Introduction to Business Strategy
As stated by Scholes and Johnson (2005), Strategy is the scope and direction of a company over the long run that seeks to tie its resources with the environmental changes, particularly with its customers, clients or markets for fulfilling stakeholder’s expectations. The successful business strategy must be in harmony with organization’s external and internal environment. The business strategy offers differentiation, excellent values and core competencies for the firm. Here, in this regards the process used by Mulberry for planning and implementing strategy to achieve its business goals is being defined. To gain deep knowledge into the subject, the planning process issues and techniques for developing valuable strategies is discussed. Moreover, an organizational and environmental audit is being undertaken for determining available factors plus resources for the company to implement its strategy. The limited and substantive growth strategies will also be identified by such audit. Finally, the report is ending by defining responsibilities and roles comprised in the implementation process at workplace.
How missions, visions, objectives, goals, core competencies inform strategic planning
Mission – This statement is a commitment or function, which a company desires for fulfilling stakeholders expectations (Botten, 2009). The mission statement of Mulberry is to maintain vitality and integrity of its brand and at the same time develop business that remains appropriate to ever evolving tastes of customers and markets.
Vision – It defines fascinating and vigorous outlook for the organization in future (Vaatanen and et.al., 2008). The vision statement shows potential benefits and growth of firm to the stakeholders and investors. Mulberry’s vision is to simplify the undertakings of business and deal with experiences staff who can create the Mulberry brand in their local markets.
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- Delivering the orders as fast as possible
- Providing maximum satisfaction at affordable rates
Goals and objectives – These are the specific outcomes that business strive to accomplish in particular time period. Objectives of Mulberry is:
- To create awareness of its luxury brands internationally;
- To provide money value to customers;
- To increase the percentage of sales.
Core competencies – These are special factors with which an organization gains some differences among competitors (Buul, 2010). The Company’s digital strategy is the competitive edge over its rivals. Mulberry has developed partnership with Google to support in delivering its marketing campaign. There is no doubt that Mulberry is the best example of luxury brands, which has wrap the digital channels as a manner of conveying unique experiences. High quality experiences and services has built high satisfaction and loyalty of customers towards the offerings of company.
Factors to be considered while developing strategic plans
In order to prosper and grow, the manager of any organization should be capable to recognize, anticipate and deal with external and internal environment changes. Changes are inevitable and due to this business leaders should engage actively in the procedure, which determines change as well as modifies activity of company to take best advantage of it. This procedure is referred to strategic planning (Campbell, Edgar and Stonehouse, 2011).
Mulberry like all other businesses have an external and internal environment. The internal environment is linked with company’s human resource and the way in which individuals perform their activities in accordance with overall mission of business. To some level, the management can change or control internal factors in planning procedures to increase their effectiveness to contribute in implementing decided strategies (Chang, 2005).
On the other side, external environmental factors is not controllable. Hence, the manager at Mulberry have no adequate control over its competitors, law changes and on general conditions of economy. But there are some controlling measures that can be adopted by company to actively react to external environmental changes. Here, the main issue for manager is to make early respond to the changes that depends upon how soon a particular change is identified. For instance, management executives at Mulberry can view daily conditions of economy in media and develop their plans accordingly (Easey, 2009).
Besides above, the fashion industry is growing rapidly and the new entrant’s threat is more important to consider by Mulberry while developing business strategies. Even though, there are many barriers to make entry into the sector like fast changes in the apparels, huge investment and thus it becomes difficult to make competition with existing fashion firms. However, customers may attracted with less prices and compromise for brands, if some new entrants encourage them with their unique offerings at low rates. Hence, the company cannot ignore the new entrant’s threats and require to adopt its strategies plus offerings to remain competitive in the market.
Additionally, the main aim of any business is to keep customers and they organize their delivery system around the buyers needs. It means that Mulberry should design customer driven strategy by putting buyers at the heart of business. In this regards, market research can be done to create customers profile for determining their needs. Such profile will exhibit their purchasing behaviour including when they buy, how they buy and what they buy.
Effectiveness of techniques used when developing strategic business plans
There are various techniques that can be applied for developing different strategic business plans which depends on nature of circumstances.
BCG Model – BCG model also known as BCG growth-share matrix, which is inspired from product life cycle theory and is applied for deciding on product portfolio priorities of the business unit in the company. Mulberry required to have product portfolio such that it should include both high growth and less growth products and services that can generate sustainable revenue as well as long term value for the firm. Additionally, the matrix has two dimensions, viz growth as well as market share. The underline philosophy of the model is that greater market share will result in generation of more cash which is the best scenario in the market for the company (Eyceoz, 2009).
PIMS – The Profit Impact of Market Strategies (PIMS) is a comprehensive, long-term study of the performance of strategic business units of a company. The objective of PIMS is to emphasize relationship between major strategic decisions of the company and their positive results by analysing the market effectiveness and impacts. The effects can be as follow:
- Competitive position
- Strategic works
- Budget allocation
- Production process facility
- Operating outcomes
- Type of business environment
SPACE (Strategic Position and Action Evaluation Matrix) – This matrix main concern is to act according to prevailing demands in the market, which helps in present position of company in the marketplace and in executing relevant steps for the improvement of productivity. For instance, Mulberry Group Plc is having strong position in the market of UK where aggressive methods can be applied by its management to capture the competitor’s market share that also supports in determining strength, weakness, opportunities and threats of company (Flood and et.al., 2000).
