1. Steve and Barry's was an apparel retailer that experienced tremendous growth in the mid-2000's. If a firm's profits can be defined as (P - AC)*Q, where "P" refers to average price, "AC" refers to average total cost, and "Q" refers to the number of units sold, how did Steve & Barry's achieve their success (in terms of these three variables)? That is, which elements of this expression were the key drivers of their strategy for profitability, and in what way did they affect profits?
2. Which strategic choices (if any) of Steve & Barry's expansion strategy were compatible with how they achieved their initial success? Which strategic choices (if any) were incompatible? Explain.
3. Are there elements of Steve and Barry's strategy that would be less effective today than they were in the mid-2000's? Please explain, relating your answer to how these choices would affect Steve and Barry's profits.
4. If you had to make a recommendation about acquiring Steve & Barry's at this point in time, do you believe that under different management, it could see a return to profitability? If so, what changes or points of emphasis would you recommend new management? If not, why not?