FIRST SEMESTER 2022/2023

ACADEMIC SESSION A221

STRATEGIC MANAGEMENT
BPMN3023
GROUP D

CASE STUDY 1

ANN TAYLOR

Prepared for:
DR. MUHAMMAD ZULQARNAIN ARSHAD

Prepared by: Group 5

NAME MATRIC NO
VISHALINII KUPUSAMY 270789
NUR FATTIHAH BINTI ABDULLAH 271388
ZOE WONG 272110
MUHAMMAD AMIR BIN MOHD RAZALI 273157
WAN AIZAD BIN MOHD AZMI 273404

Submission date:
5th January 2023
TABLE OF CONTENTS

QUESTION 1.....................................................................................................................................1

QUESTION 2.....................................................................................................................................2

QUESTION 3.....................................................................................................................................4

QUESTION 4.....................................................................................................................................5
QUESTION 1

What are the main forces in the general and industry environment that influence Ann
Taylor's strategy choices?

The main forces, in general, can be identified as Porter's 5 Forces and STEEP
analysis. Porter's 5 Forces are the number and power of a company's competitive rivals, new
entrants into the industry, supplier power, buyer power, and the threat of substitute products
and services in the market. While STEEP Analysis examines political, economic,
sociocultural, technological, and environmental factors. So based on the case study, the main
forces detected influencing Ann Taylor's strategy choices are the increase of competitors
from Porter's 5 forces and economic and sociocultural factors from the STEEP Analysis.

The first key force is the increase in competitors. When many new companies enter
into the same market, the demand for goods from existing companies will decrease.
Especially when the new company offers a lower price. Customers will definitely go to
companies that offer lower prices but maintain the same quality. The increase in competitors
also means that customers will have more choices in the market. Although there was a lot of
competition for Ann Taylor, they still experienced significant growth. However, the success
was uneven for the original Ann Taylor Stores as well as the newer Ann Taylor LOFT
division.

The second main factor is the economic factor. The poor economic climate has
caused Ann Taylor to suffer as a clothing retailer. Ann Taylor and all retailers suffered due to
the unpredictable environment from 2008 until 2009. This incident can be related to the
global financial crisis that lasted between 2007 to 2008, producing long-term consequences in
the years that followed before recovery, particularly for retail enterprises. However, several
initiatives were introduced after the downturn of their sale in 2008, including reducing the
firm's cost structure, head office layoffs, and reconfiguring executive performance bonuses to
stabilize the company's finances.

And the last key force is the sociocultural factor. Ann Taylor's target market is
socially upscale professional women and recently, they have introduced a new focus on the
"older" segment of women aged 55 to 64 years. They introduced this new concept to
overcome the problem of increased competition and also a poor economy. By introducing this

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new concept, they will be able to generate more income due to the larger market and also a
wider target customer. So, these are the three key forces influencing Ann Taylor's strategy
choice.

QUESTION 2

What internal resources and assets did ANN have that gave it a competitive advantage?

The internal resources of ANN INC that give a competitive advantage can be divided
into tangible and intangible. Resources are an organization's assets, which serve as the
fundamental elements of the organization's structure, and might be either tangible or
intangible. The tangible resource is normally one that can be touched and possessed.

Mainly thru tangible resources, Ann Taylor has physical resources. The physical
resource has access to significant natural resource reserves, state-of-the-art manufacturing
plants and equipment, streamlined distribution channels, and strategically located real estate.
Based on this case study, both ANN Taylor and LOFT owned a number of outlet stores that
are located in several distinct areas and also continuously expanded their business growth. 
Moreover, to generate growth in their business, ANN Taylor has launched a new beauty
business trailing a maternity section targeting the “older” demographic of women between
the ages of 55 and 64. The new concept store had increased the selection of high-end
clothing. Therefore, the tangible resources have given ANN Taylor a competitive advantage.

Furthermore, intangible resources are assets that are long-term incorporeal resources
that the organization also owns and have a particular commercial worth. Intangible resources
include terms like trademark, goodwill, copyright, patent, brand, blueprint, internet domains,
intellectual property and licensing agreements. 

Another intangible resource she has used is brand, image, and reputational assets.
Products, services, and companies that have become well-known for their
distinctive successors and logos tend to have more loyal customers and a better reputation for
providing good brands. According to the case study, ANN Taylor has been ongoing their
business for a long period of time and has experienced significant growth where the company
has revitalized the flagship ANN Taylor (AT) store brand. The meaning of this is that the
company also has improved their reputation as a brand. Thus, the brand's reputation and its
growth of company performance their intangible resources. 

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 In addition, Ann also has internal resources from human assets and intellectual
capital. Human assets and intellectual capital is a skilled and knowledgeable staff,
exceptional performers in pivotal roles, an established culture of learning throughout the
company, or a successful managerial track record in the company. Based on the case study,
reductions in headquarters personnel and adjustments to executive performance bonuses.
Krill's decision to remain involved in day-to-day operations.

Overall, the company's competitive advantage is the capacity to use its resources to
deploy resources that have been purposefully integrated to reach a particular end state, as
embodied in the business processes and routines that control the interaction of resources to
transform inputs into outputs. ANN Taylor develops gradually due to subtle interactions
between tangible and intangible resources. ANN Taylor often relies on the firm's resources to
create, store, and disseminate new information and knowledge. It consists of the expertise and
experience of the ANN Taylor company. Ann Taylor has a management functional key that
can envision the future of clothing. Based on the case study, Kay Krill has announced a
restructuring plan, a reduction of the firm’s overall cost structure to expand the business in
depth.

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QUESTION 3

How did ANN compete?

ANN competes by focusing on the socially affluent, professional female audience.

