Imported Stuffed Animals Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

INTRODUCTION:

High Power Department Store, is a departmental store in six major areas in eastern United States. The store is small but is earning a higher profit relative to its competitors. The company is enjoying its high reputation and brand image in respect of its good quality, large selection and high value. High PowerDepartment Store earns a good net profit but it cannot fight with the power of inflation.

The toy department of the store is not much of a highearning department, but still contributes 9% ofthe revenue. Strategies developed by the management of department helps the store to compete at a higher level with its competitors and project better profit margins. These strategies suggestto buy imported toys that are not available at other stores and are sold at higher prices.

PROBLEM IDENTIFICATION:

The main problem of the store is the “Stock” problem whichthe store faces quite often. The problem for the store is related to its inventory.After placing a new order of the imported toys, sometimes either the toys get out of stock at the end of the year or any of the toys that are left are sold to the Fernstone at a markdown.
Imported Stuffed Animals Harvard Case Solution & Analysis

SITUATIONAL ANALYSIS:

The toys department is enjoying its high sales including the brand image of the company,as well as the unique imported material available in the store. Mainly the sales of the company in the monthsof November and December contributes for almost 50% of the year’s projected sales. In a given year, almost 15-20 animals were available, and are exhibited together in a single display. In Christmas season, the animals occupy up to 20 square feet of display. Imported animals are mainly kept in Christmas season, after Christmas, they are sold at 80% of inventory to a job lot retailer.During Christmas, high quality toys were sold out, and some remained at the store throughout the year.

To select and order the toys, a number of buyers go for a world trip in January, to make the order complete by the time ofnext Christmas. As the foreigners placethe order, the order takes 6-8 months to be completed. The manager Julia Brown has a great experience of evaluating the items, decided their retail price and the volume of sales to be made. If the projections areclear, Brown would make the order at their place. But if the goods are riskier to sell, some testing items arepurchased. Before buying any order, Brown herself, visitwestern Germany, to differentiate each item, available to the store at the last year collection. Quantitativejudgments that areused to make the order isthe projected sale price (with a 50% markup on lending cost) and the forecasted unit sales expected to be sold at Christmas.....................

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