Management Information System - Professor. Suh - Team. Two Seong Yunmo Park Jiyong Oh Changhyup.
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Transcript of Management Information System - Professor. Suh - Team. Two Seong Yunmo Park Jiyong Oh Changhyup.
Pacific Sunwear - Company Analysis
Management Information System- Professor. Suh
- Team. Two
Seong YunmoPark Jiyong
Oh Changhyup
C1.I ntroduction of Company
What is the Pac Sun?
2.E xternal Environment Analysis1. General Environment2. Industry Environment3. Competitor Environment
3.I nternal Environment Analysis1. History2. Business Structure3. Resources and Capabilities4. Performance
4.K ey ProblemsWhat is the critical problem?
5.R ecommendations & Implemantation 3 Recommendations for solving the problems
ONTENTS
Introduction of the company
Pacific Sunwear. inc
“We are Pacific Sunwear”
PacSun still remains
“True to its Roots”
Goal: Regain Market Leadership in Spring/Summer Wear
Introduction of the company
Pacific Sunwear. inc
Earnings Call, March 15, 2011 (Schoenfeld-CEO)
Slow growth in Men’s department
Women’s sales dropping
Refocusing goals on key competencies of Summer wear
Field leadership team was replaced and 50% of district man-
agers got axed
Launch of first mobile app. & update to “outdated website”
New advertising campaigns
30-50 store closures a year is realistic
Stores are ‘outdated and in the wrong location”
External Environment Analysis
General Environment
Economic:
- Store closures and de-cline in sales due to re-
cession- Hard to compete when
revenue is decreasing
Sociocultural:
- Increased mix of cultures And lifestyles
- More environmentally conscious
- Reputation and status image
to represent
Global:
- Increased emphasis on Reducing greenhouse
gassesAnd “going green”- clothing trends
- Hesitance to venture into unknown market
External Environment Analysis
General Environment
Technological:
- Increased internet access- Increased cell phone use
- Online purchasing
Political/legal:- Possible emissions regula-
tions- Sweat shop labor laws
enforced
Demographics:- Targeting an older market- It’s not just surfers who
buy surf wear, their “niche”
Includes “non-participants” as well
External Environment Analysis
Industry Environment
- Low Switching cost- A great number and variety of retailers- Major customers are normal people
- Design- Brand loyalty- Customer service
- Large number of sup-pliers - Low switching cost
- Variety of raw materials : cotton, polyester, wool
Bargaining Power of Suppliers
Bargaining Power of Buyers
External Environment Analysis
Industry Environment
- Highly competitive : Hot Topic, Hollister, Zomiez- Sensitive to economic ups and downs- Tangible product = inventory & storage cost - Differentiation : Brand
Intensity of Rivalry Among Competitors
- High exit barriers
External Environment Analysis
Industry Environment
- Need a large infrastructure:store distribution center
- Service industry
Threat of New Entrants
- Technology is relatively simple. - Differentiations:brand, design
- Easily access to raw materials
Threat of Substitute Products
- Daily necessity for people and clothing cannot be substi-tuted for anything
External Environment Analysis
Industry Environment
LowPower
High Power
No Sub-stitute
Middle
Intense rival-riesS
up
plie
rs
Bu
yers
Substi-tute
New En-try
External Environment Analysis
Competitor Environment
Positive brand image through foundation, unique niche
product offering
Have not captured any par-ticular age group, lack com-mon selection offering, lack major advertising/marketingstrengths weaknesses
Established in California in 1988 by Orv Madden“the foundation of pop culture and its relevance to our target teen customer.”
Differentiation Strategy
2 stores in Canada
6 Stores in Puerto Rico
$6.56 Per Share
$44.65 Million Shares
Offer music and comic related t-shirts and accessories
External Environment Analysis
Competitor Environment
Ability to adjust and adapt product offering seasonally,
unique store culture, exclusive product offerings
Not large enough to expand globally, pricing above aver-age at time when economy is
downstrengths weaknesses
Differentiation Strategy
396 locations
looking to ex-pand to the
600-700
$29.47 Per Share
$30.99 Million Shares
"that is consistent with many teenagers' lifestyles,“
Created in 1978 in Everett, WA.
has couches with video game systems for cus-tomers to play and Skate shops are included in larger locations
External Environment Analysis
Competitor Environment
Brand recognition, status sym-bol to teenage generation, gi-
ant amounts of financial capital and assets to work with
High pricing, negative PRstrengths weaknesses
Launched in 2000 in Ohio, Off-shoot of Abercrombie & Fitch
Keep a uniform theme at each location, alternative or pop music played, and store design can give the feel of a beach location
to offer clothes for a So. Cal lifestyle
FocusedDifferentiation
Strategy
40 global loca-tions
looking to expand to southern hemi-sphere by 2014
Share data?
