Case Synopsis: Ann Taylor

The Ann Taylor Case provides information about both Ann Taylor Stores Corporation (ANN)
and the overall retail environment. The case depicts ANN, a womens specialty clothing retailer
that had been successful in creating a complete product line that appealed to its target
demographic of socially upscale professional women, but that in 2008 faced increasing
competition and a challenging economic environment. ANN had experienced significant growth.
However, success had been very uneven between the original Ann Taylor Stores (AT) division
that sold updated classics and the companys newer Ann Taylor LOFT division that carried
lower priced casual merchandise.
ANN was not the only retailer suffering in a poor economic climate.The news reports quoted at
the beginning of the case confirm that the entire retail industry was facing an unpredictable
environment in 2008-09. Retail businesses were encouraged to take a close look at operations to
see what changes might have to be made. ANNs current CEO, Kay Krill, was already doing so.
She had already begun to implement a variety of initiatives and was considering several more.
To generate growth, Krill had identified several distinct areas of opportunity. She continued her
ongoing efforts to revitalize the flagship Ann Taylor (AT) store brand, while not dampening
LOFTs recent growth. In addition, ANN had recently launched a beauty business, was testing a
maternity section, had expanded the high end fashion offerings, and was considering a new
concept store specifically targeting the older segment of women ages 55-64.
However, these initiatives came under review in 2008 after the downturn in sales. CEO Krill
announced a restructuring plan, a reduction of the firms overall cost structure. This included
layoffs of headquarters staff and reconfiguration of executive performance compensation
bonuses. Some analysts questioned the wisdom of Krills ongoing involvement in day-to-day
operations and wondered if the turnover in upper management since 2006 might be a problem. It
is clear that Krill was firmly committed to long-term growth. However, the basic question of the
case is whether she was doing what she should do to unleash what she believed was the firms
significant untapped potential?
Questions
1. What are key forces in the general and industry environments that affect Ann Taylors
choice of strategy?
2. What internal resources and assets did ANN have that gave it a competitive advantage?
3. How did ANN compete?
4. What has Kay Krill done to implement strategy, and what challenges remain?

Case Synopsis: Fresh Direct

First launched in July 2001, FreshDirect was a New York City based on-line grocery store with a
state of the art production center, top-notch personnel, leading edge manufacturing software, the
highest standard of cleanliness, health & safety, and an informative and user-friendly website.
System efficiencies included: a cost-effective operational design; no middleman; a central
production and distribution location; well designed order and delivery protocols; and a policy of
no slotting allowances. These system characteristics enabled FreshDirect to maintain a high
product quality while keeping product prices low, therefore their promise to grocery shoppers of
higher quality at lower prices.
The ideal FreshDirect customer was described by Jason Ackerman, one of the founders, as
someone who buys their bulk staples from a warehouse like Costco on a monthly basis, and buys
everything else from FreshDirect on a weekly basis. The website offered a broad selection of
products along with information about the food. Products could be compared on taste, price,
usage and nutritional information. Custom cuts and seasonings of meat could be ordered.
Delivery options included direct to the home in New York City, or office and train parking lot
access in the suburbs.
The on-line segment of the grocery industry was a small percentage of the industry total.
Despite a large potential target audience, the on-line segment had been slow to catch on. The
total online sales in 2008 were $6.5 billion, and the numbers were expected to reach over $8.4
billion by 2010, but the five million people who shopped online for groceries still represented
only 2 percent of the online population.
FreshDirects competition came from traditional brick-and-mortar grocery chains and a handful
of other on-line grocers in New York City. The challenge was to compete on price while
covering the cost of packaging items in the warehouse and delivering individual grocery orders.
With margins so small, in order to be successful, some analysts estimated that the online grocers
had to do 10 times the volume of a traditional grocer. This increased the pressure on FreshDirect
to differentiate itself from other online and traditional brick-and-mortar competitors and capture
market share. As the online grocery market continued to define itself, FreshDirects challenge
was to continue to innovate in product purchase, storage and distribution, and attract loyal
customers while keeping costs down and quality up. Could FreshDirect maintain its market share
among competition from both online and tradition grocers?

Questions
1. What were key forces in the general and industry environments that affected FreshDirect?
2. What internal resources and assets did FreshDirect have that gave it a competitive
advantage?
3. How did FreshDirect compete?
4. What innovations and entrepreneurial strategies did FreshDirect utilize to craft a
competitive advantage?

Case Synopsis: Jamba Juice

Juice Club (which would eventually become Jamba Juice Company) was founded by Kirk Perron
and opened its first store in San Luis Obispo, California in April 1990. The company began with
a franchise strategy and opened its second and third stores in Northern and Southern California
in 1993. In 1994, management decided that an expansion strategy focusing on company stores
would provide a greater degree of quality and operating control. In 1995, the company changed
its name to Jamba Juice Company to provide a point of differentiation as competitors began
offering similar healthy juices and smoothies in the marketplace. On March 13, 2006, Jamba
Juice agreed to be acquired by Services Acquisition Corp. International (headed by Steven
Berrard, former CEO of Blockbuster Inc.) for $265 million. The company went public in
November 2006. In December 2008, Berrard named James White, formerly president of
Consumer Brands at Safeway, as the new CEO and president of Jamba Juice.
Jambas core customers were health conscious consumers who led, or aspired to lead, a healthy
lifestyle. Therefore Jamba positioned its products as healthy alternatives to conventional
American fare, such as hamburgers, french fries, and ice cream. Due to vast options in size,
caloric density, and relative sweetness, Jamba smoothies could serve as a light snack, a sweet
treat, or even as a meal replacement for on-the-go customers who wanted to avoid highly
processed or sugar rich convenience foods. The Companys commitment to fresh fruits and
natural products bolstered its image as a leading provider of natural food and beverages,
allowing it to benefit from the healthy alternatives trend.
Jamba Juice Company followed a fundamental business philosophy focused on branding
(attention to the product attributes, and company vision and values), business (planning for longterm growth), and culture (creating a team environment, passion for the brand). Jambas growth
strategy included the development of new stores, increasing same store sales, increasing
customer frequency, developing alternative brand channels, and increasing either companyowned or franchised stores, all with an expanded menu. With competition highly fragmented in
the specialty juice and smoothie industry, Jamba Juice had a unique opportunity. Did it have the
resources available to carve out a competitive advantage without losing its healthy alternatives
brand identity?
Questions:
1. What are key forces in the general and industry environments that affect Jamba Juices
choice of strategy?
2. What internal resources and assets does Jamba Juice have that may give it a competitive
advantage?
3. How should Jamba Juice compete?
4. How should Jamba Juice manage its growth?