CASE 21 Harry Rosen Last Tuesday morning you went with your boss to a breakfast meeting sponsored by the CPAs of Ontario. The purpose of the meeting was for CPAs (like your boss) to encourage prospective new members such as yourself to become CPAs. To encourage a turnout, there was a speaker, Mr. Larry Rosen, the CEO and president of Harry Rosen Inc. Larry started with the following statement: We don't perceive ourselves as being in the clothing business. We don't just sell suits and sport jackets. It's a relationship~based business. My business is to get to know you, to have you build a relationship with one of my highly trained associates. I want to be your clothier for life. The whole key to our business is loyal clients. I strongly believe we have a corporate culture that has a love of quality and a love of clients. And building customer relationships is a managed process. Larry's opening comments made you think of what you had read the previous night, when you had Googled \"Harry Rosen\". The company Harry Rosen was started 54 years ago by Harry Rosen, the father of Larry Rosen. Website for Harry Rosen Inc. Harry Rosen Inc., a retailer of some of the most powerful brands in quality mens- wear, has built itself into a powerful national brand. That brand is based not simply on what it sellsbecause styles and designers change and fall in and out of fashion but in how it sells. The brand provides a service promise to its customers, and this promise has been used effectively as a marketing and sales strategy to communi- cate the company's value proposition. The Deloitte perspective The Harry Rosen chain is using [customer relationship management] technology the way it's supposed to be used, by creating an electronic concierge. What the company has been able to do is take what Larry Rosen's father used to do From Gary Spraakman, "Current Trends and Tallitions in Management Accounting Case Analysis, Be". One-time pennission to use is granted to University of Guelph. ACCT 4230. for Winter 2017 Term. Captus Press Inc. All rights reseweci. CASE 21: HARRY RossNr9l personally for a much smaller client base and use technology to do the same thing for a much larger one. Ken Wong, Associate Professor of Business and Marketing Strategy Queen's Schoorr of Business You have known Harry Rosen Inc. as an upscale men's clothing retailer with a relentless focus on the customer experience. You did not think you were old enough, as you had always considered Harry Rosen Inc. to be an \"old man's\" clothier. How- ever, with Larry's statistics that the average customer was male and 39 years old, you now think you may have been wrong, and perhaps you are ready to be 3 Harry Rosen Inc. customer. Larry spent about 45 minutes describing his company. It had been established by his father Harry and his uncle Lou in the Kensington Market area of Toronto with just $500 in startup capital. Although men's wear was, and remains, a highly competi- tive business, Harry managed to make his firm stand out by establishing it in the minds of customers as a place where they could get their fashion questions answered. Larry said men are reluctant shoppers, and thus helping men purchase clothing was the way in which the company created a relationship. The focus of the relationship between associates (sales employees) of Harry Rosen Inc. and customers was on creat- ing a confident image for aspiring customers. The relationship was developed through advice, trust, and continuity. Harry Rosen Inc. has luxury stores. Presently, there are 16 stores across Canada and 700 employees. Traditional financial performance measures, such as sales growth and protability, are important. Information technology is also important at Harry Rosen Inc. for two reasons. First, executives and buyers at Harry Rosen use data- analysis tools from Cognos Inc. built into a GERS Inc. merchandising system. The system offers more than a dozen sales and inventory reports for analyzing sales and helps the company identify sales trends, manage inventory, and calculate gross prot margins. Second, Harry Rosen Inc. uses information technology to maintain detailed customer information to better serve customers. Harry Rosen Inc. has managed to become a household name in Canada, partly through the use of creative advertising to promote awareness and to cultivate a luxury image. One recent example is the company's teaming up with the Princess Margaret Hospital to promote a charity run for prostate cancer treatment. This has created sub- stantial positive exposure in the Toronto market. There are plans to expand this char- ity run to other Canadian cities. Larry Rosen also mentioned that the company hires for attitude and trains for skills. The advertisement depicted in Exhibit 1 attests to the importance of attitude and skills. After Larry Rosen's presentation, you and your boss talked to him about the use of management accounting. Larry Rosen said that the management accountants were considering implementing a balanced scorecard. Your boss said that you had developed a balanced scorecard. Larry Rosen asked you what you would suggest for Harry Rosen Inc. in the way of a balanced scorecard. From Gary Spraakman, "Current Trends and Traditions in Management Accounting Case Analysis, Be". One-time permission to use is granted to University of Guelph. ACCT 4230. for Winter 2017 Term. Captus Press Inc. All rights reserved. 92/SECTION II: MANAGEMENT ACCOUNTING CASES Exhibit 1 Harry Resell Advertisement POSITION: Shoe Specialist Associates (Full Time) REPORTS TO: Store Manager LOCATIONS: Sherway Gardens, Etobiooke, 0N and Yorkdale Shopping Centre, Toronto, ON MAIN RESPONSIBILITIES: To achieve and exceed sales and productivity standards Clientele development with respect to relationship selling in the Shoe Department Assisting in the maintenance of the Harry Rosen store image, in the Shoe Department and Stockroom inventory management Providing superior standards of service to all mistomers Provide feedback regarding Shoe Assortment and Selection Support with the Marketing and Product Knowledge Training QUALIFICATIONS: Strong commitment to achieving excellence in the area of customer service Strong interpersonal skills Strong communication skills Professional attitude and appearance Footwear experience in retailfhigh-end sales preferred From Gary Spraakman, "Current Trends and Traditions in Management Accounting Case Analysis, Be". One-time pennission to use is granted to University of Guelph. ACCT 4230. for Winter 2017 Term. Captus Press Inc. All rights reseweci