External Environment Analysis
Competitor Environment
Hollister Co Zumiez Hot topic Pac Sun-$2.00
-$1.00
$0.00
$1.00
$2.00
$3.00
$4.00
2008
2009
2010
Earnings Per Share
External Environment Analysis
Competitor Environment
Hollister Co.
Zumiez Hot Topic Pac Sun0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
2008
2009
2010
Gross Profit Margin
External Environment Analysis
Competitor Environment
Hollister Co.
Zumiez Hot Topic Pac Sun-24.00%
-20.00%
-16.00%
-12.00%
-8.00%
-4.00%
0.00%
4.00%
8.00%
12.00%
2008
2009
2010
Return On Assets
Internal Environment Analysis
History of the Pac Sun
Tom Moore and his partners opened the second store as a mall location one year
later
In 1993, Pacific Sunwear filed with the SEC for an IPO.
Originated as a small surf shop out of Newport Beach
founder Tom Moore opened his store in 1980 catering to surfers
1997 the company completed an acquisi-tion of Good Vibrations and announced
goals to launch demo.
Brief History
Internal Environment Analysis
Business Structure
Distribution Center in Kansas
Distribution Center in
Olathe
Headquarterin Anaheim, California
Pacific Sunwear leased and oper-ated 852 stores in all 50 states and Puerto Rico.
Headquarter and Store Location
localized assortment
planning strategies.
Internal Environment Analysis
Resources & Capabilities
a varied se-lection of heritage
brands in-spired by
well-known action sports
plans to im-plement a
new strategic
marketing initiative.
Internal Environment Analysis
Performance
Over the last few years, the company has continued to de-cline in profitability.
From fiscal year 2007 to fiscal year 2010, net loss further de-creased by $66,281,000.
Years
Key Problems
What is the Problem?
Decreasing women’s wear sales and stagnant men’s wear sales
Sales
Decrease
- Investors pulling out- Revenue decreasing- Mounting losses- Could lead to eventual bankruptcy
Key Problems
Current Turnaround Plan?!
Lower prices
Shift to trendier styles
Improve customer service
Play up big-name brands
Moving product quickly off the shelves
Selling off real estate to reduce costs
Result? Still Bad!!!
Why is there still no overall effect on Pac Sun sales…?
Pac Sun MUST find a Compara-tive Advantage to again become relevant in the retail industry and
thus increase sales!!
Recommendations
Recommendations & Justification
Create a PacSun clothing line and eliminate their several proprietary brands
Create brand recognition for PacSunReinforce the quality brand name
Lower overall costsThe products will be similar, with a unified PacSun logoNew clothing line will reflect the company’s roots
Justification
Recommendation #1
Recommendations
Recommendations & Justification
Diversify into the leisure industry
Extend into action and extreme sports and video gamesCurrent users will bring in their friends/family
Can transfer their core competencies into the leisure business
Justification
Recommendation #2
Can deal with management of risks.Certified PacSun employees can offer lessons in some sports
Skate-boarding
Snow-boarding
Skiing Surfing
Skate-boarding
Snow-boarding
Skiing
Surfing
100%
72%
63%
60%
65%
100%
58%
52%
39%
39%
100%
36%
68%
68%
66%
100%
Source: Mintel/Experian Simmons NCS/NHCS: Summer 2010 Adult Full Year—POP
which sport you participated in the last 12 months?
Recommendations
Recommendations & Justification
Implement a 3-Dimensional Body Scanner
Create a unique customer profile with virtual avatar and ‘closet’The profile will contain the customer’s measurements, billing information, and previous purchasesRecommend different clothing to each customer
Allow each customer to dress their avatar, and discover new clothing options for themselves
Justification
Recommendation #3
Improve customer relations
The Best Recommendation
Implementation
Once the technology catches on, we will spread it to other large locations
Promote the body scanner through conventional channels
Partner with an established com-pany,
sharing data to offer the best ser-viceInstall the system in PacSun’s high-
est traffic locations (California, Florida,
New York)
Increased sales due to the system
Thank you!
Any Questions?