Planning For A Miracle On 34th Street

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  1. 1. CASE STUDY 4 PLANNING FOR A MIRACLE ON 34TH STREET SUBMITTED TO, SUBMITTED BY, PROF. ABHILASH G N NIVIN VINOI P14199 PGDM-B
  2. 2. EXECUTIVE SUMMARY The case deals with the restructuring of R.H Macy, a multi branded fashion retail store which was facing major crisis due to poor cost controls, customer service, computer systems, type and price of itsmerchandise andhow they recovered this critical condition under two co-CEOs by strategically long term planning. (Word Count: 50) Macy was facing a lot of problemslike outdated equipments, mounting depts, cost perception etc. To revamp companys image the two CEOs where appointed. One to fix the finance department and other to maintain companys image and revamp its product line. They realized planning and strategy should go hand in hand. So rather than looking for a sudden hike they planned for a sustainable and long term plan. All there plan was realistic and flexible. PLANNING MODE They have a Conservative Planning. They want to carry Macy out of the red and back into the black. So they designed a five year plan hoping to get ten percent sales growth and margins improving two points. They planned first to get out from the debts and then concentrate on increasing sales. STRATEGIC MODE The CEOs implemented a new system referred to as Buyer- Planner-Store (BPS). Until that time various roles like merchandising, delivery, planning etc. are done by a single
  3. 3. person. But Macy changed that concept. A single guy was put for handling each group. For attracting cost conscious customers they replaced high priced, glitzy product line to more moderately priced line. When questions were asked about the downscaling they responded by saying It is a price point and not fashion statement. Thus well-made, stylish brand like Levi Strauss where introduced again. For improvingcustomer service and store layout theyinstalled satellite network to connect suppliers with sales people. It helped them in coordinating products inside store and attracting customers by displayingit in proper places. If there is a high demand for a particular product, the dealer or supplier will inform the store and according to the current trend they willproducemore andsupplyit to the dealers. Thus the new technology was utilized by them for buildingprofit. It also helped the executives of the company to talk directly to their employees about issues and concerns. The competitionintextile fieldwas very tough, so Macy hasto thinkoutof boxto competein the market. So forgetting a step aheadof all other competitors they launcheda 24 hours cable TV channel, naming TV Macys which became the most profitable and successful portion of the CEOs plan. Before introducing this plan the only scope was through newspapers or advertisements. So it was a limited exposure. Macys rivals also used one or two hours spot for promoting there brands. But it was first time that a 24 hour channel was launched. All these 24 hours they show about there own private-label
  4. 4. apparel, housewares, and other items. Through this there scope became exclusive. Thus they succeeded in this textile field and there by rapidly increasing profit. (Word Count: 450)

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