The Department Stores in the United States
The department stores in the United States that go by the name Gordmans are run by a tiny business called Gordmans Stores, Incorporation. The corporate office is located in Omaha, Nebraska. The business was founded in 1915 and now runs more than 80 locations in a variety of shopping center developments, including lifestyle centers, regional enclosed malls, and power centers in 16 Midwestern states.
Products Offered
There are many different home fashion items, fragrances, accessories, footwear, and clothing available from Gordmans. Also, the Gordmans offers apparels, including women's, juniors, men's, young men's, maternity, plus sizes, team, and children's clothing comprising offerings for girls, boys, toddlers, and infants. The company also sells accessories consisting of sleepwear, leg-wear, fashion jewelry, sunglasses, handbags, intimate apparel, and designer fragrances. The company home fashion products include of bath products, bedding, fashion rugs, decorative pillows, house-wares, pet accessories, luggage, toys, gourmet food and candy, floral and garden, seasonal décor, vases, ceramics, candles, accent lighting, accent furniture, photo frames, and wall art.
General Assessment and Financial Status
Gordmans Stores are experiencing financial difficulty, and in the past six quarters, the company has posted five losses. So far, the company is considering filing for bankruptcy, since it has a $131 million debt. Moreover, consecutive losses have put the company at a more considerable financial disadvantage whereby it cannot expand its activities for now, and management is even considering retrenchment to reduce expenses. The company also has an agreement with Great American Group and Tiger Capital Group for sale in liquidation of the inventory and other assets of the company distribution centers and retail centers in case their development optimization plan does not work. The company is suffering from recent months to adverse macroeconomic trends, such as a move by shoppers to the internet and sluggish mall traffic. Many small businesses in the retail industry are suffering due to expensive leases, a shift in consumer demographics, and general consumer shift from brick-and-mortar to online retail channels. Gordmans used to enjoy strong customer loyalty, but the latest change of customer behavior has made the company experience rough time, particularly in the department stores. So far, suppliers are reluctant to provide the company with new inventory.
Development Plan
Market Assessment
The company has entered a three-year contract with Revionics to adopt markdown optimization software to re-assess market option. This will enable the management to ensure that Gordmans has embraced the market-leading innovative markdown optimization solution. Revionics Markdown Optimization Suite will help the company to ensure that it adheres to the disciplined business process, remain competitive in a fast-changing retail landscape, and start selling products online. For Gordmans to remain competitive, it has to invest strategically and deliver measurable business value to the customer.
Partnership/Acquisition
Also, Gordmans has decided to enter into a partnership or acquisition plan with established retailers like Stage Stores whereby through an agreement, the new partners will operate more than fifty of the company stores leases, including all of the equipment, fixtures, furniture, inventory, and other assets in those locations. Moreover, the new partners will have the right to assume the lease for the distribution center and intellectual property, employees, and Gordman trademark. This move will enable the company to focus on reorganizing its development plan whereby its finance will be focused on a key business operation that will allow it to rejuvenate.
E-commerce and Online Platform
Also, the company launched e-commerce platform to start selling products online. Since this platform was started in 2015 Gordmans is experiencing an increasing growing number of customers. The company is targeting to have more than 20 million loyal customers through the online platform by the end of the year 2020. Also, the company has introduced a new branding campaign to attract more customers and appeal to the existing one, or those who might have been attracted by competitors. The focus on the company by the end of 2020 is to renovate its store base, ensure e-commerce strategy and online platform are successful, implement a new point-of-sale system, optimize its supply chain, identifying expense saving methods to reduce losses, and continue driving guest traffic.
Alternative Channels
Currently, the key alternative channel that Gordmans is utilizing for the development optimization plan is pursuing clients in different methods, especially promoting and selling its products online. By using both online and retail strategy, the company will be able to compete with other companies that are selling the same products using different alternatives.
New Products
Also, Gordmans is planning the development of new products to sell to potential and existing customers. New products are very significant in attracting new customers and renewing the company brand.
