Assignment 2
Strengths
Neiman Marcus has a strong American luxury brand portfolio. Its strong customer loyalty adds up to its strengths. The company’s market sustainability is enhanced by its recession-resistant clients who have considerably high discretionary spending (Leslie, 2016). Besides, the organization has conspicuous, eye-catching multi-channel retail formats thereby attracting a large group of the upper middle class and the upper class. The organization’s departmental stores are located in upscale areas where the target customers including the celebrities and the wealthy class can access them.
Weaknesses
The store’s marketing and global exposure are relatively low compared with the standards of global brands. Adding up to its weaknesses is the organization’s low inventory turnover rate. The organization’s extremely expensive products are more likely to alienate the middle class (especially the lower middle class) who would have purchased the less-pricey commodities had they not been chased away (Boone, 2016). The target market has a small range target demography focusing on the super-rich and the wealth. This increases the risk of market loss.
Opportunities
Online retail in the US are projected to grow over the years hence high likelihood for increased market. Potential expansion of the brand in the global market. The organization’s potential entry into e-commerce is hence widening its success potential. Potential for new store opening and remodeling (Leslie, 2016). The fact that the departmental stores look forward to invest in technology creates a potential increase in process productivity.
Threats
Intense competition from other firms including Barneys, Lord and Taylor, and Nordstrom amongst others. The increasing labor costs in the US has a major impact on the organization's profitability since the profit margin is reduced (Boone, 2016). The recession of the US economy also poses a major threat to the organization. The increased number of counterfeit items has reduced the organization's profitability since target customers are duped into buying them.
Assignment 4
In an attempt to provide better customer experience through better customer services, the organization, in 2014, moved the positions of senior executives. Besides, more than 180 employees were moved from the TX warehouse and office facilities in Irving to the facilities in Dallas. This was done in an Omni-channel-oriented attempt to unify members of the larger Neiman Marcus Group with its major sales channels so that all can focus on one focus goal which is winning the customer (Ash, 2016). Moreover, on September 2015, Neiman Marcus merged its online and offline divisions to ensure that customers are served with a ‘seamless’ shopping experience. This move mainly targeted those customers who frequently move from online to offline shopping and vice versa. To facilitate this shift, the departmental store promoted the president of the online division to the president of both the store and online division. The fact that one individual will oversee the store’s operations, sales, e-commerce and customer service will help in unification to a considerable extent. It also implies that the operations are integrated into a single view such that whether a customer purchases items from the store or digitally, data will reflect the same view.
In addition to its Omni-channel strategies of the store is its upscale location of its stores in areas where celebrities and other target customers can easily access them for shopping. Over the whole of last year, Neiman Marcus has been developing new stores that were selectively located including one in New York at Roosevelt Field Mall on Long Island and another one at Hudson Yard on Manhattan’s West side. While some of these stores are set to open this year, others will take a little bit longer in development until they are tailored well enough to satisfy customer needs and requirements (Troy, 2014). For the stores that are located less proximally with their customers, the organization offers free shipping services. In-store pickups are also prevalent in such instances where customers complete the transaction from the comfort of their houses and simply approach the stores for pick-ups. All these operations can be coordinated from a single point. This does not only create a unified brand to customers but also provides the organization with a consolidated view of back-end operations.
The newly introduce system shall enable the organization to sell to its customers directly through mobile devices. Sales representatives and managers are placed in a better position to communicate with their customers directly in a more efficient manner at any time. Besides, the system shall enhance better organizational reporting such that the sales and marketing managers do not have to undergo a whole new process in reporting (Ash, 2016). Reports shall be made in a rather automated manner which is more accurate, less time consuming and more efficient. The system automatically records all the transactions. Both online and offline. Adding up to this system, Neiman Marcus also has an intuitive promotion management. An application facilitates the planning and settling trade promotions of the organization. Adding up to the organization’s Omni-channel retailing features is its online distribution module where data relating to all organizational sales made can be exchanged across all relevant parties (Troy, 2014). The system is boosted by an online sales support team that has been set up by the organization to ensure a continuous flow of data.
