POM Case study 4

1. CASE STUDY 4
PLANNING FOR A MIRACLE ON 34TH
STREET
SUBMITTED TO, SUBMITTED BY,
PROF. ABHILASH G N NIVIN VINOI
P14199
PGDM-B

2. EXECUTIVE SUMMARY
The case deals with the restructuring of R.H Macy, a multi
branded fashion retail store which was facing major crisis due
to poor cost controls, customer service, computer systems,
type and price of itsmerchandise andhow they recovered this
critical condition under two co-CEOs by strategically long term
planning.
(Word Count: 50)
Macy was facing a lot of problemslike outdated equipment’s,
mounting depts, cost perception etc. To revamp company’s
image the two CEO’s where appointed. One to fix the finance
department and other to maintain company’s image and
revamp its product line. They realized planning and strategy
should go hand in hand. So rather than looking for a sudden
hike they planned for a sustainable and long term plan. All
there plan was realistic and flexible.
PLANNING MODE
They have a Conservative Planning. They want to carry Macy
out of the red and back into the black. So they designed a five
year plan hoping to get ten percent sales growth and margins
improving two points. They planned first to get out from the
debts and then concentrate on increasing sales.
STRATEGIC MODE
The CEOs implemented a new system referred to as Buyer-
Planner-Store (BPS). Until that time various roles like
merchandising, delivery, planning etc. are done by a single

3. person. But Macy changed that concept. A single guy was put
for handling each group.
For attracting cost conscious customers they replaced high
priced, glitzy product line to more moderately priced line.
When questions were asked about the downscaling they
responded by saying “It is a price point and not fashion
statement”. Thus well-made, stylish brand like Levi Strauss
where introduced again.
For improvingcustomer service and store layout theyinstalled
satellite network to connect suppliers with sales people. It
helped them in coordinating products inside store and
attracting customers by displayingit in proper places. If there
is a high demand for a particular product, the dealer or
supplier will inform the store and according to the current
trend they willproducemore andsupplyit to the dealers. Thus
the new technology was utilized by them for buildingprofit. It
also helped the executives of the company to talk directly to
their employees about issues and concerns.
The competitionintextile fieldwas very tough, so Macy hasto
thinkoutof boxto competein the market. So forgetting a step
aheadof all other competitors they launcheda 24 hours cable
TV channel, naming TV Macy’s which became the most
profitable and successful portion of the CEOs’ plan. Before
introducing this plan the only scope was through newspapers
or advertisements. So it was a limited exposure. Macy’s rivals
also used one or two hours spot for promoting there brands.
But it was first time that a 24 hour channel was launched. All
these 24 hours they show about there own private-label

4. apparel, housewares, and other items. Through this there
scope became exclusive. Thus they succeeded in this textile
field and there by rapidly increasing profit.
(Word Count: 450)