Target Market
Currently, the target market for Gordmans Stores is the domestic market in the U.S. With the current difficult situations, the company cannot consider expanding its activities in other countries. Moreover, the company targets customers from all demographics, such as socioeconomic status, gender, and age because it offers a wide range of products. However, despite that, the company marketing strategies and advertisement will focus more on middle-income and low-income earners since they represent the vast bulk of the current customers of the company.
Marketing
To ensure that development plans for optimization are successful, Gordmans Stores will promote and advertise its products and brand through TV, billboards, radio, and social media. Moreover, the market analysts will ensure that they interact with the consumers and potential consumers vigorously through online platforms and the company website.
Competitor Analysis
Gordmans Stores are experiencing strict competition in the market, particularly due to the nature of the retail industry which has attracted many companies. The key competitors are Macy's Inc., Wal-Mart Stores, and Kohl's Corporation among others.
Competitive Advantages
For Gordmans Stores development plan optimization to succeed, the company must continue focusing on the following areas to compete efficiently; outstanding value proposition, fun and energetic stores, and unique merchandise offering. However, other than those three, the company must start embracing and capitalizing e-commerce and the online platform as one of its key competitive advantages. Also, most of Gordmans Stores' competitors sell their products at a higher price though they utilize a special offers strategy. However, Gordmans Stores provide consumers with greater certainty since they offer a specific single price throughout the year.
SWOT Analysis
For the development plan of a business to work, it is critical for the management to analyze the SWOT analysis of the company to ensure that the development plan for optimization will enhance growth. Moreover, SWOT analysis helps in portraying significant gaps that require being addressed.
Strength - Gordmans Stores have high sales growth rate and experienced workforce. Moreover, there is a market barrier entry for the new entrants. Also, the company enjoys the strong domestic market.
Weaknesses - Gordmans Stores invest little in research and development, and this is one of the reasons why the company failed to recognize the consumer shift to the online platform and change in consumer demographics. Also, the company has high loan rates and a lower debt rating. It is because of the low debt rating that some vendors have refused to supply products to the company.
Opportunities - there are various opportunities that Gordmans Stores can optimize through its development plan. They include new acquisitions, high chances of growth rates, new markets, venture capital, and new products and services.
Threats - currently, among the significant perils that Gordmans Stores are experiencing include an increase in labor costs, increasing overall costs, external business risks, high competition, tax changes, and rising costs of raw materials.
Implementation of the Development Plan
Gordmans Stores development plan for optimization is a long-term plan, and it will be implemented in the next five years starting from 2017. The goal of this development plan is to ensure that the company can stand on its feet again and experience growth like it used to. To achieve this, a new management team that is compromised of highly qualified professionals has been appointed by the management to implement the plan. Moreover, the company is also empowering its employees to ensure that they remain motivated during the implementation period and afterward. Also, the company will not borrow money to finance the development plan since it is already struggling with the current debt. Moreover, the finance that the company will receive through acquisition/partnership will be used to repay existing debt, and the remaining amount will be used to finance the development plan for optimization. Repaying the current debts will help the company to regain the suppliers' confidence and will start supplying products to the company's stores.
The Role of E-Business and Its Applications
E-business has now become a significant part of the business in the current 21st C, because of its impact on a distinct aspect of running the business, primarily due to globalization, the internet, and improved technology. According to Chaffey, e-business is any process which a business firm performs over a computer-mediated network. These processes include selling and buying through the internet, a broad range of consumer management, production management focused processes, e-tax filing, and emailing clients among others. Also, e-business is based upon the foundation of the processing and transmission of digitized information, such as visual images and text from one electronic device or computer to another. Also, e-commerce is part of e-business that involves selling and buying services and products. Therefore, e-business, any business activity that net-enabled and it transforms external and internal relationships to exploit market opportunities and create value guided by the new rules of the connected, globalized economy. Moreover, e-business involves the continuous business entity value chain position and organization's value proposition through the utilization of digital technology.
