Operations, Strategy and Technology: Pursuing the Competitive Edge - Case Study Example

 Acquisition of Steve and Bary Retailer
The management of Blue Stone should acquire Steve and Barry. An acquisition strategy is beneficial if its outcome is potential sales growth for the parent company. The parent company intends to expand its operations by acquiring this retail stores. An assessment is made on its viability. The price to offer is $163 million.
A competitor analysis reveals that Steve and Bary ranks behind Target retailers and Gap producers. This company is in a debt crisis and in a law suit of the same. The extra outlets that were opened led to its downfall since it could not maintain the loan repayment with the increasing inflation in the days. The low prices being offered is the route cause of reduced profits. Each and every item offered in the store went for less than $10. A comparison with the designer outfit reveals that Steve and Bary sells at $8.98 while a similar casual dress goes for $24.99 at Target and $ 59 at GAP. The intention the retailer had was to be lead in low market prices and huge consumer base. Blue stone partners should aim to increase the price as high as the GAP’s price or even higher.
Sales in 2007 were as high as $1.1 billion an indicator that proper management of the company would be very beneficial to Blue Stone Partners. This was a 20% growth in turnover.
The outstanding loan amount of $200 should be cleared first. This is with the aim of regaining consumer confidence. The jackets and t-shirts were imported should aim to reduce the operation costs per unit. Blue stone can adopt either 32% and 7 % import duty. The tariff rates of the same t-shirt is at zero rates from Mexico compared to 19.7% from china. The average earnings per foot are $38 compared to that of its competitors’ e.g. Aeropostale at $545, Navy at $333. The viability of this project can only be achieved if the cost per unit is increased and some outlets are shut down. The casual designer outfits should be held in stock as well as the college line previously adopted. The Michigan Daily is a key tool for advertising. Blue stone management should aim to regain their trust and clear the outstanding balance of $20,000. The University of Michigan is a vital organ since it is a target market. The manpower resource base stands at 17000 employees. This should be reduced as well as some outlets.
A test market from its competitors reveals that the price per unit offered by Steve and Barry is extremely low to sustain its survival. In light of this I recommend the Blue Stone partners should save the retailer. They should then aim at reducing the number of outlets and lay down some employees to cut back on cost. Lower rates of import duty as well as tariff should be adopted to reduce operational costs. Shipment issues should have proper management to avoid the losses it is incurring to the retailer. Marketing is at the core of business growth hence the Michigan Daily and other advertising media should be utilized fully. The layout design of the stores can also be pimped a bit to attract more customers. Social network marketing technology should be adopted i.e. blogs, podcasts etc. (Robert, 120).
Work cited
Robert Hayes. Operations, strategy, and technology: pursuing the competitive edge, London, Wiley press, 2008. 120 Read More