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When strategy pales: Lessons from the department store industry

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  • Johnson, Homer H.
  • Kim, Sung Min

Abstract

The traditional department store was clearly the center of retail activity in cities and small towns in the United States during the first half of the 20th century. However, by the late 1970s and beyond, the department store industry began experiencing financial problems, and serious questions were being raised as to whether their demise was eminent. This article traces the evolution of the industry, and explores some of the underlying dynamics for the changes in the retail trade sector, including the emergence of new alternative retail formats, such as discount stores and category killers. This study further explores the major strategies used by the leading traditional stores with reference to new industry life cycle models and a strategic positioning framework. Of particular interest is the discussion regarding: Were the traditional department stores "locked in" to a declining trajectory? How effective were their strategies to counter the decline of the industry? And what were and are the repositioning options available to the traditional department stores?

Suggested Citation

  • Johnson, Homer H. & Kim, Sung Min, 2009. "When strategy pales: Lessons from the department store industry," Business Horizons, Elsevier, vol. 52(6), pages 583-593, November.
    • Handle: RePEc:eee:bushor:v:52:y:2009:i:6:p:583-593
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    References listed on IDEAS

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    1. Richard A. Bettis & C. K. Prahalad, 1995. "The dominant logic: Retrospective and extension," Strategic Management Journal, Wiley Blackwell, vol. 16(1), pages 5-14.
    2. Neumann, Todd C., 2008. "Automobiles, the Mass Market, and the Retail Revolution of the Early Twentieth Century: A Structural Analysis of Changes in American Retail Institutions, Market Power, and Labor Demand," The Journal of Economic History, Cambridge University Press, vol. 68(02), pages 591-594, June.
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    1. Mennecke, Brian E. & Peters, Anicia, 2013. "From avatars to mavatars: The role of marketing avatars and embodied representations in consumer profiling," Business Horizons, Elsevier, vol. 56(3), pages 387-397.

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