Fashion Business Strategy for Mulberry
Business strategy is something that gives new dimensions to the operations of a company and facilitates to improve the market position as well. The business strategy has huge role in determining the success parameters for an organization in globalized business environment. Here in current scenario the special emphasize has been laid down on various kinds of business strategies that could help a company to grow and develop their business. The strategic planning has been described in an appropriate manner (Jeffs., 2008). Further various strategies with reference to future changes have also mentioned within the study. To understand the various concepts and terminologies of business strategy the example of Mulberry have been taken into special consideration.
1.1 Asses how business missions, visions, objectives, goals, core competencies inform strategic planning with reference to Mulberry.
The vision of the Mulberry is to improve their market share and mission is to establish their brand name as a leading brand in the segment of luxury market. These mission and vision statement suggest the strategic planning at very large scale. As in current scenario the Mulberry is aiming at become the apex brand in the segment of luxury items and products. So the innovation is something that could be reflected within the strategic planning phases of Mulberry. Without innovation the luxury products or items could never be produced. Thus the innovation could inform the innovation as major objective for Mulberry (London, Hart and Kacou, 2011). Ahead under the strategic planning the special emphasize could lie down upon the manufacturing of quality items. The strategic planning suggests that the quality should be on the priority list of cited organization else the business can never be sustained in the luxury market segment. Therefore quality is another business objective for the mentioned business entity. Further the core competency strengthens the strategic planning. For instance, if any organization has financial stability and it has become their core competency that they can invest freely into any project. Thus it enables to plan business decisions strategically. Above scenario state that the Mulberry is targeting the luxury segment of customers hence the strategic planning could affect the marketing mix strategies as well. Accordingly the marketing mi strategies could be designed as per the fundamentals of luxury market segment (Marchington and Wilkinson, 2008). Thus the strategic planning is highly affected by the business mission, vision, goals and core competencies. After gaining knowledge about these elements the intellect about strategic planning of any business could be developed.
1.2 Analyze the factors that have to be considered when formulating strategic plans with reference to Mulberry.
- There are various factors which are required to be considered while focusing upon the formulation of strategic plans. In case of Mulberry the priority could be given to above mentioned elements as it clears the intentions of higher authorities. Without formulating the business mission and vision statement along with objectives, it is impossible to formulate the strategic plans. It set the direction for company and determines future course of action. Thus the business objectives must be considered on the priority basis (French, 2011).
- Market situation is another very significant factor that must be considered for the purpose of formulating the strategic plans. The market situation involves the globalization, dynamism, intense competition and other environmental factors. These aspects could help Mulberry in understanding the business trends within the market and accordingly the appropriate strategic plans could be designed.
- The customers and their buying behavior must be assessed separately and must gain proper consideration. The customers and their habits could play immense role in strategic planning. By reading the mindset of customers the Mulberry can design their product line and other strategies as well (George, 2003).
- While active in luxury segment the Mulberry should be clear with the latest fashion trend so the industrial standards and competitor’s strategies are required to be assessed by formulating strategic planning.
- The analysis of internal environment like availability of fund, technical advancement, potential of human resources etc. these are certain other elements which must be considered to reach at outcome of strategic plans. Proper resources availability is required to compete at international level and to deal with luxury segment of market.
1.3 Evaluate the effectiveness of techniques used when developing strategic business plans using examples from Mulberry.
- The strategic planning techniques are immensely beneficial which could be used by Mulberry to develop strategic business plans. With the help of benchmarking the company can set the higher standards for themselves and it could motivate employees to put their efforts to achieve the benchmark. It could be set through past performance or on the basis of competitor’s performance. Over the benchmarking technique is sufficient enough to stimulate the staff people (Blumentritt, 2006).
- SWOT analysis is another technique which inform about the strength, weakness, opportunities and threats for the company. After applying the SWOT technique the Mulberry could become familiar with the available opportunities and can utilize their strength to avail the opportunities and minimize the threat levels. Further the weak aspects could be eradicated through strategic business plans. Thus in order to gain hold on overall business activities the SWOT technique could be effective and result oriented.
- BCG growth matrix is equally effective in supporting the strategic business plan for Mulberry. The BCG matrix provides information about the positioning of the products within the market. The results of BCG matrix could help immensely in identifying the performance of product line and accordingly the changes could be done in strategic plans. The most effective result of BCG growth share matrix is that it supports the product mix element of marketing strategies. The decisions of Mulberry related to the flow of money into project could be identified and accordingly further business strategic plans could be constructed (Cole, 2003).
