Ann Taylor is facing financial losses and requires a cost-effective solution to boost sales revenue without adding operational costs. The management is responsible for these losses and therefore, there is a need for thorough interventions in style management. The suggested solutions include prioritizing productivity to drive sales growth. Two proposed approaches are scheduling associates based on the daily sales volume and implementing motivational plans such as bonuses linked to the percentage of sales closed.
The suggested methods are practical and will not harm Ann Taylor's customer base or employees. These solutions offer a viable solution for the company.
Evaluating the case and identifying relevant information
Ann Taylor, as a division, has encountered several difficulties in the last two fiscal years. Following the recession 18 months ago,
the company has seen a decrease in projected revenue and an uptick in operational costs.
Due to a rise in operational costs and a decline in its core clients, Ann Taylor has had to downsize its workforce and close stores. As a result, thousands of jobs have been eliminated and nearly 200 stores have shut down. The closures were carried out in three phases: 117 within the first 18 months, followed by 56 in the subsequent six months, and an additional 30 in the last six months. These actions were taken with the goal of reducing expenses and improving revenue margins for the entire industry.
The decision to close stores and reduce staff was based on evaluating each store's contribution to Ann Taylor's overall revenue pool. Examining this closely reveals that our main competitors, Gap and The Limited, have not been significantly impacted by the economic downturn. Therefore
it is crucial for Ann Taylor to concentrate on increasing sales while taking into account factors such as consumer preferences and advertising strategies compared to what our competitors offer.
Determination of the Root Problem ; Identification of the Problem Components
Ann Taylor's decline in profit margins in the past year cannot be solely attributed to the economic downturn. The management style has played a major role in contributing to this decline. While the management at Ann Taylor has not completely failed in managing processes within the organization, there are areas where improvements are needed. One such area is the scheduling of shifts for store managers. Currently, these schedules are created manually, resulting in inaccurate sales forecasts. This manual approach relies on previous trends, leading to an imbalance of workers during slow and peak times of the day. To address this root problem, new ideas must be generated, with a focus on problem components such as staffing, employee motivation, aligning advertising rates with sales revenues, and reducing operational costs without resorting to job cuts.
Proposed Alternatives
It is advisable to generate some possible alternatives that could potentially boost the company's sales. One option could involve balancing the working hours and the peak times of the day with the number of associates present. Another alternative is to design a motivational plan aimed at ensuring that the staff remains happy and energetic, thereby enhancing their productivity for more than 80% of their scheduled working hours.
Evaluation of the Proposed Alternatives
In order to improve the efficiency of the stores, several alternatives can be considered. First, there should be an assessment of the working hours,
identifying the periods of high activity and aligning them with the available staff. Associates should then be assigned accordingly.
In order to address staffing needs in accordance with sales volumes, the store adjusts the number of employees based on availability. This is achieved by utilizing work force management software instead of manually creating schedules. Additionally, motivational measures must be considered. While the company cannot currently provide additional benefits to associates, a bonus structure could be implemented whereby associates earn extra income based on their sales performance. This would incentivize employees to be more productive, especially during challenging economic times, and ultimately contribute to the sales growth desired by Ann Taylor.
Alternative chosen
The best alternative for ensuring company growth, increasing sales revenues, and improving productivity from the associates is to introduce a good work force management software. This software, along with intelligent managers, will enable flexible working hours and effective associates. Additionally, implementing an efficiency and motivation plan that correlates working hours with sales closed per associate will contribute to organizational growth. The aforementioned alternative will reduce operational costs, increase revenue, and can be evaluated for success over a 6-month period. This solution is cost-effective and easy to implement, ultimately leading to increased sales and the possibility of reopening other branches quickly.
Plan for implementation
The following implementation plan can be followed to ensure the success of the alternative choice. It is assumed that the majority of sales occur in the afternoon rather than the morning, and therefore business hours are set from 8am to 10pm. There are a total of 70 associates available each day, including reserves for any sickness or emergencies.
Once the workforce software is installed, the plan will commence immediately.
Emphasis on alternative choice
This plan focuses on creating schedules that are relevant to sales revenues. Regular evaluation of customer trends and preferred shopping times will be done to determine associate availability with lighter workloads.
The employees' motivation plan, which is based on the number of sales done, will be evaluated to ensure that all employees have an equal chance of earning bonuses. As a result, the shifts will be rotational for all employees.
Conclusion
In summary, applying customer counting and workforce management techniques is currently the best option for Ann Taylor. These techniques will not threaten the number of employees but instead enhance the importance of having them. Motivating the employees will also contribute to increased sales revenues for Ann Taylor and drive the overall growth of the business. Importantly, this without incurring any additional costs that are not covered by sales.
By implementing these strategies, the effectiveness of the employees will increase, leading to a simultaneous multiplication of sales revenue margins.
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