Hightower Department stores: Case Analysis Harvard Case Solution & Analysis

Hightower Department stores: Case Analysis Case Solution

Case Analysis: Hightower Departmental Stores


High tower department stores are located in the United States, which are spread over almost 6 metropolitan cities in the region while working all across the US. However, the company deals in consumer goods and other home accessories.Moreover, the company also sells commercial goods. The company has specialty in selling toys and deals in a variety of toys in its every store spread over the US region.

The company was a small but profitable chain which was working well and generating profit as compared to other retail chains in the region. The name of the company was pioneer and recognized by quality and customer value.

Moreover, the company was trying to give its customer more value while charging a higher margin for providing better quality.
The management of the company believed that emphasizing on TVCs, responding to change and hiring friendly sales personnel was its key to success, while the management also set high quality corporate culture as its Key Success Factor.

The company was quite profitable and charging a higher profit over its products as compared to its industry rivals, however the company reported a net profit after tax of almost 17.5 million dollars and revenue of almost 371 million, which shows the size and the profitability of the company.

Problem Statement

The company was focusing towards its toys’ department since this department was quite favourable for it in terms of profitability and revenue. The company was trying to enable the toys department to generate more revenue in order to increase profits. Moreover, the company was generating a big share of its revenue from this department while the department was facing some difficulties. However, that department was making large revenue and all of this department’s stock was able to be sold easily. The seasonal sales of this department were impressive.

On the other hand, the department was still facing many problems and difficulties in managing its goods and other purchasing problems. The department was charging almost 50% above cost for setting the sales price which was quite high while it was also dealing with make to order toys, which it was importing from Germany having a lead time of almost 6 to 8 months which was also a challenge for the company.

Apart from this, the company was still making profits, however the department was facing unrealized inventory and also shortage problems. The main challenge was to manage and forecast sales in a way that the goods don’t become short and unrealized at the end of the forecasted period.

The paper will enable the reader to understand what problems did the company faced and what the alternatives for those threats were. On the other hand, the study also enables the reader to understand the financial strengths and competitive threats of the company and its recommended solution.

The study will also enable the reader to understand the steps which should be made by the company in order to prevent stock outs and to order its goods safely while reducing its carrying and holding cost as well as its ordering cost.
Qualitative Analysis

The qualitative analysis of this case includes the focus towards the promotional strategies, shelving strategies and overall stores’ selling strategies

Promotional Strategies

The company is focusing towards the promotions of their toy department on emphasizing towards the only medium of communication which is TV, while the company is not focusing towards the other means of communication. However, the strategy is working well but the company is losing its potential customers because of unawareness about company’s products and offerings.....................

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