Assignent
Case 1: "Fashion isn't a luxury, it's a right."
While he still believed that statement to be true, Paul Jones CEO of the Payless Shoe division, knows that much has changed - in the company and in the industry - from those early days in Topeka, Kansas.
The year he started at Payless, 2012, was among the most tumultuous the company had seen. Before he arrived, the Collective Brands Board had fired the former CEO, Matt Rubel and then had dismantled the ‘house of brands' that Rubel built. Given the losses the company had experienced, the decision to split the company in two, had made strategic sense. The Performance + Lifestyle Group, housing the Sperry, Keds, Saucony, and Stride Rite brands, were sold to Wolverine Worldwide. Wolverine was able to pair that acquisition with its current shoe brands including Hush Puppies, Patagonia Footwear and Harley-Davidson Footwear. The Payless and Collective Licensing International groups were taken private by an acquisition company made up of Blum Capital and Golden Gate Capital.
And that was how Jones came to find himself in Topeka almost 5 years ago. Interestingly, or ironically from Jones perspective, many of the same issues that had faced the company a decade ago seemed to linger. Though it is not really any consolation, Jones knows that things over at competitor DSW, Inc. aren't any better. In fact, having just announced the retirement of their former CEO Michael MacDonald effective January 1, 2016 Jones is some ways was glad to still be in his position.
But that was small consolation knowing he was facing a meeting next week with the Blum/Golden Gate brass to talk strategy for the next few years. And that's why he's called you in ... he's seeking your help in conducting some industry research and then brainstorming where the company can (and should) go next. Specifically, he's looking for the answers to these questions:
Copy and Paste the below questions in your write-up and place your answers underneath each question.
Problem Identification - Accurately, clearly, and completely identifies the relevant case specific problem
Problem Identification: The identified problem is .....
Question 1:
Using Payless and DSW, which of the current product mix pricing strategies discussed in the text that apply these retailers today?
Question 2:
How do the concepts of psychological pricing and reference pricing apply to these companies' strategies?
a. In what ways do these companies deviate from these strategies?
Question 3:
What are the benefits of employing these strategies and what are the drawbacks - discuss in detail.
Question 4:
Today, the designer/retailer collaboration has become an established practice. For Payless, what might be 2-3 ways in which Payless might still gain a competitive advantage using this tactic in a new or unique way?
a. What are the strengths and weaknesses of these options?
b. How would these options differentiate Payless from its competitors like DSW?
Question 5:
Which alternative would you recommend to Jones - and why?
a. Identify and defend what you think is their best alternative
b. State the short-term or intended outcome of this plan
c. Discuss the long-term sustainability of this pricing strategy
Case 2
John Mackey and Walter Robb, current Co-CEOs of Whole Foods, both leaned back in their chairs as they sat facing each other. Silent, and deep in their own thoughts, they each reflected back to the "good old days" for Whole Foods - when the company was at the top of the ‘organic grocery game,' could command a premium price for their products, and had no real competition to speak of.
Today however, that is not the case. Kroger, Trader Joes, The Fresh Market - even Walmart for heaven's sake - has become a competitor in the organic arena. In addition, over and above offering brand name organics many of these companies have also moved - or are moving - to create their own private/store-label organic brands. As there continues to be uncertainty with respect to where the economy will really go next, both Mackey and Robb know that they will be facing even more competition from these lower priced alternative products.
That means that there will likely be more pressure than ever - and therefore more scrutiny - placed on their experiment with the new "365 by Whole Foods Market" store concept. The goal of these smaller foot-print stores is to apply some of the lessons they have learned in operating their larger stores, as well as the lessons they have learned by watching the competition. As they reflected today, Mackey and Robb are both wondering in particular about how this new store concept will be received ... since just a few weeks ago, Walmart announced the closure of all of their smaller, experimental Walmart Express stores.
And that's why they've called you in to the Austin headquarters today. They need your help in organizing their thoughts as to not only what the ‘problems' really are - but also what the logical next steps are as a result. Before they fell silent, you had jotted down these questions ...
Copy and Paste the below questions in your write-up and place your answers underneath each question.
Problem Identification - Accurately, clearly, and completely identifies the relevant case specific problem
Problem Identification: The identified problem is .....
1. What exactly is Whole Foods "product" - and does it deliver value to customers?
2. How has the competitive landscape changed in the last decade for Whole Foods - and how have these changes left the company in the position they find themselves in currently?
a. Do the new ‘competitors' in the world of organics pose a true competitive threat to Whole Foods? Explain why or why not?
b. What other trends retailing trends in general are having/have the potential to impact Whole Foods competitive position? Explain.
3. Given the answers to these questions, what - specifically - is the biggest issue the Whole Foods organization has to address?
a. With respect to their targeting and positioning, what challenges will the company face in the future as it continues to grow and expand?
b. How (or can) the company work toward overcoming being known as ‘Whole Paycheck' - due to their premium prices - and find a better balance in their overall marketing mix ... especially in light of the new 365 store concept?
4. Knowing that Mackey especially - as one of the co-founders of the company - is possibly personally close to the situation, what options would you provide to the CEOs to address the issues they face?
a. What are the pros and the cons of each option?
b. How do/would these different options differentiate Whole Foods from its competitors?
5. Which alternative would you recommend - and why?
a. Identify and defend what you think is their best alternative
b. State the short-term or intended outcome of this plan
c. Discuss the long-term sustainability of this pricing strategy
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.