Ross Dress for Less: Applied Management Analysis
This paper presents an applied management analysis of Ross Stores, Inc. (Ross Dress for Less), examining how the company's leadership philosophy translates into concrete retail strategy. Drawing on customer relationship management (CRM) theory, the paper reviews Ross's company history, merchandising approach, pricing strategy, technology investments, and competitive positioning relative to rivals such as TJ Maxx. The analysis highlights how Ross targets value-conscious, middle-to-upper-middle-income shoppers through brand-name merchandise sold at significant discounts, a sophisticated buying and distribution network, and a clear regional expansion plan. The paper concludes by discussing emerging trends, including the planned launch of the dd's Discounts store concept aimed at lower-income households.
- Introduction and CRM Framework: CRM theory applied to Ross management philosophy
- Company History and Overview: Ross origins, growth, and off-price market position
- Management Formula and Customer Relationship Marketing: Discount formula, brand focus, and customer loyalty
- Competition and Merchandising Strategy: TJ Maxx rivalry, buying cycles, and store design
- Pricing and Technology: Low-markup pricing and satellite network investments
- Trends and Future Outlook: Store expansion and dd's Discounts launch plans
- Conclusion: Customer focus as Ross's enduring competitive advantage
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What makes this paper effective
- Grounds the company analysis in an explicit theoretical framework—Seybold's CRM model—before applying it to Ross, giving the paper academic structure rather than reading as a simple company profile.
- Integrates quantitative data (stock prices, market share figures, growth rates) to support qualitative claims about Ross's competitive position, adding credibility and specificity.
- Maintains a consistent analytical thread—customer focus—that runs from the introduction through each functional area (merchandising, pricing, technology) and into the conclusion.
Key academic technique demonstrated
The paper demonstrates applied theory-to-practice analysis: it introduces a management or marketing concept (CRM, personalized marketing, off-price retail dynamics) and immediately grounds it in concrete evidence from Ross's operations. This approach, sometimes called the "framework-then-application" move, is a standard technique in undergraduate business writing and case analysis.
Structure breakdown
The paper opens with a theoretical introduction defining CRM and stating the analytical goal. It then moves through a logical business-analysis sequence: company background → industry context → management philosophy → customer strategy → competitive landscape → functional areas (merchandising, pricing, technology) → forward-looking trends → conclusion. Each section builds on the prior one, maintaining coherence across a multi-topic business case.
Introduction and CRM Framework
Understanding how an organization works means understanding what truly motivates people. There are certain fundamental consistencies that form the foundation for the behavior of all individuals; these can be identified and then modified to reflect individual differences (Robbins, 2001). In this regard, the management at Ross has set a clear course for the company, one focused on providing its customers with a sense of value in their overall shopping experience.
Customer Relationship Management (CRM) is "a corporate philosophy because it is a fundamental approach to doing business. That approach is to be customer-focused and customer-driven, running all aspects of your business to satisfy your customers by addressing their requirements for products and by providing high-quality, responsive service" (Seybold, 2002, p. 3). The objectives of CRM are fairly straightforward (Seybold, 2002, p. 4): to acquire new customers, to retain the right existing customers, and to grow the relationships with existing customers. This paper illustrates these objectives being put into effective action through the management philosophy of Ross Stores, Inc.
Company History and Overview
From 1957 to 1982, Ross operated as a small, family-owned junior department store chain in the San Francisco Bay Area. In 1982, Stuart Moldaw and a group of investors acquired the six-store chain and converted it to the current off-price format. Ross Stores, Inc. went public on August 8, 1985. The company had 593 stores in operation as of April 3, 2004, compared to 524 stores at the end of the same period the previous year. The average new store utilizes approximately 30,000 gross square feet in a self-service format. Stores are conveniently located in community and neighborhood strip shopping centers in heavily populated urban and suburban areas.
Ross is an off-price retailer that offers "first-quality, in-season, name brand and designer apparel, accessories and footwear for the entire family at everyday savings of 20% to 60% from department and specialty store regular prices" (Ross Stores, 2004). Ross also offers substantial savings on a wide range of merchandise, including fragrances, home goods, bed and bath merchandise, and accessories.
The stock performance data below reflects Ross's strong market position at the time of this analysis:
Table 1. Stock Price & Volume (April 14, 2004)
Recent Price: $30.69 | 52-Week High: $32.86 | 52-Week Low: $17.90 | 52-Week Change: 66.4% | YTD Change: 16.0% | Average Daily Volume (Last 10 Days): 1,286,030 (Ross Stores, 2004).
Five years prior to this analysis, department stores held 21.5% of the retail market — a figure that fell to 18.7% in 2002, with some share shifting to discounters. Off-price retailers absorbed a substantial portion of that difference. Retailers such as TJ Maxx and Ross Dress for Less built their own distribution and sourcing networks, a move that permitted them to expand nationally. Special merchandise is now made exclusively for off-price merchants, helping to keep their inventories consistent (Forbes, 2004). Off-price retailers grew at a compounded annual rate of 6.5% between 1998 and 2002, while the U.S. apparel market as a whole shrank by approximately 15%. The off-price market segment accounted for around $13.7 billion of the $162.7 billion apparel market in 2002.
Unlike department stores, off-price retailers take limited fashion risk, minimizing their markdowns and offering more stable gross margins. This market segment has also begun attracting more upscale clientele — customers who have shifted at least a portion of their apparel spending away from department stores. Notably, more than half of all off-price shoppers earn more than $49,000 annually (Forbes, 2004).
Works Cited
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DiCarlo, L. (2003). Ross Stores Booms from Bargain Hunting. Retrieved April 15, 2004, from Forbes.com Web site: http://www.forbes.com/2003/12/11/cx_ld_1211overachievers.html
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Reuters.com. (2004). Full Company Overview for ROST. Retrieved April 15, 2004, from Yahoo Investors Web site: http://yahoo.investor.reuters.com/FullDesc.aspx?target=/stocks/quickinfo/companyprofile/fulldescription&ticker=ROST.
Robbins, S.P. (2001). Organizational Behavior: E-Business Updated Edition. Upper Saddle River, NJ: Prentice Hall.
Ross Stores. (2004). Retrieved April 15, 2004, from Ross Dress for Less Web site: http://www.corporate-ir.net.
Seybold, P. (2002). An Executive's Guide to CRM: How to Evaluate CRM Alternatives by Functionality, Architecture, & Analytics. Retrieved April 15, 2004, from Patricia Seybold Group Web site: http://www.psgroup.com/freereport/imedia/report.asp#WhatIsCRM.
Steen, M. (2002, December 31). Bargain Hunters Help Ross Buck the Market. Mercury News. Retrieved April 15, 2004, from SiliconValley.com Web site:
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