CASE ANALYSIS: ZAYRE CORPORATION

With respect on the company's Zayres stores, store management was decentralized, although merchandising and administration remained under central control. A great deal of store layout, targeted traffic flow, and merchandising experiments had been conducted (some with good results); however, no chain wide implementation of changes occurred because of the outcomes of the experiments.

Zayre Company also participated from the off cost sub segment with the retail industry. The business operated a couple of chains in this sub segment T. J. Maxx and Hit or Miss. TJ Maxx targeted the middle funds consumer, and was commonly successful. Hit or Miss carried teenage fad clothing and low end girls' clothing, and by the mid 1970s was a liability for ones corporation.

In the company's Zayres store chain, profitability had deteriorated, employee morale was low, the physical plant was disintegrating, and also the chain was steadily falling behind the sub segment market leader, K mart. Within the company's off cost chains, TJ Maxx was on track, although the division had yet to record its first annual profit (not unusual inside very first many years of the begin up operations), while Hit or Miss appeared to be dying on a vine.

Within the company, no a single assumed responsibility for poor performance. Instead, merchandising blamed the store managements, while the store managements laid the blame at the feet of merchandising. As a consequence, the

 

Expanding into up scale suburbs with store plans and merchandise mixes developed to target low funds customers also contributed towards issues experienced by the Zayres chain. Residents in up scale suburbs can also be successfully targeted by discount chains, but not if they are led to think that these kinds of stores are competing directly of the general product retailers in the area on a sole basis of price, even though excluding considerations of quality and value.

The internal bickering at Zayres could possibly be laid at the feet on the implementation with the recommendations in the 1969 consultant's study; specifically the recommendations to vastly enhance the size from the company's managerial staff, and to add new layers of bureaucracy to the company's organizational structure. Increasing the size of Zayre's managerial staff also increased the proportion of the company's gross profit that was consumed by overhead.

company's performance continued to deteriorate.

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