2.1 Analyze the strategic positioning of a given organization by carrying out an organizational audit in Mulberry
The organizational audit is a technique in which the internal assessment of the organization took place. Its strength, competitive advantage, weakness and opportunities along with threats available in market come into existence. The organization audit could be done with the help of SWOT analysis. Here the organizational audit has taken place with relevance to the Mulberry.
- The major strength for the company is that they are clear with their objectives and business segment.
- From last two years continuous profits has been noticed. However the profit ratio is comparatively low but Mulberry manages to gain profit.
- International expansion is another strength which could allow them to improve their understanding about world market (Halbert and Ingulli, 2014)
- Better investment program as Mulberry invested in all three areas with £8.8 million in capital expenditure spent on stores, £4.4 million on Mulberry UK factories and £2.9 million on IT systems.
- Inventory is increasing for the company which increase their cost structure
- UP market ambitions have become major weak aspects
- Unfocused business approach
- Very high prices as compare to their brand reputation
- Basic earnings per share for the year decreased by 27%
- Mulberry could re brand their name and product line
- Could focus on new market development
- More expansion of business
- Diversification into new segment of products
- Intense competition from Burberry and Gucci
- Less entry restrictions within the industry
- Increase market share of Bottega Veneta and Celine (Hamilton and Webster, 2012)
- Frequent technological changes
2.2. Carry out an environmental audit for a given organisation Mulberry
The environmental audit is the technique in which the external environment of the company studied by the higher authorities in order to formulate the strategies. The PESTLE analysis could be implemented for the same purpose.
Political environment: While moving out the domestic country the Mulberry could get the advantage of less entry restrictions. Above it has been treated as threat for them but in international market it could turned into advantage as the Mulberry can untapped the Asian market easily. Further the tax structure is also not very high on apparels industry.
Economic environment: The cited company is dealing in luxurious segment of fashion industry where the people have capacity and willingness to buy such products. But the product price is very high that could go against the Mulberry.
Social environment: People have started to buy luxury brands even the upper middle section can also afford the branded apparels. Thus it indicates towards the market development and change in market trend for Mulberry (Hamilton and Webster, 2012).
Technological environment: With respect to apparels industry the machineries and equipments have become advanced. Mulberry is already investing in adopting new technology but continuous improvement is required. To manage the supply chain and inventory management the help of ERP, MIS and other databases system could be taken by Mulberry.
Legal environment: It is not very strict for Mulberry. They need to follow the tax related legislations, competitive policy, health and safety policy, European Union policies etc.
Environmental factors: It involves the highly nature oriented business approach. The threads, raw material, dumping of wastage and utilization of natural resources must be done in most intelligent way. Thus these are certain outcomes of environmental audit for Mulberry (Halbert and Ingulli, 2014).
2.3 Asses the significance of stakeholder analysis when formulating new strategy Mulberry
Stakeholder analysis is also known as stakeholder mapping which allow understanding the role of stakeholders within the decision making of new strategy formulation. Accordingly the Mulberry can prepare strategies to convince them for the new strategy. The significance for the stakeholder analysis is immense in the process of new strategy formulation. Mulberry needs to understand that they work for the satisfaction of stakeholders only and the support and consensus of stakeholders is needed at every stage of new strategy formulation (Barney, 1991). Thus the major significance of stakeholder analysis is that it helps on the ground of increasing the satisfaction level of stakeholders. Another significance of analysis is that the competency of employees could be identified. It is clear that the success of every strategy is dependent upon the potential and capacity of employees only. Thus with the help of stakeholder analysis the Mulberry could become clear with the skills set of employees against the possible new strategies. Accordingly the decision making could be improved at very large scale. Ahead the stakeholder analysis also includes the study of mindset of customers as well. Through stakeholder analysis the intellect about recent trends in the market could also be assessed properly. The need and demand of customers could become clear through stakeholder analysis. With the help of stakeholder analysis the positive responses from shareholders and investors could be gained. The financial requirement could be fulfilled if the shareholders found the new strategies lucrative and beneficial for the Mulberry and its business (Faucheux and O’Connor, 1998). The confidence of managers and board of directors could also be developed through stakeholder analysis. Legal policies and restrictions, if any, could also be identified easily. Hence the support is major significance of stakeholder analysis that could be availed by Mulberry.
2.4 Present a new strategy for given organization.
To propose new strategy for Mulberry the Ansoff Matrix could be implemented in current scenario. The new strategy for Mulberry is that they need to focus upon the market development and product development strategy. There is need of identifying the new market where the customers could be captured or acquired by Mulberry. It is highly essential to understand that the market development always demands huge investment but if strategies are implemented properly then the Mulberry can improve their revenue generation capacity. Further the product development is essential for Mulberry as they are active into the luxury market segment so fresh product line is required on the regular basis (Fernando, 2011).