Assignment 5
One of the organizations key competitor is Bergdorf Goodman. Bergdorf, however, seems to operate on a different level of Omni-channel retailing. While the Bergdorf has two main locations in Manhattan, Neiman Marcus has none. Not even in the whole of New York does Neiman Marcus have a single store. Manhattan is dominated by upper-class populations who are attracted to and interested in luxury, design, and fashion. The fact that Neiman Marcus lacks even a single store in this location is significant as far as its Omni-channel retail strategy is concerned (Fiorletta, 2015). The main market message sent by this conspicuous phenomenon is that Neiman Marcus is focused and associated with mass luxury while the Bergdorf Goodman is associated with upper eastside elite. Purchasing from the Bergdorf Goodman has a lot to say about the purchaser’s class while purchasing at the Neman Marcus has a lot to say about their luxury. All this can be insinuated from the specific locations and customer targets by the two competitors. While Neiman Marcus targets those interested in mass luxury, the Bergdorf Goodman targets the Upper East Side elites (Stambor, 2016).
The Bergdorf Goodman is more elite than the Neiman Marcus going by the category and the pricing of commodities they offer. While Neiman Marcus operates a well-known discount store for its customers, the Neiman Marcus last call, the Bergdorf Goodman does not operate such a store. This means that if one cannot afford luxurious commodities from the normal Neiman Marcus stores, they can rush to the organization’s discount store but if one cannot afford the same commodities in the Bergdorf Goodman’s stores, they have nowhere to run to (Fiorletta, 2015). The only option is to avoid the commodities completely. The Bergdorf Goodman provides a New York-centric customer brand while the Neiman Marcus provides elite customer centric commodities. Even from the location of the store outlets, one can easily tell that the Bergdorf Goodman is interested in New York-centric customers and not any other class unless one is of a higher class than that. The wide distribution of the Neiman Marcus stores, however, proves that the departmental store targets customers from a wide range of luxury classes (Singh, 2012).
The Neiman Marcus has branded its Omni-channel retail in such a manner that it positions itself as a departmental store that draws from a broader clientele base. The widened clientele location and conspicuous attraction of all classes of luxury, fashion and design interested individuals prove this market position. Its outlets are distributed all over the United States in suburbs with middle-class individuals with a taste for luxury (Stambor, 2016). While this is so, Bergdorf Goodman from a very narrow clientele base; the Manhattan class. In fact, the stores are only located in the New York. This affects the businesses in that one makes profits through high quantity sales while the other one does not have to sell very large quantities to make profits. From this, it is well evident that The Neiman Marcus offers more ‘mass’ luxury while the Bergdorf Goodman offers more ‘class’. In other words, the type of luxury offered by the Neiman Marcus is more affordable by a wider group of people than the one offered by the Bergdorf Goodman (Fiorletta, 2015). This makes the Bergdorf Goodman a better definer of class than a mere luxury, unlike Neiman Marcus.
One of the main ways through which the Omni-channel strategies in both businesses affect them is by enhancing customer centrality. In fact, this is the main aim of every retailer or business that adopts the Omni-channels strategies. They are all geared towards ensuring that their customers are satisfied (Stambor, 2016). All the organization’s strategies must be geared towards customer satisfaction failure to which the organization is more likely to lose its customers than retain them. Adding up to the effects of Omni-channel strategies to both the Bergdorf Goodman and the Neiman Marcus is the fact that both have to change their supply chain strategies to those that provide room for customers to purchase the same commodities through several different channels. The businesses to change their supply chain design, especially on the downstream side. The Omni-channel strategies compel for a more than one downstream route for the organization’s supply chain (Singh, 2012).
Assignment 6
Short-term strategies are those that focus on the immediate characteristics and problems of the organization and how they can be solved (Zentes et al., 2011). They are also known as tactical or operational strategies. They affect the day to day operations of the organization. While this is so, medium-term strategies are those that apply more permanent solutions to the current problems or characteristics of the organization (Zentes et al., 2011). For instance, the departmental stores may revise their quality control programs in an attempt to deal with quality issues in the organization. Other medium-term strategies include short courses for employees such one-day seminars, workshops and benchmarking. Long term strategies are those strategies that seek permanent solutions for the organizations (Zentes et al., 2011). It is through long-term strategies that the organization places itself in a position to achieve its overall targets. It is important to note that short-term goals are developed towards the achievement of medium-term goals which are developed towards the achievement of the long-term goals. They all depend on each other with the main goals being the long-term goals. For instance, if the organizational wants to double the profits in three years (long term goal), the medium term goals shall be to hire celebrities on contractual basis for advertisement while the short-term goals may include seeing to it that the celebrities have advertised the organization well enough to attract the customers.