Organisational audit of Mulberry
An organizational audit of Mulberry Group Plc can be done through SWOT analysis, which is an integral part of firm’s strategic plan. The particular audit gives all around outlook of company’s current and future situations (Gershon, 2013).
Environmental audit of Mulberry
An environmental audit can be done through PESTLE analysis, which include the following factors:
Political – Issues like wars, unemployment and global warming always affect the operations of Mulberry. For instance, global warming has led the organization to switch its renewable sources of energy, decrease the use of chemical in production and lessen their carbon footprint (Kozami, 2002).
Economical – These issues change the general purchasing habits of buyers. For instance, rise in VAT and recession has made clients more hesitant to spend their money on luxury goods. Moreover, there is less disposable income with people, hence Mulberry aim to market penetration for boosting more customers spending (Slater and Olson, 2001).
Social – It influences what is demanded by customers from an organization. For instance, increasing awareness of customers regarding environment, cultural change and animal welfare as well as rising ethical fashion demand has affected Corporate Social Responsibility of Mulberry (Lundström and et.al., 2013).
Technological – This advancing continuously that means a firm is required to advance its operations with it to beat rivals. Due to this, Mulberry have taken technological opportunities by updating social networking sites, blogs, creating iPod aps, using e-marketing and developing interactive website to better engage with customers (Raps, 2005).
Environmental – Due to growing environmental concern, the company is making more environmental friendly outputs for sustaining customers’ demands. Mulberry is also taking necessary actions to reduce waste and lessening carbon footprints by effectively utilizing UK factories (Pirraglia, 2014).
Legislation – The retailer always required to be aware with latest legislations for drawing right business strategies or policies. Legislation in corporate world include equal opportunities and rights, employee’s data protection and not using fabrics made of animal skin.
Significance of stakeholder analysis when formulating new strategy for Mulberry
Stakeholder’s analysis is the process of evaluating stakeholder’s attitudes towards business undertakings. Generally, this type of analysis is take place at the phase of project preparation to consider the partners attitude in relation to possible changes. It can be done regularly or once in a year for assessing stakeholder’s preferences towards strategic changes in the organization (Pangarkar, 2011). The main objective behind such analysis is to create effective cooperation in between stakeholders and project team as well as to attain possible successful results for a particular project. The stakeholder analysis is very essential before initiating a new project or predicting results or implementing new strategy in an organization. Also, it is significant to determine each stakeholder with an aim to identify their criteria for success and turning these into quality objectives (Riley, 2015).
Moreover, in the present era of business, the particular analysis is getting more significant, as customers, employees, communities and business partners can affect the firm’s growth plus it’s working. Hence, Mulberry is required to identify every stakeholder’s interest and plan appropriate ways to address them. With the help of stakeholder analysis, a framework can be developed to assist the company in developing tactics for reducing risk level and enhance support. Furthermore, by complete stakeholder’s analysis, the retailer can identify dominant sources along with its interest clashes (Sage, 2015).
New strategy for Mulberry
Mulberry can jump back into the category of “affordable” luxury goods due to its expedition into high end commodities resulted in collapsing share price, multiple profit warnings and chief executive departure. The luxury brand of British can cut its new products prices and concentrate more on cheap bags. The turnaround of Mulberry Group Plc luxury goods has been dealt a blow after the reduction of UK sales due to shortage in tourists shopping’s. Therefore, the company can revive its fortunes by less price products as well as by introducing new ranges like Tessie bag. In order to save overall margins, the company can use less leather for its extremely popular and small bags instead of using poor quality material. Additionally, Mulberry can introduce fun designs and bright colours stuffs with less price to drive new life into pushed house (Sisson, 2013). For example: If the management of Mulberry uses poor raw material in production of bags then overall quality of product would be hampered that leads negative impact on market position along with satisfaction of consumers. But, by using less superior leather in production process, management could face only some issues such as size that results company is able to provide best quality products within good price. It plays important role for enhancement of goodwill of company.
Appropriateness of alternative strategies for Mulberry
Market Entry Strategy: There are variety of ways by which an organization can enter to its target market to distribute and sell its products and services. Mulberry may look to enter into foreign market like Chinese luxury market. They should plan to own flagship store in strategic locations across major cities of China. The luxury British brand image position the company as great products with quality leather and beautiful finishing. They should also plan to re-launch their website in international language to actively engage with their customers. For example: The management of McDonald has entered in new market of India with the help of a distinct product range in which company has avoided the use of beef ion different food products. Additionally the entry price point should be strategically fixed that customers at large can afford luxury products (Stanleigh, 2015).
