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Jones Apparel Group A Diverse Corporate Wardrobe Andrew Davis Amber Gaines Fred Hult James Igoe Yvannova Montalvo Vanessa ...
Overview of Jones Apparel Group <ul><li>Four Divisions </li></ul><ul><li>Well-known brand names </li></ul><ul><ul><li>Nine...
Industry Analysis <ul><li>Overview of Industry </li></ul><ul><ul><li>   Extremely Intense and Aggressive </li></ul></ul><...
Industry Analysis <ul><li>Overview of Industry </li></ul><ul><ul><li>   Extremely Intense and Aggressive </li></ul></ul><...
<ul><li>Threat of Substitution </li></ul><ul><ul><li>   Price and Quality  within  the industry </li></ul></ul><ul><ul><u...
Strategy:  Portfolio Choice <ul><li>A leader in the design and marketing of women’s apparel. </li></ul><ul><li>Portfolio c...
<ul><li>Differential Advantages and Important Parities </li></ul><ul><ul><li>Cash flow ($500M, 2002) and management </li><...
Evaluation of Strategy <ul><li>Overall, JAG’s strategy has been successful: </li></ul><ul><ul><ul><li>   Broadened portfo...
Evaluation of Strategy <ul><li>Corporate Inputs </li></ul><ul><ul><li>Financial Expertise </li></ul></ul><ul><ul><ul><ul><...
Evaluation of Strategy <ul><li>Parities </li></ul><ul><ul><li>Inventory control </li></ul></ul><ul><li>Strategic Thrusts <...
Alternatives and Suggestions <ul><li>Focus on the youth market for future acquisitions. </li></ul><ul><li>Apply test & rea...
Jones Apparel Group A Diverse Corporate Wardrobe by Davis, Gaines, Hult, Igoe, Montalvo, and Rucker
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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 &amp; 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
  • Transcript of "Jones NY (Business Policy, B-School)"

    1. 1. 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
    2. 2. Overview of Jones Apparel Group <ul><li>Four Divisions </li></ul><ul><li>Well-known brand names </li></ul><ul><ul><li>Nine West/Easy Spirit </li></ul></ul><ul><ul><li>Polo (licensed) </li></ul></ul><ul><ul><li>Lauren </li></ul></ul><ul><ul><li>Gloria Vanderbilt </li></ul></ul><ul><li>Focus: Downstream in design and marketing </li></ul><ul><li>Market cap: 4.8B, second largest in sector </li></ul><ul><ul><li>Gucci, VF Corp, LIZ, Coach, Polo </li></ul></ul>
    3. 3. Industry Analysis <ul><li>Overview of Industry </li></ul><ul><ul><li> Extremely Intense and Aggressive </li></ul></ul><ul><ul><ul><li> E conomic conditions and pricing </li></ul></ul></ul><ul><li>Rivalry is High </li></ul><ul><li>Bargaining Power of Buyer is High </li></ul><ul><li>Barriers to Entry are High </li></ul><ul><li>Bargaining Power of Supplier is Low </li></ul><ul><li>Threat of Substitution is Low </li></ul><ul><li>Future </li></ul><ul><ul><li> Pricing pressures will continue </li></ul></ul><ul><ul><ul><li> Balanced full and promotional pricing </li></ul></ul></ul>
    4. 4. Industry Analysis <ul><li>Overview of Industry </li></ul><ul><ul><li> Extremely Intense and Aggressive </li></ul></ul><ul><ul><ul><li> E conomic conditions and pricing </li></ul></ul></ul><ul><li>Rivalry </li></ul><ul><ul><li>Innovation needed for fierce competition </li></ul></ul><ul><ul><ul><ul><li>Fewer retailers and consumers </li></ul></ul></ul></ul><ul><li>Bargaining Power of Buyer </li></ul><ul><ul><li> Buyer switching costs are low </li></ul></ul><ul><ul><ul><ul><li> Buyer has access to information </li></ul></ul></ul></ul>