With respect to support the product development strategy the porter’s generic strategies suggest the differentiation strategy which could be ideal for the Mulberry. In the strategy of differentiation the Mulberry can introduce some attractive and appealing elements which must be new and experienced for the first time. They have competition from high luxurious brands that can put adverse impact at the same ratio of Mulberry (Daily and Huang, 2001). Thus through differentiation strategy it could be possible to surpass the competitors and unique branding could be established. It is suggested to Mulberry that the differentiation could be introduced in product line through innovation. As mentioned within case study that the impact of Mulberry is low at the mindset of customer as compare to its competitive brand. Therefore the differentiation strategy could result gaining the competitive advantage and ensuring the development of unique brand identity. Most importantly the strategy of product development could be strengthened through differentiation strategy.
(Source: Trott, 2008) )
Task 33.1 Analyze the appropriateness of alternative strategies relating to market entry, substantive growth, limited growth or retrenchment for a given organization Mulberry.
The alternative strategies are very much helpful with a view of providing opportunities to get additional solutions for the business challenges and problems. The market entry strategy is very much effective or appropriate with a view of developing the market. With the help of market entry the market share could be increased as it provides chances to capture more number of customers. The techniques for the market entry strategy are joint venture, franchising, merger and acquisition etc. It is something that could be helpful immensely on the ground of supporting the business operations by fostering international expansion (Fernando, 2011).
Ahead the substantive growth could be ensured through effective diversification and integration strategies. To cut down the cost the horizontal or the vertical integration could be put into practice by Mulberry. They can manufacture the raw material rather than acquiring it from outside suppliers. Further the distribution channels could also be established by Mulberry only. So the substantive growth has direct relationship with the increment in company’s operations. Ahead the diversification is related to increasing the product line through entering into new range of product or to another kind of products. The Mulberry can start to target middle section as well by diversified into manufacturing of low priced apparels (Vieceli And Valos, 2000).
Ahead with the help of limited growth strategies the company can handle the adverse business situations. At this time the existing str4atgies could be applied and the existing market could be penetrated by the Mulberry. It could be done in the situation of low profitability, losing market share and financial loss suffered by any organization. The option for limited growth is innovation, market development and product development. The major appropriateness of such kind of strategies is that it provides change to understand the market trend and most importantly the competitor’s strategy and plans could be identified (Vieceli And Valos, 2000).
At last the alternative strategies include the retrenchment strategy which could also be effective with a view of dealing with adverse business situation. The retrenchment strategies could be implemented when certain products of the company are not doing well within the market. Here company can adopt the strategy of divestment and liquidation and turnaround strategies. Appropriateness of retrenchment strategies is that it helps in managing the resources, meeting out the expectations of customers and ensuring the cost efficiency.
3.2. Justify the selection of a strategy for Mulberry
As per the case study it has been found that the Mulberry is doing well into the market but it is not up to the expectations of company. Their growth rate is good but not tremendous thus they need to relook their business decisions and various aspects of business so that the strategic plans could be designed in most appropriate manner. Here the selected strategy is growth limited strategy where the special emphasize has been laid down on the product development and market development. With the help of these strategies the Mulberry can focus on both customers and competitors. It could make their business approach more focused. Further another reason behind limited growth strategies is that the company can get chance to resolve their current business issues (Bosch, 2002). Other than this the list of justification involve that the cited company can provide new products line of apparels and accessories to the customers. It is fundamental principles for the success of luxurious market segment that the product line must be fresh and new for all the time. Ahead the element of differentiation could strengthen the product development strategy. The alignment could be making between these two aspects of different strategies. The money could be invested to improve the existing manufacturing quality rather than focusing upon other investment opportunities. It has been found through case study that by investing into international outlets the profitability, Of Mulberry, goes down and it diverts the actual focus of company. Overall the major justified reason is that through limited growth strategies the Mulberry can concentrate on actual business and it is compatible to their business size and structure as well (Hezri and Dovers, 2006). Hence the selected strategies for Mulberry are justified and feasible with growth and stability point of view.