In 2008, ANN had to contend with rising competition as well as a difficult economic climate.
This can assist ANN in identifying the customer groupings most likely to purchase their
goods. ANN can discover that groups they once anticipated to be most receptive to their
brand are not interested, while those they initially anticipated to be less receptive are really
quite receptive. Furthermore, ANN competes by launching LOFT as a sub-brand to
compete in women's clothing, especially in the market. By developing these sub-brands,
ANN may benefit since a strong secondary brand may support and increase awareness of the
parent brand. Customers are more willing to try new items from the parent brand if they trust
the sub-brand. Therefore, even if buyers only have exposure to the parent brand through its
sub-brands, familiarity and trust with a sub-brand can result in greater trust in the parent
brand. The sub-brand that ANN uses, Ann Taylor LOFT, may likewise be utilized
strategically to alter the expectations of customers. A firm can enter a new market or reach a
new target audience with the aid of a strong sub-brand. It might be distinct age groups or
clients from various places.

After that, by selling more casual merchandise with lower prices, Taylor LOFT
attempts to draw in customers. This demonstrates that ANN prioritises customer satisfaction
and product quality since customers are drawn to ANN's low-cost clothing offerings. This
can benefit ANN in certain ways so that it can always compete with other market
competitors. Additionally, ANN has identified several distinct areas of opportunity where
ANN has broadened its product line by starting a cosmetics company, testing a maternity
area, increasing its selection of luxury clothing, and considering opening a new concept store
that would target the "older" market of 55- to 64-year-old women to compete with rivals. It is
clear from this that ANN places greater emphasis on target market segmentation and
specifically targets seniors aged 55 to 64. ANN's marketing approach may be more targeted
according to this demographic segmentation. It helps ANN's goal be more clearly defined,
give future advertising strategies more direction, and makes the most of their resources, time,
and money.

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QUESTION 4

 What has Kay Krill done to implement strategy, and what challenges remain?

Generally, Kay Krill has implemented formulation strategies such as business,

corporate, and financial strategies to widen her business overall. Kay Krill's implementation
of several techniques has contributed to an increase in ANN INC's income. Kay Krill was the
president of Ann INC.'s president and its CEO throughout her tenure there. Because of her
expertise in retail merchandising, she has a lot of name recognition. In addition, she was the
first person to develop the hands-on management approach used today. Additionally, she
recognised areas of opportunity to produce growth by encouraging LOFT growth. This was
done in the hopes of achieving growth. She exerted incredible effort into reviving the ANN
Taylor shop brand. Other accomplishments include establishing a beauty company, testing
maternity sections, and creating a store geared at middle-aged to elderly women between the
ages of 55 and 64 years old. 

Throughout the business journey, Kay Krill has used the business strategy. She
concentrates on enhancing the product or service's competitive standing within its target
industry or market segment. Integrating into the larger corporate vision, business-level plans
nonetheless have a narrower scope. Here, the company's goals and aspirations are translated
into actionable plans shaping its approach to market competition. In the scenario, ANN, a
successful retailer of women's specialized clothes, had developed a whole product range that
catered to its core market of affluent working women. She implemented the business strategy
formulation to expand her business largely.

Moreover, she also implemented corporate strategy in managing the company's

business or product portfolio and strategic decisions Strategy at the corporate level guides
businesses toward promising new opportunities that should boost their bottom line. For
instance, she persisted in her attempts to reinvigorate the Ann Taylor (AT) flagship brand
without slowing LOFT's recent expansion. ANN was also mulling a new concept shop while
launching a beauty division, piloting a maternity area, increasing its selection of high-end
clothes, and expanding its high-end fashion products.

Besides, Kay Krill has also implemented a financial strategy where she examines the
financial implications of corporate and business-level options by restructuring the dividends

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and stock price. For instance, she took the risk of restructuring the plan to reduce the firm’s
overall cost structure, which included layoffs of headquarters staff and reconfiguration of
executive performance compensation bonuses. In other words, she implemented the
retrenchment strategy, which is contraction, to save the company from bleeding in terms of
cost and size. For example, she implemented this strategy in the restructuring plan of the cost
structure, which is clear that Krill was firmly committed to the company's long-term
growth.   

However, ANN INC. still has some challenges for their business; for example, it is an
unstable market situation. Due to the nature of the apparel retail market, it will be highly
influenced by the economy. Even though they try to diversify the strategies to increase their
income, but they still can’t control the situation because they don’t have the power to control
the economy, which means if ANN INC has more than a hundred strategies but still doesn’t
guarantee the strategies will work. The strategies can be used during an economic crisis. This
is because ANN INC at that time was not a big company that had the power or influence to
control the market.

Furthermore, I think it is one of their challenges to maintain a distinct difference in

operating two brand lines at ANN INC. It means a challenge to maintain casual apparel at a
lower price but still good quality and speciality, originally represented when they launched
the LOFT. This is related to their main objective, mission, and company vision which they
have to plan whether to focus on a main division like ANN TAYLOR or a subdivision
like LOFT. Although LOFT is a subdivision of ANN INC, they have their own difference in
the type of strategies, such as in the quality section, price section and target section. As
mentioned in the case study ANN TAYLOR, a women's speciality clothing retailer, had
significant growth but the growth had been very uneven between the original Ann Taylor
Stores (AT) division that sold updated classics and the company’s newer Ann Taylor LOFT
division that carried lower-priced casual merchandise.

The other challenge is related to ANN INC's new target of consumers, which is
older women between the ages of 55 to 64 years old. Their first target of consumers is
independent or professional women with careers to expand their target. They add a new
segment which is old women. Is ANN INC successful in attracting the attention of older
women customers to use their products when women at this age level spend less money on
clothes? In other words, to overcome this challenge, ANN INC should come up with a big

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new target of consumers who have a high probability of spending their money on clothes,
such as selecting a new target like professional men.