Identifying And Solving Outstanding Issues Of Harry Rosen Inc: A Case Study Approach

Customer relationship management

As identified from the case study, there are certain outstanding issues inherent in Harry Rosen Inc and they are enumerated briefly as follows:

Harry Rosen Inc is committed to provide effective customer service. The organisation depends on one-to-one sales approach, in which the customers are boosted in booking an appointment with a sales associate for enabling them to undertake purchase decisions. However, this system could suffer from a variety of issues. For instance, it might happen that during an appointment with a customer, there is a chance that the sales associate might have to leave the customer for accessing information on a workstation at the other store end(1).

It has been identified from the provided case information that Harry Rosen focuses on traditional financial performance measures like sales growth and profitability. However, it is to be borne in mind that these traditional measures are focused on short-term. Most of the business organisationsgather information that includesoperational and financial statistics(2). In addition, traditional measures depend on irrelevant and outdated principles and lack of relevance to the modern business environment demands. Finally, as the traditional performance measures focus more on revenue and cost data, Harry Rosen could not be able to concentrate more on the process. In most occasions, such data provide misleading or irrelevant information(3). The measures containing bottom line financial outcomes have been too slow in undertaking necessary corrective actions.

In order to improve the customer relationship management, Harry Rosen Inc needs to adopt target-based resource allocation. It is a universal fact that 70%-80% of business profit is generated with the help of 20%-30% of the total customers(4). As per the case information, the organisation is involved in using tools of data analysis from Cognos Inc developed into a GERS Inc merchandising system. Therefore, it is crucial to utilise this tool to gain an overview of the most potential customers. Such tracking, with the help of the aforesaid software, would help the organisation in distributing resources in a way that those customers receive the best services. This could be adjudged as target-based allocation and this would prove to be beneficial for the business organisation(5).

For overcoming the shortcomings of the traditional performance measures, balance scorecard is deemed to be the most effective solution. This system includes both financial and non-financial measures, which assist in providing a balanced overview of the overall organisational performance. Balanced scorecard takes into consideration the changes in the contemporary business environment, which include intangible assets and these are identified to be the primary source of competitive advantage(6).

With the help of such integrated system of strategic management, Harry Rosen could be able to align the business activities to the organisational strategy by associating performance measurement with the strategic objectives of the organisation. More precisely, it provides a framework in translating the strategy of the organisation into particular objectives of quantifiable performance that could be gauged effectively(7). The performance objectives are gauged utilising the four inter-related objectives, which include customer perspective, financial perspective, internal business process perspective and learning and growth perspective. The detailed implementation plan of the system has been discussed in the following section.

Traditional financial performance measures

In order to implement the balanced scorecard in Harry Rosen Inc, the management accountants need to follow the below-stated steps in the above-mentioned four perspectives:

Harry Rosen considers sales growth and profitability as the important financial factors. Thus, it needs to focus on its return on capital employed as well by maintaining at least 12% within three years. Therefore, in order to ensure profitability theme, asset intensity and cost minimisation needs to be provided adequate importance. In order to measure cost minimisation, operating cash expenses could be contrasted with the industry for becoming the cost leader in the sector(8). On the other hand, asset productivity would assist Harry Rosen in managing greater volumes from the growth strategy without diversifying the asset base.

A significant component of the organisation has been customer-driven strategy developed around sales related to convenience store products. The revenues could be generated from the other products of the organisation as well. This implies the presence of clear risk, as growth and profitability in combination might cause the organisation to fall back to a simple dimensional behaviour. With the help of balanced scorecard, Harry Rosen could be aware of the trade-offs and accordingly, it could manage them.

As Harry Rosen focuses on profitable growth strategy, the executives of the organisation might express divergent opinions regarding its selling strategies. It has been observed that majority of the customers of Harry Rosen have been male aging 39 years. These include moderate to high income levels having brand loyalty and sometimes to a specific situation, the customers purchase the products and pay in cash. However, for the price sensitive customers, the organisation needs to minimise its costs across the value chain including the stores in order to maintain profitability even at the minimum prices charged to the customers.

Alternatively, Harry Rosen could undertake efforts for drawing the younger customers by proving an effective purchasing experience. For ensuring this objective, the organisation needs to invest in its various stores by providing training to the sales personnel. However, such strategy would increase store costs along with hindering the organisation from making more profits(9). Another alternative for Harry Rosen would be to contemplate the distribution system for fulfilling the needs of the younger customers. Therefore, the following facilities need to be provided to the customers visiting the stores of Harry Rosen:

• Immediate access to the products
• Complete availability of all products, especially premium grades
• Satisfactory exterior store appearance
• Convenience stores stocked with high quality and fresh merchandise
• Friendly staffs

For Harry Rosen, it is necessary to create new clothing products for attracting different customer segments. This objective implies the desire of improving the purchasing experience of the customers by establishing new offerings at its convenience stores(10). Another goal would be to support the win-win association with the financial objectives and dealers of the organisation. Along with these objectives, it is necessary for Harry Rosen to undertake certain measures like consistent quality, stressed low cost, minimisations of asset downtime and mitigation of safety, environmental and health-threatening incidents. Majority of these measures are associated with cost minimisation and profitability themes in the financial perspective. However, as Harry Rosen mainly sells clothing products, it is not possible for the organisation to utilise higher process for recovering greater costs invested in manufacturing and distribution operations. Hence, Harry Rosen needs to adopt an operational excellence strategy in its primary operating processes.  

This is the final group of objectives in the balanced scorecard, which include motivation and skills of the staffs along with the role of information technology(11).  In order to ensure this perspective, three strategic goals are identified and they include the following:

• Boosting and motivating 700 staffs working in Harry Rosen for obtaining a wider insight of marketing and refining business
• Developing the skill and competency levels crucial for executing the vision of the organization
• Creating the leadership skills necessary for articulating vision, promoting integrated business think and developing the staffs(12)

• Formulation of strategic information needed for executing the strategies of Harry Rosen

• Allowing the achievement of the vision of the organisation by encouraging an understanding of the organisational strategy and by establishing an environment where the staffs are motivated to thrive towards that vision  

Hence, by implementing the above-stated measures, Harry Rosen would be able to deal with its business issues effectively and corrective actions could be undertaken for improving the overall position of the organisation in the Canadian market.

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