Our planned distribution center is one already used by TJX in Germany, which

makes it easy and cheap to transport goods across Northern Europe. Access to the

TJX distribution center that already exists in the country will omit the cost of

spending copious amounts of money on a new center. This will help to maintain

TJXs image of always having the lowest priced products. The workforce in

Germany is also highly skilled, which prompted us to decide to take all necessary

employees from the local workforce there. The literacy rate is 99% and the

German people have extremely high scores on TOEFL English proficiency tests.

This will make communicating with operation managers easier and ease TJXs
November 18, 2014 Alpha Inc. European E-Commerce Expansion 9

introduction into the Northern European market. Labor costs in Germany are

relatively low when compared to other countries in Europe that have a similarly

skilled work force such as Sweden and Poland. Germany is also politically and

economically strong which omits it from most of the austerity troubles other

European nations are facing and makes it a safe market to enter.

The TJX Corporation itself would face both difficulties and merits when entering

the European online sales market in the Nordic region. The strengths and

opportunities presented by this expansion outweigh the weaknesses and threats to

the business, which makes this project much more attractive and beneficial for

TJXs business.

Strengths
In terms of the strengths that the corporation will take on when beginning this

expansion, several come to mind. Using the currently held distribution site in

Germany has multiple benefits: the cost of labor is relatively low in the country

allowing TJX to easily hire any necessary workers to manage distribution at a

reasonable cost to them. Also, various branches of the TJX Corporation have

already been present in the European market for a few years, so they do have

quite a bit of experience there already. Due to this, they already have connections
November 18, 2014 Alpha Inc. European E-Commerce Expansion 10

with European retailers who could potentially also partner with them in this

particular endeavor as suppliers for the website inventory.

Weaknesses
Both Germany and the countries that the online store will ship to have relatively

high VAT rates and tax rates in general. Although VAT would not have to be

applied to the actual goods because most of the items are not made in the

respective countries; therefore an additional cost might have to be added for the

service of shipping those goods as well as VAT and duties.

Though the potential weaknesses do not compare to the benefits of corporate

expansion in the online sales department, they are worth examination. The most

important weaknesses that TJX would certainly face during the expansion process

are the initial start-up costs. Like in any business it is inevitably expensive to hire

new workers such as website developers and warehouse workers in order to adapt

to the increased size of the current TK Maxx website and the increased volume of

goods arriving into the distribution center. Unfortunately, these costs can be

especially high when the business begins to expand internationally.

Another issue is the high cost of shipping to other countries outside of Germany.

This expansion process involves shipping to Denmark, Finland, Norway, and

Sweden. These countries all maintain high VAT rates and high rates on Customs
November 18, 2014 Alpha Inc. European E-Commerce Expansion 11

Duties. Our company has attempted to make the cost of delivery of TJX goods

cheaper by shipping from the current distribution center held in Germany, which

would eliminate the cost of leasing a new distribution center and employing more

workers to operate the distribution center. It is also in a prime geographical

location for shipping to the select countries.

Opportunities
The current placement of the distribution center in Germany provides many

expansion opportunities in itself. These opportunities extend beyond our proposal

to begin expansion to the Netherlands, Finland, Denmark, Norway, and Sweden.

This preliminary expansion could eventually lead to TJX e-commerce spread

across the rest of Europe. Germany is in relatively close proximity to Belgium,

Luxembourg, Spain and Switzerland; all markets that could make TJX successful.

In addition to fluency in German, many German people are proficient in either

Danish or English. Also with the countrys commitment to maintaining a high-

functioning infrastructure and economic efficiency, there will be less risk of late

transportation which maintains the On Time policy of distribution for TJX

goods. Trading will also be easier should TJX choose to expand because most of

the countries in Western Europe are a part of the European Union, which will

make trading favorable to our location in Germany.

November 18, 2014 Alpha Inc. European E-Commerce Expansion 12

Branching into a new market also entails a plethora of new opportunities for TJX.

The corporation will have the opportunity to partner with different retailers to

create a new inventory of items to sell that are catered to the trends and desires of

the respective countries. Also, the Nordic countries that we will be dealing will

are known for having extremely high standards of living and subsequently high

average incomes. In fact, all of the countries that we are targeting are on the list of

the top 15 countries with the highest standard of living with Germany at number

5, Sweden at number 2, Norway at number 4, Denmark at number 7, the

Netherlands at number 8, and Finland at number 12, according to Business

Insider. In terms of average household disposable income, each country ranks

highly: Germany with $24,623, Sweden with $26,242, Norway with $31,459,

Denmark with $24,682, the Netherlands with $25,493, and Finland with $25,739.

