Accenture Business Case Study Contest 2013

Vivek Goyal (MBA-Oil & Gas-I year) 1, Anusha Thakur (MBA-International Business-I-year)1 College of Management & Economic Studies, University of Petroleum and Energy Studies, Energy Acres PO, Bidholi, Dehradun Uttarakhand: 248007 Address For Correspondence-: Jiya Hostel Nanda Ki Chawki via Premnagar Dehradun, Uttarakhand: 248007 Mob: +91-7351491231

Accenture Business Case Study

Tall mart one of the largest food retailers in USA The department store focused on giving the customer the latest in various product categories at better prices in other retailers. In 2013 when they adopted the strategy shift from conventional departmental store format to catalog based retailing. There were some gaps in the strategy: Feasibility-: According to the case before moving on the Catalog Based Retailing they didnt do a market survey or market research over it. They can ask people through survey what that they think about the catalog based retailing. With the help of this they able to understand the liking of each age group. So that they can target accordingly. Categorization-: They having a different category of products customer will not buy each and every product through catalog only. For example if a person goes for a shopping he or she purchases a jeans in Catalog based Retailing he or she has to choose a jeans from catalog and order it. But if the same person will buy jeans from normal store where he or she can take a trial before purchasing it that gives the satisfaction through catalog based retailing that satisfaction factor is missing. We can easily calculate with the help of this by data given to us in clothing category overall dip is of 65%. But if a person buy some gadget he or she can easily choose it from catalog because in that basically the configuration matters. Proper Execution-: According to the case all 500 store was renovated according to the revised design. Rather than go for all 500 stores they can start with 50 -70 stores renovation and by analysis of the response of all those stores they can move further. Footfall-: According to the case customer footfall had been reduced might be the reason that the salesman were not able to convinced the customers or catalog were not so much attractive that customer will attract towards shop. Sales-: According to the case their 2013 objective is to keep the sales intact no decline no growth. But year by year they should have some percentage increase in sales as an objective. Accounting Information-: In Catalog based retailing they have to ensure it stocked the entire product list in the catalog throughout the season. It

decreases the Stock Inventory ratio, Working capital turnover ratio and Operating ratio. Stock Inventory ratio-: The ratio measures how fast the stock is moving through the firm and generating sales. Working capital turnover ratio-: The ratio shows the number of times the working capital has been employed in the process of carrying a business. Operating ratio-: This ratio judge the operating efficiency of the business.

FY 2020-: According to the financial year 2020 the annual sales increases by 100% but their profit margin before tax increases by only 5%. It means their operating expenses are increasing but they are not increasing cost according to the rate at which operating cost are increasing. They had planned to open 1000 stores across USA no strategy has defined how many warehouses will they opened in comparisons with the no of stores. They are not able to capitalize the income by leasing out or selling available space to others retailers/Companies. Solutions which Tallmart can applied to overcome these problems are: As Tallmart had taken a stand they should go for a catalog based retailing. We can analyze the elasticity of product of different category and compare it with the elasticity of the products in 2012. Elasticity factor help us to understand change in demand as technology changes. For different product we can plot the shift in demand curve. We can go for the digital Catalog or E-Catalog particularly to target age group from 12 to 20. But technology should be user friendly so that any layman can use e-catalog very easily. In E-catalog we can add the comparison of the products with its substitute product so that in a single window buyer can get all the information.

 As Tallmart are planned to leasing out the space they can lease out the space to any food chain or event management company so that they can organize Any event particularly on weekend or any special occasion. That will help them to increase the footfall of buyers in the store. The salesperson should have knowledge of each and every product and they trained accordingly so that they able to explain each pros of the product from catalog only. According to 2020 vision Total store in USA is around 1000 or more cost of adding new departmental store is USD 50 Million in next 17 years they are expecting to invest USD 25000 Million in if they are in increasing their departmental store they also had to increase their warehouses also cost of adding one warehouse is around USD 20 Million they required to open at least 50 warehouses costing around USD 1000 Million. Total investment in 13 years is around USD 35000 Million. Rather than to go this way what we can do we can go with central warehousing system. It will distribute our logistic cost also and we convert our warehouses into departmental store renovated according to the new strategy. This will decrease our investment cost so that our PBT will be higher. In the central warehousing system divide the whole in into different smaller zones according to those zones we can open the warehouse. Because it is not necessarily that demand will be same from each part of the country where demand is more we can use more logistic o will open a warehouse according to demand. It will increase the Stock Inventory ratio, Working capital turnover ratio and Operating ratio. Conclusion can be Tallmart should identify their market for Catalog based retailing and for departmental store both markets having different products category and different age group strategy should modified according to that. They also had to identify the demand centers across USA and stores and warehouses should be opened according to that. With the help of these solutions Tallmart will be able to achieve its goals of 2013/2020.