4.1 Asses the roles and responsibilities of personnel who are charged with strategy implementation at Mulberry.
Mulberry need to understand that the experienced people should get the responsibility to implement such strategies within the organization. It is high required that the experience of old employees must be prioritized by the Mulberry. The major roles and responsibility of personnel’s is related to communicate the strategies to the related department so that the proper steps must be taken by the departments. The personnel must be clear with the reason behind the strategy as it could be helpful in convincing the staff in appropriate manner. The proper and effective communication can help immensely on the ground of disseminating the actual or revised mission, vision of the Mulberry. It is a responsibility of personnel to ensure the involvement of maximum number of people towards the strategy implementation process and for the same purpose the communication process could be helpful (Ubeda and et.al., 2013).
Ahead the roles and responsibilities include the arrangement of all the required resources that can help in implementing the strategy with fewer obstacles. It is something that could be immensely beneficial on the ground of facilitating various departments to continue with new strategy. The allocation and distribution of resources must be proper as it could help in implementing the strategy within stipulated period of time. Mulberry should have access to all the resources as per the formulated strategies.
The personnel have the responsibility to ensure the continuous monitoring of the strategy implementation process. It is essential at very large scale that the personnel should keep track for all the activities and progress must be recorded in an appropriate manner. It could help in assessing the actual growth and results of implemented strategies. Thus these are major roles and responsibilities of personnel that must be fulfilled in effective way (Ströh and Jaatinen, 2001).
4.2 Analyse the estimated resource requirements for implementing a new strategy for a given organisation for Mulberry.
In order to implement the strategy for market development and product development there could be need of certain resources that can help in continuity of business activities. Without adequacy of resources it is not possible to focus upon the effectiveness of strategy implementation process.
Raw material: It is one of the major resources which are required to produce the fashion apparels and accessories. With proper raw material the Mulberry could not produce new kind of items to the customers. Thus the raw materials should be available in adequate quantity. The material should be of highly superior quality so that the luxurious market segment could be justified (Thomson and Hecker, 2000).
Technological resources: It includes the machineries and equipments with the perspective of manufacturing the clothing items and other products sold by the Mulberry. The highly advanced equipments could allow them to maintain the class of manufacturing and most importantly the time and money could be saved. To implement the new strategy the investment must be made on acquiring the updated technology so that fine stitching could be done on clothes.
Financial resources: It might be required just for acquiring the raw material and buying the machineries, paying the salaries for staff, maintenance etc. thus without adequacy of the financial resources it is not possible to implement the strategy. The financial resources could help immensely in gaining the expected and positive results. Further these resources could help in bringing the stability in business activities and operations.
Human resources: At last the most significant resources which must be taken into special consideration by Mulberry are human resources. They must be innovative and creative. Their attitude must be positive and disciplined. The competency of human resources must become the identity and strength of Mulberry (Sharp, 1991). They must have potential to design such products which automatically help in achieving the strategy of market development. Hence these are certain resources which must be required for the purpose of implementing the new strategies in Mulberry.
4.3 Evaluate the contribution of SMART targets to the achievement of strategy implementation in a given organization Mulberry.
In Mulberry the SMART targets could help in achieving the objectives in planned manner. The SMART targets are set parameters which ensure the movement of company into certain direction. The description of SMART targets is as follows:
‘S’ stands for the specific targets which is the increment in the market share and profitability for the Mulberry. The cited organization is committed to increase their market share with 5 % in every quarter.
‘M’ stands for the measurable targets that have been set by Mulberry. It includes that 5 % increment in market share in measurable in numerical terms even by measuring the profitability or by counting the number of items sold by company (Rafinejad, 2007).
‘A’ stands for the targets which are achievable. It is clear that if the above strategy has been implemented in an effective way than this target could be achieved in effective manner. The Mulberry can definitely get the expected results out of the selected strategies.
‘R’ stands for the realistic target. It is clear that the objective that has been set by Mulberry is realistic. There is no unrealistic claim done by the company with respect to increase the market share by 5 %.
‘T’ stands for the time bound approach of the Mulberry with relevance to SMART targets. It is clear that the here the time band is on the basis of quarterly assessment. The set targets could be revised after the 2 years if every quarter successfully delivers the 5 % increment in market share. Thus these objectives can help in avoiding the slowdown in business of Mulberry (Rafinejad, 2007).
With the help of above report it has become clear that the business strategies is very crucial element that affect the future growth rate of business/ mulberry need to focus on their strategic business plan in an appropriate way. The major learning of the study is related to gaining the knowledge about factors which must be considerable in strategic planning. Further the role strategic planning technique like BCG matrix, SWOT analysis, benchmarking techniques has become clear with the help of above study. Further the resources that can help in implementing the strategies have also become clear. Another learning of the study is highly relevant to the application of various alternative strategies in order to improve current market positioning of Mulberry.
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