This shows that consumers in the northern European market will have more

money to spend and possibly have higher-end taste in items. For example, in

Sweden the average price of jeans sold is 115. This allows TJX to sell more

expensive products and apparel that have higher mark-ups on the website. This

also means that inventory would be turned over less, which would therefore make

the E-commerce site more sustainable and attractive to consumers because they

are then able to find the goods they originally liked consistently.

Threats
November 18, 2014 Alpha Inc. European E-Commerce Expansion 13

A prevalent threat is the competition in the Nordic region. There is realistically

only one major force in this area that could potentially rival TJX and that is

Zalando. Zalando is similar in concept in that they offer name-brand products and

apparel at discounted prices. However, TJX already has experience in the

European market with stores in other areas of the continent. This matched with

their far greater experience as an off-price retailer in general would allow them to

excel in the market and potentially beat out Zalando and other smaller-scale

competitors. So, the competition serves as both a threat and a major opportunity

for business success. In any startup or expansion project, a company inevitably

endures both successes and difficulties. In terms of this expansion project for

TJX, the merits outweigh many of the challenges, and many of the challenges can

also be diminished.

Furthermore, Germany has a stable economic future. However, other countries in

the European Union are having economic troubles and their governments are

drastically cutting spending as a result. Alpha Inc. is a new company with

minimal experience in European markets, so there is the same risk with any other

company that things could not go as planned. Similarly, should a recession occur,

website sales would certainly decrease and workers in the distribution center

would be put at risk for being laid-off and having their wages cut. Though an
November 18, 2014 Alpha Inc. European E-Commerce Expansion 14

economic crash is always possible, there is a low risk potential for one at this

moment in time.

Supply Chain

Our supply chain will begin with the shipment of supply by TJX Buyers to Alpha

Inc. Once the products arrive in the distribution center in Germany, they will be

sorted and placed in the in sections. When an order is placed online, Alpha Inc.

will organize for the items to be packaged and sent on a on the soonest possible

working day. For the final phase of the supply chain, DHL will pick up the items

from the distribution center and ship them to the customers in the designated

countries.

Financials

In order to create the foundation of our financials, we analyzed the financial

history of one of TJXs main competitors in Northern Europe, Zalando. We scaled

Zalandos financial information for their first three years in operation to

accommodate the number of countries that we will presumably be working with.

Our financial statement was also partly based on TJXs financial success in the

European market in the past. In terms of how we would like to be paid by TJX,
November 18, 2014 Alpha Inc. European E-Commerce Expansion 15

we will ask to take 5 percent of the profit accumulated from all sales in these

designated countries. This is a more reasonable approach than simply asking for a

flat rate payment each year because the profit from these sales will presumably

grow each year allowing the profit distribution between TJX and Alpha Inc. to be

proportional.

Management Team

Jack Eliasch, CEO- Our chief executive officer, Jack Eliasch, will have the

responsibility of hiring the other members of the management team. The CEO

also sets goals for Alpha Inc. and oversees each project. Mr. Eliasch will be

overseeing the partnership and will help in assisting relations between Alpha Inc.

and the TJX Companies.

Zeynep Dede, COO- Our chief operations officer, Zeynep Dede, will be in charge

of the products shipping to and from the distribution center. Mrs. Dede will be

working closely with TJXs buyers and making sure all of the shipments arrive at

and depart the distribution center efficiently. She will also make sure all of the

product orders purchased by online customers are shipped on time and with care.
November 18, 2014 Alpha Inc. European E-Commerce Expansion 16

Alison Croteau, CFO- Our chief financial officer, Alison Croteau, will be in

charge of budget and financing strategies. Mrs. Croteau will manage Alpha Incs

expenses and make sure the correct amount of money will be allocated to each

department ensuring financial prosperity. She will also deal with payments from

the TJX Company.

Anthony Francis, President- Our President, Anthony Francis, will oversee staff

functions, human resources, finance and strategy. Mr. Francis will be responsible

for implementing Alpha Incs and TJXs partnered vision. He will also be

responsible for making sure everyone in the company knows the TJX vision so

that our partnership will be completely devoted to helping their corporation reach

their $40 billion goal.

November 18, 2014 Alpha Inc. European E-Commerce Expansion 17

Exhibits
November 18, 2014 Alpha Inc. European E-Commerce Expansion 18

Supply Chain

Distribution
TJX Buyers Center in DHL Customers
Germany