One of the strategies that are both aggressive and conservative that the Neiman Marcus may adopt is opening stores in Manhattan and New York at large. This strategy is aggressive in that it attacks the Bergdorf Goodman since this is where it is maximizing on its store location. The strategy is also conservative in the sense that the departmental stores operate in the same industry and the same line of products with the same customer targets. Adding up to the strategies is an advertisement. The organization should advertise itself in such a way to attract the upper-class customers. This strategy is aggressive in that it seeks to attract a customer who originally purchased from the Bergdorf Goodman. The departmental stores should as well seek to venture into the global markets and position themselves in such markets in such a way that customers can associate them with both luxury and class. This is aggressive and conservative in that it attacks and maintains the status quo at the same time (Campanelli, 2014). Adding up to these strategies is price discrimination. In price discrimination, the organization should offer the same commodity to different customers at different prices. As such, the stores place themselves in a better position to attack competitors who have positioned themselves for class while at the same time it remains conservative regarding commodities provided. Adding up to the conservative and aggressive strategies is hiring a wide range of competent, highly skilled and knowledgeable professionals for the organization who were the employees of the main competitors such as the Bergdorf Goodman. This strategy is aggressive in the sense that it poaches good employees from the competitors, and it is conservative because it causes little change to the organization and its performance (Campanelli, 2014). In fact, the only change that happens is performance improvement as a result of incorporation of new knowledge, skills and competence.
One of the strategies that require significant investment is venturing into global markets. This requires a lot of resources ranging from financial, capital, human and knowledge resources amongst others. Going global would require the organization to conduct a deeply scoped research hence the need for a considerable amount of resources. The strategy to open up new stores in New York would also require the organization to recruit new members of staff which would compel an increase in the labor costs (Campanelli, 2014). Finally, an additional strategy that requires significant investment is advancing the level of organizational technology for efficiency. This requires considerably high short-term capital to set up the whole system. The long term costs are, however, minimal. Among the strategies that require lesser funds include price discrimination as pointed out earlier and partnership. Partnerships will, however, depend on the partner and the partnership agreements. Even if advertisements would require a considerable amount of funds, the funds consumed are fewer than those consumed by the strategies categorized as funds consumptive. Besides, it depends on the type of advertisement adopted by the organization (Singh, 2012). Personal selling is deemed to be cheaper than public relations which are more costly than publicity. Sales promotion is more expensive than personal selling and advertising but cheaper than public relations. It is also important to note that some forms of advertisement can be controlled from within the organization such as public relations while others such as publicity cannot.
References
Ash, H. (2016). Neiman Marcus Focuses On Customer On Omni-Channel. Innovativeretailtechnologies.com. Retrieved 20 May 2016, from http://www.innovativeretailtechnologies.com/doc/neiman-marcus-focuses-on-customer-on-omni-channel-0001
Boone, A. (2016). Neiman Marcus IPO Valuation. Slideshare.net. Retrieved 20 May 2016, from http://www.slideshare.net/andrewbo/neiman-pre-ipo-valuation
Campanelli, M. (2014). Neiman Marcus Focusing on Omnichannel Strategy. Total Retail. Retrieved 20 May 2016, from http://www.mytotalretail.com/article/neiman-marcus-focusing-omnichannel-in-store-e-commerce-strategies/
Fiorletta, A. (2015). Nordstrom and Neiman Marcus Named ‘Omnichannel Leaders’ In L2 Report. Retailtouchpoints.com. Retrieved 20 May 2016, from http://www.retailtouchpoints.com/features/trend-watch/nordstrom-and-neiman-marcus-named-omnichannel-leaders-in-l2-report
Leslie, S. (2016). Neiman Marcus - SWOT Analysis. prezi.com. Retrieved 20 May 2016, from https://prezi.com/zisihxb1lnmh/neiman-marcus-swot-analysis/
Singh, H. (2012). Marketing strategies' of retail: Empirical study of departmental stores'. Saarbrücken, Germany: LAP Lambert' Academic.
Stambor, Z. (2016). Neiman Marcus is the latest retailer to go ‘omnichannel’. Internetretailer.com. Retrieved 20 May 2016, from https://www.internetretailer.com/2014/04/02/neiman-marcus-latest-retailer-go-omnichannel
Troy, M. (2014). Omnichannel aspirations are evident at Neiman Marcus. Retailingtoday.com. Retrieved 20 May 2016, from http://www.retailingtoday.com/article/omnichannel-aspirations-evident-neiman-marcus
Zentes, J., Morschett, D., & Schramm-Klein, H. (2011). Strategic retail management: Text and international cases. Wiesbaden: Gabler.
