The Analysis of Chinese Department Stores with the Fierce Competition of Online Stores

In: Business and Management

Submitted By RayAsuka
Words 13438
Pages 54
The analysis of Chinese department stores with the fierce competition of online stores

-A case study of Wanda department stores

Word Count: 9850

Executive Summary
Chinese department stores have suffered from the strong competition of online stores in recent years, Wanda department stores in particular. A significant 56 Wanda department stores was collapsed in 2015. Jack Ma even predicted that traditional brick-and-mortar sector will be replaced by the online stores. This research intends to first help Wanda department stores to identify the influences of online stores. Then, based on the successful development experience of British department stores industry, the feasibility of creating own-brand to help Wanda department stores to reduce the influences of online stores will be analyzed. This research finds three influences of online stores to Wanda department stores which is the objective one. First is the elicitation of homogenous issues of Wanda department stores. Second one is the low consumer switching cost to shop online. Third come to the high utilitarian value of online stores. From the findings of objective two, it is possible for Wanda department stores to create their own-brands, and own-brand product can reduce those three online influences identified in objective one. Wanda department stores can differentiate themselves and get ride of homogenous issues with the existence of competitive own-brand products. Besides, if Wanda department stores establish own-brands, Wanda department stores can provide greater financial switching cost since they control the price and products, and greater relational switching cost because they can control front-line sellers and take measures to reduce the turnover rate of those sellers which would in turn create better relationship with consumers. In addition, after creating own-brands, Wanda department stores can…...

Similar Documents

Norton's Department Store

...Norton’s Department Stores Case Table of Contents Executive Summary3 Introduction3 Case Findings4 Evaluations of Alternative Solutions5 Conclusion7 Recommended Plan of Action8 Evaluation of Recommended Solution9 References10 Appendices10 Executive Summary The Norton's chain of department stores has a long and tumultuous history, characterized by their early rise as an industry stalwart in the early twentieth century, to their current state on the brink of bankruptcy. The factors that coalesced to their fall from grace are numerous in nature. Yet one singular factor constantly resurfaces: the mismanagement of the firm stemming from the authority from birth-right exercised. Whatever course of action is taken; whether it is downsizing current locations, creating an e-commerce marketplace, or creating a new pricing strategy, one thing is clear: the main problem of management needs to be addressed first. Introduction Norton’s Department Stores was founded in 1869 by Thomas Norton, in a less than desirable area of Toronto. Since it humble inception, Norton’s have been instilled with certain characteristics conducive to success: “long hours, high quality, and friendly staff (Das, 2005)”. Norton’s has always been a private firm, run exclusively by the Norton family. In its early history, Norton’s experienced exponential growth and came to be known around Canada as a “dependable and customer-friendly merchandising empire (Das, 2005)”. At its height, the firm......

Words: 2741 - Pages: 11

Virtual Online Store

...Virtual Online Store i. The Virtual Online Store is a revolutionary way to shop online that allows customers to interact with an AI store clerk in a simulated. ii. The virtual store would have all the components and departments of a normal Macy’s store and has the capability to have additional departments added for online-only products that can be easily added unlike a physical store where more floor space would have to be created by building more or sacrificing space from other sections. iii. Each department would be its own “floor” and customers would move from floor to floor with their personal Macy’s assistant which will be described later. iv. The graphics for each section would be very detailed and there would be “racks” with pictures of actual merchandise that Macy’s sells and it would be grouped by Brand within the section. v. Because it is online there are nearly limitless opportunities for expansion and increased detail and realism within the store. c. Macy’s Online Personal Shopping Assistant i. The next important aspect of the new online shopping experience would be the Online Personal Shopping Assistant (OPSA) that accompanies the online shopper as they move from department to department and from section to section on each floor. ii. The shopping assistant would be able to ask the customer questions about their tastes in style, brands, colors, etc. and can use this information to help customers pick clothes they will truly love without having to go into...

