History and overview
Marshalls department store with the motto “Brand Names for Less”, was founded in 1956 by an entrepreneur Alfred Marshall together with a group of innovative entrepreneurs. The Alfred Marshalls’ concept was inspired by the need to take advantage of the postwar boom in the economy. Together with other partners, Marshalls opened a self department store in Beverly, Massachusetts, dealing in apparel and home wares at relatively low prices (FundingUniverse).
The company experienced a remarkable growth taking advantage of unsteady American economies that made shoppers to seek cheaper commodities that Marshalls was offering. By 1976, it had established 36 stores in England and California. However, with great achievement, the store attracted more investors who adopted the same idea. In the same year, Marshall was sold to Melville Corporation as it could not survive stiff competition. Under the ownership of Melville Corporation, Marshalls opened seven more stores in 1976 (FundingUniverse).
In 1983, Marshalls committed itself to increase the number of stores at the rate of 40 stores annually over next five years. By the end of 1983, Marshall Stores had increased to 175. Despite the achievement, Marshall faced a decline in its sales in 1985 and consequently, the growth rate of stores stagnated. The primary cause of the reduced expansion was the fight back by department stores and discounters who reduced prices and lured customers through bargains (FundingUniverse).
Marshall began to remodel its stores based on merchandise, size and design in order to attract upscale customers. New and remodeled stores were characterized by bright colors, new fixtures and improved signage. The new outlook resembled department stores. As a result of changes, sales increased and hit $2 billion mark (FundingUniverse)
TJX, the parent company of the off-price retailer T. J. Maxx, bought Marshalls in 1995, when the company had 496 stores. By the time of acquisition, Marshalls was offering brand name family apparel, including accessories and lingerie, in addition to a broad selection of footwear and home fashions. (TJX Companies, Inc.).
SWOT Analysis
Strengths
The company is appealing high quality designer products that are abreast with the dynamic world of fashion. Marshalls sources its merchandise from manufactures, thus no compromise in the quality of the products. Essentially, Marshalls products are of superior quality and also up to date with changing customer trends, tastes and preferences.
Marshalls is in fact not able to survive a downturn in the economy, but it actually thrives during the hard times as customers opt for off price stores that offer relatively cheaper prices as compared to the departmental stores (MBA Skool).
Weaknesses
One of the weaknesses that inhibit Marshalls from exploiting full market command is low brand awareness. The company has not adopted proper brand awareness campaign across the countries it operates in. Many people remain unaware of their products and services (MBA Skool).
Additionally, Marshall lacks good customer care services. Thus, there have been cases where customers express their dissatisfaction. Without good customer care services, Marshalls risks losing its credibility and loyalty from its customers who may opt for other off price shops with better customer service (MBA Skool).
Opportunities
In the face of a recession, Marshall would have an opportunity to increase its market share and boost its growth as more consumers actively seek off price stores for bargains (MBA Skool).
Marshalls has opportunities to explore the vast, emerging markets in developing countries. Entry to developing country market is a good strategy to access a wide array of growth opportunities. Such network expansion would bring high revenue and make it globally competitive as it enlarges its market base (MBA Skool).
MBA Skool further notes that Marshalls can increase its sales through diversifying its line of products, to include sunglasses and jewelry collection to create a convenient shopping stop. This would widen its customer base and increase revenue.
Threats
Marshalls faces stiff competition from various players in the same business section, providing the same products at lower prices. MBA Skool notes that, increased competition would put the company at the edge of decline in profits as it channels its effort to counter the cutthroat competition and maintain its brand in the market.
The purchasing power of the customers entirely depends on the economy. In the wake of poor economic performance and reduced consumer purchasing power, Marshalls would risk closing its stores, in the face of declining sales (MBA Skool).
In order to exploit and maximize its opportunities, Marshalls should take some risks and develop a better growth strategy that would enable it to penetrate into other markets besides those established domestically and in Canada. Marshalls should also spend more money on market research to open more markets in order to counter fierce competition from department stores that have slashed their prices, taking away the advantage that Marshalls has enjoyed over time as an off price store.
Michmann and Mazze advise that specialty stores can improve on their business by being customer friendly, locating new stores in new markets, and anticipating the changes in the market segments (2). Choosing Strategic locations play a key in stores attracting customers (Kutz and Boone 430)
Apart from the Marshalls focus on its brick and mortar chains to access its customers, it should explore the use of e-commerce. Online stores will increase their accessibility by new customers as well as give the existing customers the convenience of shopping from wherever they are. E-commerce contributes just more than 1% of Marshalls sales of its three websites (FundingUniverse).
Marshalls should consider creating customer loyalty programs that suit both online shoppers and those who visit their physical locations. For instance, membership programs for Marshalls best shoppers, personalized VIP benefits and discounts.
Works cited
FundingUniverse. "Marshalls Incorporated History." History of Marshalls Incorporated –
FundingUniverse. 2016. Web. 23 Mar. 2016.
Kurtz, David L, and Louis E Boone. Contemporary Business. Mason, OH: South-Western
Cengage Learning, 2009. Print.
MBA Skool,. "Marshalls | SWOT Analysis | USP & Competitors | Brandguide | MBA Skool-
Study.Learn.Share.". MBA Skool-Study.Learn.Share.. N.p., 2016. Web. 23 Mar. 2016.
Michman, Ronald D, and Edward M Mazze. Specialty Retailers. Westport, Conn.: Quorum
Books, 2001. Print.
TJX Companies, Inc.,. "Our History - About Us - The TJX Companies, Inc.". Tjx.com. N.p.,
2016. Web. 23 Mar. 2016.
