Ghurka was a 38-year-old luxury leather goods brand that specialized in leather and twill luggage, handbags, and accessories. Brightwork Brand Holdings Corp. acquired it as an asset purchase in 2011. Ghurka, under CEO John Reuter, worked to re-launch the brand with a ten-year, three-phase growth plan. The company aimed to be profitable by 2016. Management worked to address challenges surrounding the role of wholesaling, Ghurka's advertising strategy, and leather sourcing issues.
In January 2012, H-E-B Grocery Co., a private retail chain with stores located in Texas and Mexico, was introducing its Healthy at H-E-B program to its customers. The program, which started with the company's employees a few years earlier, was an effort to educate and inform customers on how to lead a healthier lifestyle. What CEO Craig Boyan had in mind was creating a state-wide healthy living movement in Texas, where obesity was high relative to other states in the U.S. But how far to go with its employees and customers was a question that President and COO Craig Boyan and his team struggled with. On one hand Boyan believed that H-E-B, long recognized for its community involvement, had a role to play in Texans' health and well-being. On the other hand, he recognized that H-E-B was first and foremost a retailer that had to compete against the likes of Walmart. He needed to make sure that H-E-B was serving its customers what they wanted while also trying to influence their buying behavior toward healthier foods. Some would say that H-E-B had no role in changing the lifestyle and food choices of its employees or customers. But Boyan and his team thought differently.
In mid-2003, CEO Chris McCormick felt L.L. Bean was in a good position to begin to grow again. For nearly 90 years, the company sold clothing and gear for outdoor enthusiasts through its catalogs and a single retail store in Freeport, Maine. In the three decades prior to 1996, sales growth averaged nearly 20% per year. In 1995, sales hit $1 billion, but stagnated for the next six years--growing at less than 2% annually. The company responded with a structural reorganization and investment in its Internet sales channel. In 2002 and early 2003, McCormick led an effort to reduce overhead and improve its internal systems, including the elimination of 1,000 jobs--which reduced year-round headcount by nearly 15%. After these initiatives, the company remained profitable and enjoyed a strong balance sheet, but sales growth remained near zero. Most significantly, between 2000 and 2002, L.L. Bean opened three retail stores in shopping malls outside Maine. McCormick viewed these three stores as the first of a chain of stores that would form a new selling channel and enable L.L. Bean to grow. Early results from the three new stores were below expectations; L.L. Bean spent significant time examining its retail store activities in an attempt to learn where it could improve. As the company began to apply those lessons in the stores, performance picked up, fueling McCormick's optimism that L.L. Bean could grow with retail stores.
The founders and proprietors of a successful 23-year old women's apparel store are facing a critical issue. Can they grow by adding a second store that will not compete with their existing operation? If so, where should it be located, what managerial changes are required to make the second store successful, and how can it be funded without putting at risk the financial stability of the existing business?
Starting in 1988, the Appalachian Mountain Club (AMC) began a controversial transformation in management and governance. For its first 112 years, the AMC's structure had resembled that of a country club--volunteer leaders directed the club's operations and its small, paid staff. However, with the club slowly sinking in debt and operations spinning increasingly out of control, a group of members persuaded the membership to take the governing, volunteer council out of the direct management of the organization, hire a new executive director as CEO, and institute a "corporate-style" board of directors charged with policy and oversight. During the next six years, the revamped AMC sprang back to life. The board and the executive director instituted new budgeting procedures, initiated marketing programs, and hired more professionally-trained staff that helped erase the debt, double the membership, and triple the endowment. However, challenges remained. At the end of 1996, the reorganized board experienced a generational transition in leadership as the terms of the last of the directors who had been present during earlier transition expired. This transition provided a good milestone from which to assess the board's role within the organization and its relationship with the expanded staff and membership.
Catalina Marketing is a very successful marketing service firm. Their current customers include major supermarket retailers and consumer products manufacturers nation-wide. Catalina provides a unique way for these clients to distribute coupons for their products via point-of-sale technology at the supermarket register. Catalina is currently trying to decide where and how to expand its operations.
The two crucial responsibilities of corporate boards--oversight of long-term company strategy and the selection, evaluation, and compensation of top management--were not well met during the 1980s. There should not be government reform of board practices, but the size of boards should be limited and the number of outside directors on them should be increased. Three insiders belong on a board: the CEO, the COO, and the CFO. There should also be reform in the functioning and responsibilities of audit, compensation, and nominating committees. On a revitalized board, directors have enough confidence in the process to challenge one another, as well as the CEO. A group of experts, including CEOs, consultants, and institutional investors, propose specific strategies to help strengthen corporate boards. Some argue for appointing more independent outside directors. Others focus on improving shareholder/management relations. Suggestions for immediate action include board-member retreats, annual CEO evaluations, regular meetings with institutional shareholders, and the general admonition that directors must start asking more difficult questions.
Discusses a well-known traditional department store that confronts a very difficult issue of whether to change its pricing policy from a high-low to an everyday pricing approach. Demands that the student formulate a plan of execution for changing the pricing, if needed.
Describes a new entry into the $8 billion flower industry in the United States. Combining the use of overnight air freight (Federal Express), information technology, an 800 number, and a catalog, Calyx & Corolla was changing the way flowers had traditionally been distributed, bypassing three layers of distribution, and providing very fresh flowers directly from the growers to consumers. Frames the question of how this start-up venture should grow.
Concerns the pioneering use of a method of accounting in retailing which takes into account not only sales and the cost of goods sold but, at the item level, all of the variable costs associated with each item that is sold. Focuses on the strengths and weaknesses of Hannaford's use of Direct Product Profit and the opportunities and obstacles in the way of the improvement and extension of the Direct Product Profit system.
Describes the entry of this store and catalog retailer of classic women's clothing into the Japanese market place. Introduces such issues as cross-border management, multi-national retailing, and joint venturing.
Lowe's chain of 306 stores was anticipating fierce competition from their major market rival, Home Depot. As they reformulated the size of their new prototype stores and the mix of their merchandise, what would be the ultimate format? What impact would it have on their advertising strategy? How could they retain their contractor business which had been the mainstay of their operation since the 1950s. In addition, how should they emphasize in their advertising: wide selection, good service, and everyday attractive prices.
Over the last decade, power in the retailing of packaged goods has shifted from manufacturers to wholesalers and sellers. One result has been an increase in consumer and trade promotion. But many trade promotion practices are costly to manufacturers, retailers, and eventually consumers. The authors single out forward buying in the grocery trade and offer evidence of the costs of this practice to the distribution system as a whole. They suggest a policy called "everyday low purchase price", designed to smooth the peaks and valleys of demand and reduce the costs of distribution.
Describes the means by which management has empowered the sales clerks and part time employees of this chain of 131 department stores. They are responsible for all sales and inventory management. This empowerment has led to fewer stockouts, higher sales, lower inventory levels, less inventory loss, higher profits, higher quality, and higher commitment levels on the part of employees. Also describes how their innovative management has overcome inefficiencies in the Japanese distribution system.