For an organization to maximize e-business application, it is significant to implement organizational restructuring and alignment, process redesign, revised policies, and new job descriptions and reviews. Also, to optimize e-business applications, it is essential for an organization to examine security, legal, and tax issues. So far, e-business is reshaping all the models and rules of doing business all over the world. Therefore, the corporation's ability to embrace new business models and technology is crucial towards the enhancement of the organization's productivity.
Today, e-business has a significant impact on the value chain processes in the exchange of information, services, and money. Even essential market elements, such as why, how, where, when, what, and who are being radically influenced by e-business. Also, as organizations incorporate e-business into their activities, there are various unique secondary effects that are happening. They include marketing technique becoming more targeted, product development processes becoming more collaborative, and consumers becoming more empowered.
Applications of Doing Business Electronically
Some of the various applications of doing business electronically include:
- Marketing: where companies are now collecting or gathering data about consumer buying patterns, needs, preferences, and behavior accessed through e-commerce and the web. This ensures that marketing activities like a relationship with customers, product feature enhancement, negotiation, and price fixation are made easier.
- Finance: where financial organizations are utilizing e-business in their activities. Nowadays, customers can pay their bills through e-banking or online banking, transfer money to their other accounts, and check the balances of their loan and saving accounts. Moreover, many websites are offering access to charts, news, information regarding a firm profile, and analyst rating on the stocks.
- Manufacturing: particularly the supply chain operations. Various organizations have an electronic exchange that provides together selling and buying goods, run back-office information, and trade market information like inventory control. This facilitates speeding up the flow of raw materials and finished products within the business community.
- Auctions: where an electronic auction is used in the bidding process where prospective buyers are allowed to bid for the products.
Opportunities for Small Businesses to Operate Internationally
Nowadays, the internet, e-commerce, globalization, and improved technology have made the cost of doing business very little. Before, technological improvement, it was only big organizations able to expand their market internationally after building a stable, loyal national market. However, nowadays with the current improved technology and good connections, it is possible for small businesses to operate internationally. The only thing that these companies need to know is to establish a potential market for their products in the foreign markets because sometimes a product can sell well in your home country but fail to sell in the international market. Nevertheless, with improved technology, it is easy to research any global market that a small company wants to enter.
After conducting proper research, the next move is to market products or services provided through social media by targeting consumers in that foreign market. Luckily, performing marketing on social media is free, and it is also the most widely used social tool in the world compared to other sources of information and advertisement. Also, the cost of creating a business website that can be easily accessed by the customer is very minimal. The next move after establishing a potential market, having a good website, and strong presence on social media is looking for a business partner. A business partner can still be sought through social media and other internet business platforms.
Now, with a good potential market, a company website, a partner in the international market, and a huge presence in social media, the next thing that small businesses are supposed to adapt to optimize their business operations in the global market is extensive capitalization of online marketing or internet marketing. Internet marketing is very significant for the success of the business through the promotion of products and services. Internet marketing helps small companies to improve their business brand visibility, sales, and traffic. An excellent example of a small company that was able to operate internationally within two years after it was founded is Warby Parker that specializes in selling prescription eyeglasses and sunglasses through the online platform. The corporation was started in 2010, and in 2012 Warby Parker had reached a market cap of more than $600 million thanks to internet marketing.
Conclusion
Incorporation of e-business in the corporation has a tremendous, essential impact on different operations and aspects of the company. It helps in creating significant changes in areas relating to customer service, technological infrastructure, financial transactions, strategic planning, and human resources. Also, to have a successful e-business implementation it is significant for decision-makers to have an excellent understanding of the nature of e-business and e-commerce, and its potential towards the success of the company. Some of the best-performing firms, such as Gordmans Stores, have experienced economic difficulties for failing to understand macroeconomic changes and consumer behaviors like the shift from brick-and-mortar to online retail channels and changes in consumer demographics.
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