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Saks fifth avenue strategic anyalsis

senior integrated assessment
by

Edward Knueppel

on 30 April 2013

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Transcript of Saks fifth avenue strategic anyalsis

Saks Incorporated Profile Luxury retailer
Incorporated in 1919
Offer a wide assortment of distinctive fashion apparel, shoes, accessories, jewelry, cosmetics, and gifts
Upscale regional malls
Saks Fifth Avenue brick and mortar stores, “OFF 5th”, and online/catalog General External Environment Political/Legal
Employee legal issues, non-exempt employees not being paid correct overtime wages
Global
43 stores throughout the United States
Operate 5 international stores
Almaty, Kazakhstan; Mexico City, Mexico; Riyadh, Saudi Arabia; Manama, Bahrain; and Dubai, United Arab Emirates. General External Environment Technological
Continually upgrade information systems
Advanced robotics to receive and fulfill online orders
Mobile device applications
Wifi throughout stores
iPad’s located in stores to browse merchandise General External Environment Demographic
Middle to upper income individuals
Upscale shopping malls
Position themselves in geographic areas with higher income rates Economic
“Poor economic conditions have affected and may continue to affect consumer spending which has harmed and may continue to harm our business.”
Discretionary items
Consumer spending and limited purchases General External Environment Porter’s Forces
Threat of New Entrants/Barriers to Entry
Research shows it is nearly impossible to become a retail store such as Saks
Well-known branded name
Barriers not impossible, yet, need to be able to establish contracts and be competitive
Saks supply contracts Industry Analysis Porter’s Forces
Intensity of Rivalry Among Competitors
Fast cycle, always ahead on the trends
Only retailers with luxury items
Neiman Marcus, Bloomingdales, Lord & Taylor and Barney’s
Product Substitutes
Retailer offering unique products and superior service
Will always have a substitute product to stay trending Industry Analysis Porter’s Forces
Suppliers
carry luxury merchandise from both core vendors and new and emerging designers, including products that are exclusively offered at Saks
Giorgio Armani, Oscar de la Renta, Dolce and Gabbana, Chanel, Gucci, Prada, Louis Vuitton, Burberry, just a few
Buyers
Consumers that have the finances to afford luxury items
“OFF 5th” opening up to a new market Industry Analysis Neiman Marcus
Bloomingdale’s
Lord and Taylor
Barney’s

Bloomingdale’s in closest competition
Saks in best competitive and financial position Competitive Environment Analysis Luxury products
Unable to get anywhere else besides the designer themselves
Financial stability
Thrive in the market, well past their competitors
Technology
Business activities and heightened customer experience
Reputation Internal Analysis: Key Result Area Business Level
Focused Differentiation
Non-standardized product, high end luxury designer items, fashion trends, technology
differentiation is driven by their quality, service, specialty products, and luxury
Competitive Strategy
Fast Cycle
Innovative with constant trends
Stay up to date with suppliers newest fashion
Imitation quick and expensive Internal Analysis: Strategies Corporate Level
Differentiation
Provide an experience for customers
Moderate to high level of diversification
clothing, shoes, accessories, home goods, bedding, furniture, beauty products, and jewelry
Related Constrained
Less than 70% of revenue coming from a dominant business
All stores share same technological and distribution linkages
Cooperative M-Form
Market Development Internal Analysis: Strategies International
Multi-domestic Strategy
Try to tailor products to meet market they are selling in
Sells to any country through online sales
Stores in United States, Kazakhstan, Mexico, Saudi Arabia, Bahrain, and United Arab Emirates
Example: Kazakhstan, not as much fashion forward clothing as the New York location Internal Analysis: Strategies Core Competencies Tangible
High quality products make Saks a desirable place to shop
Financial
Saks is stable, showing little financial improvement from 2010 to 2013
Physical
Only 43 stores in U.S.
website lacking quality customer service
pricing online and in store does not always match
Excellent in store customer service
Offer online shopping
Have outlet stores for the less affluent Human
Quality, knowledgeable, professional sales team
Pay based on commission
High employee turnover
Innovation
Perfectly designed displays and product layout
Keep up on latest fashions and trends
Support social causes
Have green initiative “reduce, reuse, and recycle” Core Competencies Reputation
High quality, high end store
Carry the best products
Mostly cater to women, but some men items
Brand loyalty
Very strong brand loyalty
Status symbol
Appeal to mostly affluent people Core Competencies Operations
43 stores in U.S. and 5 abroad
3 main distribution facilities
Share resources and knowledge among their stores
3 main departments for merchandizing, promotion, and store operating support
Marketing and sales
Latest fashion trends and most sought after designers
Promote their image of luxury
Offer special store events that often benefit a charity Capabilities Service
deliver distinctive, personalized, and memorable shopping experiences
Knowledgeable associates in a warm welcoming environment
Personalized thank you notes for customers
Offer personal shopping service “the fifth avenue club”
HR
Have many awards for everything ranging from business operations to corporate governance Capabilities Technology
Continually upgrade their information systems to stay new and cutting edge
Advanced robotics systems for fulfilling orders Capabilities Have code of ethics in place with set rules and guidelines
Have their own internal audits (even financial)
Website offers all documentation for their corporate governance policies and procedures
listing the entire board of directors and all their attributes.
Adds transparency within the company Corporate governance Meagan McRoberts, Preston Balavage, Karina Sanchez, Edward Knueppel Control: Strategic
Emphasized by Saks corporate-level strategy.
Structure: Multidivisional
Related constrained Cooperative Form
Support cooperation and sharing of resources.
Economies of scope.
Culture inspires sharing.
Centralized decision making. Control and Structure Effective Strategic Leaders:
Inspire and enable others to do excellent work & realize potential.
Promote and nurture innovation.
Sustain an effective organizational culture.
Emphasize ethical practices. Strategic Leadership Performance Appraisal Performance Appraisal Performance Appraisal Performance Appraisal No In-House Innovation
Carry Latest Trends
Fashion Shows
Wide Variety of Products Innovation Strengths Weaknesses Opportunities Threats Brand name
offer high quality products
have a variety of collections
expert service
support social issues
several locations abroad
outlet stores
online shopping only 43 stores in the U.S.
High employee turnover
outlets could devalue brand
do not hold large share of retail market
mostly cater to women Move into growing foreign market
offer more designer lines
expand their online shopping presence
provide more service for men
open more outlet locations Weak economy, expensive products
other retailers offering similar products
manufacturing costs on the rise
customers can shop directly from designers website
unstable global markets
knock off goods sold for far less S.W.O.T Mission
“At Saks Fifth Avenue, we promise a distinctive service experience and product offering that will enable each customer to look and feel their best.”
Proposed Vision
At Saks Fifth Avenue, we strive to provide the highest quality, up-to-date clothing and related accessories to our customers. We focus on honest and ethical practices regarding our customers, partners, investors and suppliers while delivering the overall ‘Saks Experience’. We listen to, understand, anticipate, and act on our customer’s needs in order to better their experience each and every day, while placing care and attention to all aspects of our business. Strategic Intent Increase International Presence
Focus on Established Countries
Western Europe
Possible Developing Countries
Feasibility Study Strategic Formulation & Implementation Decrease Employee Turnover
Salary Plus Commission Pay System
Improve Selection Process
Fashion Savvy Employees
People Looking to Advance Strategic Formulation & Implementation Offer More Products to Men
Men Demand Luxury Products
Source of Competitive Advantage
Market Study
Positive Results  Expand Men’s Lines
Negative Results  Do not Undertake Strategic Implementation & Formulation Questions?
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