1) The Men’s Wearhouse is in “a declining industry” because the apparel retail industry had bad times while the company flourished and increased sales as well as the number of stores. In 1990s, the industry was declining, and many competitors of The Men’s Wearhouse were forced to fire many employees and close stores, or refuse from opening new stores. In general, sales were declining. Nevertheless, in that period, The Men’s Wearhouse was successful, and it managed to open new stores and increase sales. The company managed to do that due to its unique business strategy, in particular, its servant leadership philosophy and great attention to employees and customers. For instance, the net sales of The Men’s Wearhouse rose from $133 million in 1991 to $483 million in 1996.
2) a. For The Men’s Wearhouse, the most essential value-creating activities from the value chain are operations, sales and marketing and servicing. Marketing and sales together with servicing are primary activities that create value because they provide advantages to the company that add value to its operations and products. Sales and marketing are primary activities because The Men’s Wearhouse pays much attention to its customers, and they are almost as important as its employees for the company. Thus, this activity creates much value for customers. Servicing is also a primary activity that creates value because the company pays much attention to education and training of its employees, and in its turn, training helps to improve employees’ skills who satisfy all customers and create great value for the company. Operation activity is secondary in creating value. The quality of goods is high and customers trust it, but it does not seem higher than the competitors’ quality. High quality of products creates lower value compared to the skills of employees and the quality of services for customers, but it is still important for customers.
b. Tangible resources of The Men’s Wearhouse include its products and physical stores. They provide competitive advantages, because products have high quality, and stores are located all over the U.S. in different cities to satisfy customers’ needs. Intangible resources include a brand that is trusted by customers for high quality of products it represents. Capabilities of the firm include its unique philosophy and management system, great attention to employees and customers, and training of employees to improve their skills. All resources and capabilities are potential source of sustainable competitive advantage, as they fit four qualifications (valuable, rare, inimitable and non-substitutable). All resources and capabilities are valuable as they create additional value for the firm. Employees’ skills are rare, inimitable and non-substitutable due to unique training program that is hard for competitors to be copied or replaced with something else.
3) First, The Men’s Wearhouse should try expanding abroad. The company has some unique features that are not represented by the domestic and foreign firms. The unique philosophy and employee training will provide great advantages in different markets, because customers will be satisfied and are likely to visit the firm’s stores again. Second, it will be positive to make the assortment wider. It is necessary to focus more on accessories, shoes, bags, sunglasses and other goods. Due to that, customers will be able to buy more goods they need in a single store, and they will be likely to do that due to convenience of choosing fitting accessories with a purchase at once, as well as good service. Third, it is positive to make the hiring process of top managers and executives more transparent, because the presence of several relatives among executives may seem unfair to employees, shareholders, partners and the community.