Words: 336 - Pages: 2

Mcgregor's Ltd. Department Store

...McGregor’s Ltd. Department Store | To: | Staff members | From: | President James McGregor | Date: | 10/22/2012 | Re: | New discount program | Comments: | McGregor’s Ltd. Department Store in this year has increased in sales, and sales are above the average for retail stores; However, it has acquired the image of being old fashioned and traditional. I would like to change the image of the Store and to achieve higher efficiency and profitability by creating more business sense in the policies of the store. The outdated employee discount program is the place to start. Under the current employee’s discount program which is complex and in egalitarian, the size of the discount depends on the position of an employee, and there are six possible discounts existed. Some discounts are eating into profit margins such as major electrical appliances, calculators, cameras, and typewriters. In the other hand, salespeople, maintenance workers, and clerks are not getting a fair shake; therefore, new policy, which is more generous for most employees would encourage spending on high-profit-margin goods and increase the involvement of employees in the store and should lead to a significantly greater volume of sales. The new policy is based on simplicity, equality, and profitability. The discount would vary according to the goods purchased, not the status of the purchaser. There are three tiers in this program: 1. 10 percent discount would be given on low margin goods, such as large......

Words: 497 - Pages: 2

Memo of Macy's Department Stores Repositioning

...Memo of Macy’s Department store repositioning Case Synopsis The traditional department store was the dominant player in the American retail industry in the first half of the 20th century, which was designed to provide a unique shopping experience for consumers. However, only 50 years later, this mainstay of retail world was experiencing declining sales and serious questions were being raised as to whether its demise was imminent. Firstly, this case gives us a brief introduction of Macy’s, which is consolidated by 15 regional department stores with 810 store locations across the country. The company repositioned the consolidated Macy’s in the overall retail landscape in an attempt to differentiate the new company from its competitors. Secondly, the case provides a situation analysis of the factors Macy’s is facing, which includes the general economic environment, industry (product and services and segments), competition and consumers. Last but not the least, the case details not only Macy’s 2005-2006 consolidation and repositioning strategy but also Macy’s 2006-2011 post-consolidation. Questions 1. Complete a situation analysis of the traditional department store industry and of Macy’s as of 2005. Which factors in the external environment could (positively or negatively) affect the success of Macy’s new strategy? Which internal factors could affect the success of the company’s strategy? I think the following external environment factors could affect the......

Words: 568 - Pages: 3

Online Clothing Store

...Report On Online clothing store i Report On Online clothing store Submitted To: Rubaiyat Bin Arif Lecturer, UIU Submitted By: Name | ID | Farshid iftekhar | 111 101 036 | Taufiq Hasan | 111 092 170 | Md. Hassan Siddiquee | 111 072 107 | Noor Ibne Salehin | 111 082 071 | Sec: B Date of submission: 29-12-2012 ii Letter of Transmittal 29th December 2012 Rubaiyat Bin Arif Course Instructor School of Business United International University Subject: Submission of Report on Online clothing store. Dear Sir, With due respect & humble submission, we undertook our term paper under your direct supervision & guidance. As you will notice the report consist about Online clothing store .We have discussed the report on our T-Shirt store. And this has made the report a complete and an extensive one. Therefore, we are confident of the validity of our term paper. If you have any questions or suggestion about the report, we would be happy to oblige for any further clarification. Sincerely, ---------------------------------- Farshid Iftekhar (On behafe of the group) Iii Acknowledgement All praises are due to Almighty Allah who enabled us to complete this report. This report is about “Online clothing store” on the topic we have covered by the basis of the instruction given by the Course Instructor. We would like to express our sincere gratitude & appreciation to our......

