Strategic Management Vera Bradley

Running Head: STRATEGIC MANAGEMENT

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STRATEGIC MANAGEMENT

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Strategic Management
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Executive summary

Vera Bradley is an upcoming player in the ladies apparel and accessories space with an increasing product portfolio that has developed from its trademark handbags to a diverse array of items. The products comprise of travel carrying cases as well as jewelry. The company has discovered profit growth hard to come by during the recent fiscal year as a result of the large part to operating margin compression from heavy promotional activity (Thompson et al., 2014). The comparatively poor financial performance of the company has led to a sell-off for its stock price over the past year.

Major facts about the company case

The primary fact about the company is that it was losing sales among 20 to 45-year-old and becoming extraneous to this key audience in the market (Thompson et al., 2014). Their products have been alleged as limited in use besides consumers felt that recent marketing was polarizing.

Key problems

The company has been challenged by manual ordering processes, unacceptable error rates, and high labor costs. The other problem is that the company has also been hurt by the weak overall momentum in the recent fiscal year that has led to a greater use of promotions as well as marketing schemes to incentivize consumer transactions, culminating in a sharply condensed level of operating profitability. According to the chief executive Robert Wallstrom, unless they make significant changes to their product offering as well as marketing initiatives, they should not anticipate the sales trends to improve considerably (Stair & Reynolds, 2015). The deprived sales and challenges the company is facing have led to cutting down the financial targets for the year. The company sees an income of $1 to $1.10 a share on net profits ranging from $510 million to $530 million, a new signal that both measures will turn down from the year-ago results. The gross profit for the recent year reduced from 10.3 percent to 71.9 million. This resulted in a gross margin rate of 55.3 percent compared to 58 percent of the previous year (Thompson et al., 2014).
Strategic issues to be addressed by the management

To counter the problems faced by Vera Bradley Company, the management has to make meaningful changes to their product offering besides marketing initiatives to attract more customers. The management also has to take a proactive stance in trying to revive the company’s fortunes. The company has to employ initiatives to restructure the business such as whittling down its wholesale partner network, a strategy that will hold the promise of improved profitability in the future (Stair & Reynolds, 2015).

Conclusion/Recommendations

For the company to lure more customers, it should find better ways of competing in the market with new brands since many of the buyers are associating it with its traditional design while there are other new designs in the market. The company should also incorporate improved marketing initiatives to ensure that the brands they make are available in the market. The success of Vera Bradley depends entirely on the strength of its brands and therefore, the company focus on improving on the brands to satisfy its customers.
References

Stair, R., & Reynolds, G. (2015). Principles of information systems. Boston: Course
Technology/Cengage Learning.

Thompson, J., Peteraf, M., Gamble, J., & Strickland, I. (2014). Crafting & executing strategy:
The quest for competitive advantage: Concepts and cases. London: McGraw Hill Higher
Education.