Substantive Growth Strategy: Also known as external growth strategy involve arrangements with other firm which are in line with the business value chain. There are four kind of substantive growth strategies – horizontal integration, vertical integration, related and unrelated diversification. Mulberry has plans to develop their smaller leather products and accessories in terms of more options of style and colour; additionally they have major plans to increase market share of men’s accessories specifically in Asia (Ngai, Law and Wat, 2008). For such objectives, related diversification seems appropriate as after exercising this strategy company will be able to spread its risk in offering complementary products within similar market. Mulberry will be also having advantages of their existing capabilities and distribution channels thus better utilization of resources along with added product line which will guarantee lower prices and regular supplies (Thompson and Martin, 2010). For example: Marks and Spencer has applied substantial growth strategies in which company is offering different products and services as per the needs and interest of target consumers in different markets. In addition to that management also considers income of people while determining the pricing of different clothes.
Limited Growth Strategy: Mulberry business strategy should involve both of product development and market penetration. They should regularly try new and innovative products to satisfy consumers demand. Also, regular interaction and engagement with loyal customer is key to success in luxury market, therefore social networking, blogs and IPhone apps can be utilized to create desire for latest products of Mulberry in those customers (Wootton, 2015).
Evaluation of different issues
During strategic planning process, management of Mulberry’s has to face different issues. In this regard, some most important issues are discussed below:
Feasibility issues: An organization formulates various plans and determines various gaols as per vision of company. In this process, the management of Mulberry’s has found significance issues related to feasibility of organizational objectives and gaols. This is because some time organization sets such objectives which are not achievable.
Sustainability related issues: The management of Mulberry’s is also facing different kinds of sustainability issues while development of different organisational strategies (Dobni and Luffman, 2003). In this regard, it has been evaluated that sustainability issues may arises when different strategies of firm are not developed as per the present efficiency of company and without considering wide range of external environmental factors of business environment.
Roles and responsibilities of personnel who are charged with strategy implementation at Mulberry
The overall procedure of implementing strategy require both employees and managers attention and active involvement at each level of organization. As the implementation has likeliness to affect wide range of duties and responsibilities, so Mulberry staffs should have complete understanding of their duties both during and after the accomplishment of implementation. With an aim to make successful changes by executing decided strategies, it should be understand by workers that which part of their regular duties will remain same and what new actions they will be required to perform (Buysse and Verbeke, 2003).
In relation to indirect modifications, employees are needed to be aware regarding changes occurring in each level of organization along with its influences on their activities and functions. For instance, changes in reporting system to other units may need employees to provide information in a different way. Further, keeping an open line for communication is the most essential role of Mulberry’s store employees during the strategy implementation (Li, Richardson and Tuna, 2014). It includes resolution of difficulties as changes are put in operations, taking time for making voice concerns and searching for responses. Additionally, the employee should remain in touch with management executives on regular basis and assist their colleagues in overcoming with problems to make an execution as effective and easy as possible (Dobni and Luffman, 2003).
Besides above, the company can appoint a change leader who will oversee the whole process and make sure about positive changes at work in the direction of achieving final goals. It will help employees to get support from adequate channel, thus lessening negative morale and rumours among individuals (D'Souza, 2015). The following are some important roles and responsibilities in implementing new strategy at Mulberry.
Estimated resource requirements for implementing a new strategy
Mulberry’s competitive advantage sustainability is based on limited resources. Several resources together can result in business competencies and capabilities development. The suitability is attached with possible results from implementation of strategies, likely reaction of stakeholders and attached level of risk. In this respect, the feasibility is referred to whether the company is having enough level of resources and potentials for implementing strategies. Further, an important element of managing operations of whole business is resources (Henri, 2006). Firm’s competitive edge is grounds on available resources with it. Also, to make successful implementation of above justified tactics, some resources will be need by organization, such as information, human, physical and financial resources:
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Financial resources - With respect to financial resources, the organization will require more capital to finance investment to directly operate in international stores.
Human resource - Strategic global manager will be required to ensure growth in Asian countries. Moreover, for the successful execution of strategy in business operations and functions, a change leader and quality manager will be needed to look over the overall process.
Technology - To streamline the wholesale distribution network Mulberry will require updated technology. Also, the company will launch an iPhone app for maintaining regular touch with its loyal customers that will subsequently help in increasing the revenue (Hitt and et.al., 2001).
The above report is concluding that company’s strategic planning is defined in its mission, vision, goals, objectives and core competencies, which should be comprehended by all involved members to execute work in right direction. Moreover, there are some external and internal factors that is needed to be considered while developing a valuable strategic plan for the organization. Also, models like BCG, PIMS and SPACE can be used to create profitable strategy for business. In addition to this, prior to formulating any new strategy, the strategic planner should make complete organizational and environmental audit along with analysing stakeholder’s preferences towards firm’s strategic changes. Further, the paper has demonstrated various alternative growth strategies for Mulberry to expand its operations in global market and capture more market share in existing targets. The overall process of strategy implementation requires different roles and responsibilities from involved members together with adequate level of five main resources, i.e. human, physical, and financial and IT. Finally, the targets with its timescales has been listed in chart to monitor the progress of new strategy and make necessary changes when required.
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