Words: 4229 - Pages: 17

Porter's Six Forces Analysis General Retail: Merchandise/Department Stores

...February 25, 2010 Assignment 2 Porter’s Six Forces Analysis General Retail: Merchandise/Department Stores Prepared by: Yulia Petukhova ID# A30 The department store industry will be analyzed taking department stores as players, individual consumers as buyers, and manufacturers and distributors as the key suppliers. The Rivalry among existing firms High The period from the end of the 20th century up until now has been marked by the consolidation trend in the department store industry, characterized by major acquisitions by a few larger, powerful competitors, greatly intensifying the rivalry among them.9, 13 Since there are only a few of them in the industry, they tend to match each other’s steps in some way or another. After JC Penny introduced itself to Manhattan just a block away from Macy’s, it is only a matter of short time before Kohl’s will finally announce its move into Manhattan as well.10 Slowdown in the industry growth coupled with reduced consumer spending and low switching costs intensifies rivalry even further prompting the market players to differentiate their products by introducing exclusive brands and increasing innovation.3, 15, 17, 19, JC Penny contracted Cindy Crawford to extend her jewelry brand exclusively at their stores, while Macy’s has signed a strategic alliance agreement to become an exclusive retailer of Ellen Tracy branded women’s sportswear in spring......

Words: 2385 - Pages: 10

Macy's Department Store Case Study

...External Analysis for Macy’s Departmental Stores Inc. Introduction Macy’s Department Stores Incorporated or Macy’s is an American based retail chain of departmental stores. It is currently operating under two brand names the Macy’s and Bloomingdale in over forty five states of America. The company specializes in the range of products including jewelry, furniture, house hold items, footwear, clothing and other related items.It also offers online shipping services to the clients in large numbers of countries. The company currently operates in four business segments including Macy’s,, Bloomingdale’s and (one source, 2011). The company’s stocks are listed in the New York Stock Exchange under the symbol M (Macy’s Inc, 2011). The current market capital of the company is over thirteen billion US dollars and holds second position while Kohl’s Corporation has over sixteen billion US dollars market capital holding first position in the markets (NYSE:M, 2011). SWOT Analysis SWOT Matrix Strengths • Market position • Business operations • ecommerce Weaknesses • Legal issues • Geographic concentration Opportunities • Business expansion • Expanded product lines • mergers Threats • Competition • Regulations • Economic conditions Strengths Macy’s Inc. is among the largest retail outlets operating in the United States that deals in the diverse range of products like apparel, households, jewelry etc.......

Words: 2943 - Pages: 12

Data Administrator for Department Stores

... DATABASE ADMINISTRATOR FOR DEPARTMENT STORE (TECHICAL PAPER) ANDREW L. PASSIE STUDENT Dr. HOSSEIN BESHARATIAN PROFESSOR CIS 515 STRAYER UNIVERSITY September 6, 2013 SUMMER Page 1 STRATEGY PLAN FOR DATABASE SYSTEMS ABSTRACT We are also going to discuss a Technical paper on Database Administrator for Department Store. We should know that a Database Administrator is the person who is responsible for planning, organizing, controlling, and monitoring the centralized and shared corporate database. The DBA is the general manager of the database administration department. We are also going to discuss the potential sales of the department store transaction within a database, evaluation of all relationships of the database solution using the Crow Foot notation, justifying that Big Data tools could be used for forecasting sales and inventory of the department store, the SQL functions to help sales predictions, implementing cloud-hosted solution for a database in the cost involved and pricing structure required, ranking the cloud services options of......

Words: 4277 - Pages: 18

Department Stores

...Department Stores are Struggling! Ashley Pearson FYS: History of Providence Professor Hughes December 17, 2012 In 2012 department stores in Providence are struggling. When one takes a drive through Providence the main retail stores are in the Providence Place Mall. From an outsider’s point of view it doesn’t look like these stores are struggling. After all, everyone in Providence knows where this tremendous mall is. What people do not know is that in reality they are headed downhill. These stores are department stores. A department store is a large retail store carrying a wide variety of merchandise and organized into various departments for sales and administrative purposes.[1] In the past, stores like The Outlet, Gladding and Shepards had trouble keeping up with modern times and eventually this led them to close down. If a department store cannot keep up with this modernization it is in danger of failing. Department stores overall, start to fail due to the social and economic problems that occur in Providence. This paper, therefore will investigate the rise and the fall of these three department store retailers as well as taking a look at why these more modern department stores are struggling to this day. The Outlet is a department store that was built in 1891. It was built under the two brothers Leon and Joseph Samuels and was located on Weybosset Street.[2] Immediately after being built, The Outlet......

