Bad Management…Competition… Are you really serious?
Below are excerpts from a Yahoo Finance article. They point to three (3) reasons for the US economy´s troubled retailers.
- Heightened competition from larger retailers.
- More competitors
- Bad Management?????
If bad management means not addressing the threat of internet then we agree, otherwise, management is management and in a competitive marketplace, it will always remain static on a whole… some win, some lose… but when ALL lose, something more than just ´bad management´ is at stake.
A recession? OK, good answer but that is cyclical and cyclical by its very definition means it will bounce back. What about fewer customers due to online options and easier shipping logistics? Very good answer and few companies are strategically responding to this profound and very likely permanent shift in consumer tactics in anywhere near optimal ways.
The answer has been with us all the time
We have ideas… and we also have solutions. We generally see the end results of significant competition, bad management and other market forces… we witness and deal with the closing downs. A fire forensics expert can help prevent more fires in the future. So when looking for answers, sometimes the best place to start is the finish line.(Boy, that was deep!) Here´s another one… One´s person trash is another person´s treasure. When we shift through the rubble of a shutdown, you´d be very surprised what we learn.
We here at Asset Impact have developed strong tactical methodology for organizations to navigate existing dissolution and reduction scenarios as well as insight on how many companies could initiate bolder and more successful prophylactic strategies.
If you are pruning your business, we will impact your decision dramatically. If you see gray skies for the foreseeable future, talk to us, we deal everyday with the gray and the black skies.
An Asset Impact Parable
There´s an old story about the guy who falls in the deep hole and he can´t climb out. He is panicking and he yells for help until he´s hoarse and just about when he has given up all hope and has little voice left, his friend comes to edge of the hole and looks down. The man in the hole looks up and says, “Throw me a rope!” but his friend does not do that… instead he jumps right down into the hole with him. “Why did you do that? the man says. “Now we both can´t get out.” And his friend replies, “Well, I been in this hole before and I know the way out… follow me.” Asset Impact knows those holes you have fallen into or are trying to avoid. We´ll navigate you out.
Great American Stores Starving for Customers
It´s no secret that U.S. retail sales collapsed in 2008 and 2009 because of the recession. But several of the largest retailers consistently performed poorly between 2005 and 2010 for reasons that go beyond the recession. 24/7 Wall St. looked at which retailers lost most in total sales during that period and found that their troubles have a few common elements.
First, some of these retailers compete with even larger retailers. This is true of a company like Foot Locker. Most high-end athletic gear is available at big box retailers and department stores.
Another reason for the poor performance of some of these companies is the presence of a number of direct competitors of relatively similar size. The office products retail sector is occupied by Office Depot, Office Max, and Staples. And, Wal-Mart´s Sam´s Club has created lines of merchandise that also compete in the sector.
The third reason that some of the retailers have done badly is poor management. Robert Nardelli was a former Jack Welch lieutenant at GE. Nardelli was passed over tor Welch´s job. He was hired by Home Depot to run the company after he failed to get the promotion. Between 2000 and 2007, Nardelli managed to alienate both employees and shareholders with poor results and extravagant pay packages. When Nardelli left, he became CEO of Chrysler, which also faltered under his management. J.C. Penney has had similar management problems. Poor merchandising decisions by CEO Mike Ullman, who has run the company since 2004, hurt revenue. He was recently replaced by the head of Apple´s retail store operation, Ron Johnson.