    5. 5. <ul><li>Threat of Substitution </li></ul><ul><ul><li> Price and Quality within the industry </li></ul></ul><ul><ul><ul><li> Need for vast product line </li></ul></ul></ul><ul><li>Barriers to Entry </li></ul><ul><ul><li>Startup, Distribution & Manufacturing Costs </li></ul></ul><ul><ul><ul><ul><li>Brand Identity </li></ul></ul></ul></ul><ul><li>Future </li></ul><ul><ul><li> Pricing pressures will continue </li></ul></ul><ul><ul><ul><li> Balanced full and promotional pricing </li></ul></ul></ul>Industry Analysis
    6. 6. Strategy: Portfolio Choice <ul><li>A leader in the design and marketing of women’s apparel. </li></ul><ul><li>Portfolio choice encompassing four areas. </li></ul><ul><li>A multi-brand strategy, each with its own consumer segment. </li></ul><ul><li>Diversification, acquisitions in the moderate market. </li></ul><ul><li>High standards for acquisition to insure high growth. </li></ul><ul><li>Strong, attractive brands, and medium to high growth. </li></ul>
    7. 7. <ul><li>Differential Advantages and Important Parities </li></ul><ul><ul><li>Cash flow ($500M, 2002) and management </li></ul></ul><ul><ul><ul><li>Quality control program </li></ul></ul></ul><ul><ul><ul><ul><li>Distribution and operational expertise </li></ul></ul></ul></ul><ul><li>Strategic Thrusts and Their Timing </li></ul><ul><ul><li>Product, line launches, licensing </li></ul></ul><ul><ul><ul><li>Youth and plus-size market </li></ul></ul></ul><ul><li>Target Results Expected </li></ul><ul><ul><li>15 - 20 % ROI for Acquisitions </li></ul></ul><ul><ul><ul><li>Growth in moderate apparel sales </li></ul></ul></ul>Strategy: Inputs, Thrusts, and Targets `
    8. 8. Evaluation of Strategy <ul><li>Overall, JAG’s strategy has been successful: </li></ul><ul><ul><ul><li> Broadened portfolio beyond apparel </li></ul></ul></ul><ul><ul><ul><li> Reduced dependence on a single line </li></ul></ul></ul><ul><ul><ul><li> Broadened footwear to encompass accessories </li></ul></ul></ul><ul><ul><ul><li> Divested of non- or low-performing retail outlets </li></ul></ul></ul><ul><li>The only error, the decision to reduce Jones New York. </li></ul>
    9. 9. Evaluation of Strategy <ul><li>Corporate Inputs </li></ul><ul><ul><li>Financial Expertise </li></ul></ul><ul><ul><ul><ul><li>Board experience in finance, IB, and M&A </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Cash flow management, as compared to LIZ </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Acquisitions have double-digit EBIT </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Fit portfolio as highly regarded moderate apparel </li></ul></ul></ul></ul><ul><ul><li>Quality control program </li></ul></ul><ul><ul><li>Expertise in distribution and operations </li></ul></ul><ul><ul><li>Import resolution issues and sourcing </li></ul></ul><ul><li>Criticism: No cohesive management of the supply chain </li></ul>
    10. 10. Evaluation of Strategy <ul><li>Parities </li></ul><ul><ul><li>Inventory control </li></ul></ul><ul><li>Strategic Thrusts </li></ul><ul><ul><li>Additional acquisitions in the youth and plus-size market </li></ul></ul><ul><ul><li>Diversify further to supply a range of women’s apparel </li></ul></ul><ul><ul><li>Exploit licensing agreements in better apparel </li></ul></ul><ul><li>Criticism: Slow to respond to youth and plus-size market </li></ul>
    11. 11. Alternatives and Suggestions <ul><li>Focus on the youth market for future acquisitions. </li></ul><ul><li>Apply test & react strategy across all of its business divisions. </li></ul><ul><li>Form more joint ventures with firms to supply IT services. </li></ul><ul><li>Apply IT services, supply chain management, to whole firm. </li></ul><ul><li>Examine targets in Europe. </li></ul>
    12. 12. Jones Apparel Group A Diverse Corporate Wardrobe by Davis, Gaines, Hult, Igoe, Montalvo, and Rucker
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