Words: 1961 - Pages: 8

Denver Department Stores

...Denver Department Stores, a Colorado retail store chain, is an entity that was suffering from the effects of decreased sales volume. Jim Barton, the supervisor of four departments within the main location in Denver, was struggling with developing a process to improve the store’s sales. Barton identified with the notion that the decrease in sales volume was a simple matter of a slowdown in the economic landscape, and that the downturn would effect all stores in the retail business. However, Barton’s superior, Mr. Cornwall, the general merchandiser of Denver Department Stores, told Barton that some stores have experienced a 15% gain in recent sales. Cornwall made it clear that he expected Barton’s segments to have sales equal to the other departments within the company due to more aggressive salespeople. As a result, Cornwall proceeded to employ a tally card system that would keep track of each employee’s sales as a method of evaluation. It should be noted that Denver Department Stores employs part-time clerks, those responsible for the majority of sales within each department, and head clerks, the superiors to the part-time clerks. The head clerks are responsible for organizing the stock room, training part-time employees, and maintaining the positive appearance of the store. Cornwall concluded that the tally card system would allow the company to eliminate the weak salespeople and replace them with people that possess stronger sales skills. Ultimately, the tally card system......

Words: 3150 - Pages: 13

Shopping Online vs in Store

...Online vs. In Store Clothing Shopping In today’s world, clothing shopping has become a way of life for most people. Searching for clothes has become common every day of the week. People shop on the weekends, at work, and even in the comfort of their own beds. In store and online shopping for clothes may seem similar; however, they have many aspects that differentiate the two. For years, the only way to shop for clothes was physically going to the store and purchasing the item in person. However, in recent years a new kind of shopping has boosted product sales by the billions. The internet provides a twenty-four hour, seven day a week shopping center available to anyone. Online shopping is a fast way to look for a specific item that fits a consumer’s wants or needs. Searching an online store eliminates the hassle of looking through an endless rack of clothes in attempt to find a certain item. The majority of online stores have an abundance of different sizes in clothing while in store they may only have one size that does not suit a person’s needs. Another benefit of online shopping is the pleasure of shopping from your own home and not having to drive to the store. Online shopping can be done anywhere that has an internet connection. This means no more waiting in long checkout lines that are filled with grumpy people or taking multiple circles around the parking lot in attempts to park. If someone is from a small town, they may not have the luxury shopping center that......

Words: 797 - Pages: 4

Department Stores

...ABC Sporting Goods Part 1- Complete the following ratio analysis for ABC sporting Goods Profit & Loss Profit for 2006 was-86,318, Profit for 2007 was-113,799 Profit for 2008 was-126,472 Profit for 2009 was-75,252 Profit for 2010 was-67,955 Between 2008-2009 ABC Loss 51,220 Between 2009-2010 ABC Loss 7,297 Return on sales was 7.52% Return on Assets was 27.34% Return on Net Worth was 83.69% Quick Ratio was 0.48 Current Ratio was 1.59 Inventory turnover (gross sales divided by inventory) was 5.93 Assets to sales Ratio was 0.28 Total liabilities to net worth was 2.06 Part II Estimate the business value using BizStats. –Valuation Rule for Sporting Goods Store at BizStats. These are the BizStats I found Profitable Sole Proprietorships | 51.40% | Non-Profitable Sole Proprietorships | 48.60% | Income Among Profitable Sole Proprietorships | 80.00% | Income Among Non-Profitable Sole Proprietorships | 20.00% | Average Net Profit | 11.50% | Valuation Rule of Thumb Industry | "Rule of Thumb" Valuation | Accounting Firms | 100–125% of annual revenues | Auto Dealers (New Cars) | 0–10% of annual sales + inventory | Book Stores | 15% of annual sales + inventory | Coffee Shops (Gourmet) | 40% of annual sales + inventory | Day Care Centers | 45–50% of annual sales incl. inventory | Dental Practices | 60–65% of annual revenues incl. inventory | Dry Cleaners | 70–80% of annual sales + Inventory | Engineering Services | 40–45% of......

