Jones NY (Business Policy, B-School)
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Jones NY (Business Policy, B-School)

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  • A leader in the design and marketing of women’s apparel Portfolio choice encompassing three areas A multi-brand strategy, each with it’s consumer segment . Diversification, acquisitions on the moderate market. High standards for acquisition to insure high growth. Strong, attractive brands, and medium to high growth
  • A leader in the design and marketing of women’s apparel Portfolio choice encompassing three areas A multi-brand strategy, each with it’s consumer segment . Diversification, acquisitions on the moderate market. High standards for acquisition to insure high growth. Strong, attractive brands, and medium to high growth
  • Differential Advantages and Important Parities Large free cash flow ($500M, 2002) Investment Banking and M & A expertise Quality control program Distribution and operational expertise Strategic Thrusts and Their Timing Product and line launches (Ongoing) Licensing agreements (Ongoing) Youth and plus-size market (Deferred) Target Results Expected 15 - 20 % ROI for Acquisitions Improved profitability Growth in moderate apparel sales

Jones NY (Business Policy, B-School) Jones NY (Business Policy, B-School) Presentation Transcript

  • Jones Apparel Group A Diverse Corporate Wardrobe Andrew Davis Amber Gaines Fred Hult James Igoe Yvannova Montalvo Vanessa Rucker Business Policy ( MGGB-7660-001) Professor Egelhoff
  • Overview of Jones Apparel Group
    • Four Divisions
    • Well-known brand names
      • Nine West/Easy Spirit
      • Polo (licensed)
      • Lauren
      • Gloria Vanderbilt
    • Focus: Downstream in design and marketing
    • Market cap: 4.8B, second largest in sector
      • Gucci, VF Corp, LIZ, Coach, Polo
  • Industry Analysis
    • Overview of Industry
      •  Extremely Intense and Aggressive
        •  E conomic conditions and pricing
    • Rivalry is High
    • Bargaining Power of Buyer is High
    • Barriers to Entry are High
    • Bargaining Power of Supplier is Low
    • Threat of Substitution is Low
    • Future
      •  Pricing pressures will continue
        •  Balanced full and promotional pricing
  • Industry Analysis
    • Overview of Industry
      •  Extremely Intense and Aggressive
        •  E conomic conditions and pricing
    • Rivalry
      • Innovation needed for fierce competition
          • Fewer retailers and consumers
    • Bargaining Power of Buyer
      •  Buyer switching costs are low
          •  Buyer has access to information
    • Threat of Substitution
      •  Price and Quality within the industry
        •  Need for vast product line
    • Barriers to Entry
      • Startup, Distribution & Manufacturing Costs
          • Brand Identity
    • Future
      •  Pricing pressures will continue
        •  Balanced full and promotional pricing
    Industry Analysis
  • Strategy: Portfolio Choice
    • A leader in the design and marketing of women’s apparel.
    • Portfolio choice encompassing four areas.
    • A multi-brand strategy, each with its own consumer segment.
    • Diversification, acquisitions in the moderate market.
    • High standards for acquisition to insure high growth.
    • Strong, attractive brands, and medium to high growth.
    • Differential Advantages and Important Parities
      • Cash flow ($500M, 2002) and management
        • Quality control program
          • Distribution and operational expertise
    • Strategic Thrusts and Their Timing
      • Product, line launches, licensing
        • Youth and plus-size market
    • Target Results Expected
      • 15 - 20 % ROI for Acquisitions
        • Growth in moderate apparel sales
    Strategy: Inputs, Thrusts, and Targets `
  • Evaluation of Strategy
    • Overall, JAG’s strategy has been successful:
        •  Broadened portfolio beyond apparel
        •  Reduced dependence on a single line
        •  Broadened footwear to encompass accessories
        •  Divested of non- or low-performing retail outlets
    • The only error, the decision to reduce Jones New York.
  • Evaluation of Strategy
    • Corporate Inputs
      • Financial Expertise
          • Board experience in finance, IB, and M&A
          • Cash flow management, as compared to LIZ
          • Acquisitions have double-digit EBIT
          • Fit portfolio as highly regarded moderate apparel
      • Quality control program
      • Expertise in distribution and operations
      • Import resolution issues and sourcing
    • Criticism: No cohesive management of the supply chain
  • Evaluation of Strategy
    • Parities
      • Inventory control
    • Strategic Thrusts
      • Additional acquisitions in the youth and plus-size market
      • Diversify further to supply a range of women’s apparel
      • Exploit licensing agreements in better apparel
    • Criticism: Slow to respond to youth and plus-size market
  • Alternatives and Suggestions
    • Focus on the youth market for future acquisitions.
    • Apply test & react strategy across all of its business divisions.
    • Form more joint ventures with firms to supply IT services.
    • Apply IT services, supply chain management, to whole firm.
    • Examine targets in Europe.
  • Jones Apparel Group A Diverse Corporate Wardrobe by Davis, Gaines, Hult, Igoe, Montalvo, and Rucker