Words: 607 - Pages: 3

Peapod Online Store

...Peapod Tina Phillips Rasmussen College Peapod Peapod, LLC is an online grocery delivery service. Peapod was founded by Andrew and Thomas Parkinson in 1989 as a lifestyle solution for busy families. In 1990, Peapod partnered with Jewel Food Stores to fulfill orders. In the beginning, Andrew, Thomas and their families did the shopping and packing and made deliveries with their own cars. (“Our company”) They joined the internet in 1996 when they created and launched their own website,, they also made the Inc. 500 list of fastest growing privately held US companies. Peapod was associated with Jewel until 1999 when it opened a facility in Niles, Illinois, and started picking orders from there. Using their own picking center helped them control inventory and product quality. (“Our company”) In 2000, Peapod became a wholly-owned subsidiary of Royal Ahold, the international food provider based in The Netherlands, and pursued exclusive relationships with Ahold USA grocers, Stop & Shop and Giant Foods. Peapod was grown slowly and wisely by leveraging partnerships with other established companies. In mid-2001, when competitors like Webvan were going out of business, Royal Ahold purchased the remaining outstanding shares of Peapod, making Peapod the leader in the online grocery space. Since Peapod joined forces with Ahold they now serve more than 355,000 customers each year. (“Our company”) Peapod operates under a centralized distribution model with...

Words: 812 - Pages: 4

Mcgregor's Department Store Case Analysis

... DATE: April 19, 2016 TO: Staff and members FROM: James McGregor SUBJECT: Implementation of new policy INTRODUCTION / PROBLEM STATEMENT James McGregor is the president of McGregor. He was trying to improve sales above the average of the total retail stores for the coming years. However, the issue that he found out is about old fashioned and traditional goods. Those old fashioned goods which need to be change become fashioned affect sales keep staying. Moreover, the outdated discount policy is complex and unfair for whole employees, especially for lower level workers. More importantly, the policy stay in old fashioned idea so that it loss interested in young customers. To solve this problem, James McGregor come out new policy to make it simple and fair. The reason he think the new policy will work is it could attracts young customers and it also will help to decrease the remaining goods at inventory. FACTS AND ASSUMPTIONS 1. Goods that sold at our store is too old fashioned. There is not enough young customers and young employees willing to buy them. 2. Due to the old fashion products, it is difficult to recruit young employees or attract young staffs who already work at our store. 3. It is important to increase long term profits. 4. Lower level and maintenance staffs have not benefited from the previous policy, so that they may be stealing inventory while working. 5. It will improve the turnover of inventory. 6. The old discount......

Words: 399 - Pages: 2

Store Analysis

...Guillermo Furniture Store Concepts * Guillermo Furniture Store (GFS) in the late 1990s faced a financial crisis because of changes in the furniture industry. By going from a leader in the field down to a company that can hardly survive amongst its current competition, different financial concepts for GFS need to be evaluated and incremental financial decisions need to be made in order for GFS to survive (Guillermo Furniture Store Scenario, 2011). This paper will contain a discussion of the weighted average cost of capital (WACC), background on the use of multiple valuation techniques in reducing risks, a discussion on the net present value (NPV) of future cash flows for different alternative methods, and a sensitivity analysis. Guillermo Alternatives The financial downturn of Guillermo Furniture resulting from developments in the industry has caused a need for alternatives to be evaluated in order for Guillermo to remain in business. Alternative one is the option of keeping everything the same until business fails while option two offers the possibility of becoming a broker and distributor for a different furniture store that is currently dominating the market. Option three, is to allow Guillermo to keep the store he has in business but invest capital in a manner that allows the store to move into high-tech manufacturing processes to allow for a competitive edge to exist against the other industry leader. By Guillermo opting to move forward with technological......

Words: 1270 - Pages: 6

« Anterior | Hausfrau Holidays 2 | Une envie de vérité