Business strategy can be defined as a tool or weapon which provides assistance to an organization in achieving predetermined aims and objectives. Business strategies are framed by higher level management which enables organization to build and sustain competitive advantage over their rivals (Business strategy, 2015). It entails long term planning which helps company in increasing productivity and profitability of the company. A well defined business strategy facilitates effective or optimum utilization of resources (Proctor, 2014). This project report is based upon Browns sports footwear which is the family owned organization. It depicts the various aspects of organization which closely affects the business operations and functions.
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It is a tool through which Browns sports footwear can assess the macro environmental factors which impacts the business decisions and operations of an organization. It provides more assistance to the corporation in assessing the opportunities and threats which are present in the business environment.
PESTLE analysis of Browns sports footwear is enumerated below:
Political factors: Political factors consist of government policies in retaliation to the tax, laws and trade restrictions closely affects the business practices of an organization (Li and et.al. 2006). Political stability plays a significant role in achieving success in the dynamic business arena. In this case, government exhibits their interest towards the sports which develops the opportunity for Browns sports footwear in the business environment. Government support enables organization to develop or expand their business operations by offering quality and cost effective sports shoes to the customers. Besides this, in order to increase awareness among the public UK government also introduces the campaign which attracts large number towards the sports.
Economical factors: Theses factors include economical growth rate, exchange rate and economical conditions of the market. Inflation and deflation makes high impact upon the purchasing power of the individual and there by sales revenue of an organization also. Economical factors of UK market are in favor of the sports footwear industry. It is cited in the case study that UK customers spends more money on clothing and foot-wears from their total expenditure. In 2014, cloth and footwear department accounted for 5.7% which states that more money is spend by UK customers as compared to 2010. It is the positive sign for the industry which provides opportunity to Browns sports footwear organization for the further growth and development.
Social factors: Social factors place more emphasis upon the cultural aspects which closely affects the decision-making of the customers. Awareness of people towards health and safety aspects also affects the sales of an organization. Growing knowledge and awareness of the UK customers towards the benefit of the sports develops new opportunity for the Browns sports footwear company. In UK market government also runs the program to create awareness among the public. By offering quality or unique designs of shoes Browns sports Footwear Company can raise its market share.
Technological factors: In the present era, technological advances take place more frequently. In order to cope with the competitive business arena organization needs to undertake research and development aspect (Roederer, Nozzi and Nason, 2011). It can be seen in the case study that brown sports Footwear Company fails to offer innovative products to their customer over their rivals. As compared to Nike and Adidas Brown does not take into consideration the research and development activity which negatively impacts its productivity and profitability aspects.
Legal factors: Legal factors and policies in relation to the consumer law as well as health and safety aspects also make impact upon the business activities (Rizzo and Kim, 2005). Awareness of UK government towards the sports increases the opportunities for the organization that operates in the footwear industry.
Environmental factors: Environmental aspects also affect the product offering of the organization. In the UK business environment Browns sports Footwear Company faces high level of competition from several competitors which affects the strategies of an organization (Yüksel and Dagdeviren, 2007). In this, to survive in the competitive business environment Browns sports Footwear Company needs to frame competent strategies and policies to attain success (What is PESTLE Analysis?, 2015).
Porter's five forces analysis
Bargaining power of buyer: Bargaining power of the buyers or customers of Brown's footwear is high as large numbers of sellers are available in the market.
Bargaining power of supplier: Suppliers consists of those who supplies the raw material to the company. In case of Brown's footwear company bargaining power of the supplier is high.
Threat of substitute products: Brown's footwear company suffers from high threat from the substitute products. As competitors also produce the sneakers and designer shoes which impose threat in front of the company. There is the chance that customers may be move on the similar kind of footwear which are made by an organization.
Threat of competitors: Nike and Adidas are the major competitors of the Brown's footwear company which make impact upon the sales and profitability aspects of an organization.
Threat of new entrants: Threat from new entrants is low because new entrants requires to offer the unique and designer products to cope with the market conditions. Moreover, Nike and Adidas have strong brand image and market share which restricts new entrants to take entry in the footwear industry.
Mc kinsey's 7 S value chain
Strategy: As per the value chain analysis Brown's footwear company needs to frame competent strategies and policies to build competitive advantage over the rivals such as Nike and Adidas etc.
Structure: In order to attain success Brow's needs to frame effective structure which creates coordination among the different departments of an organization.
System: Brown's needs to make efforts to plan the daily activities which enables employees to perform their activities in an effective manner.
Shared values: Work ethics and culture evolved by an organization closely affects the success and image in the mind of the stakeholders. Brown needs to consider ethical concerns such as low wages and conditions in overseas manufacturing which act as a drive in the mind of the customers.
Skills: Brown's needs to conduct training and development session for the employees so they become able to offer designer footwear to the customers.
Staff: Brown's hires the 40 new employees to maximize the sales and revenue of the firm.
Style: In order to improve the position Brown's requires to undertake appropriate leadership style to motivate and encourage the workforce.
Porter generic strategies
Low cost strategies: in order to survive in the competitive business environment Brown's needs to frame lost strategies. Through this, company is able to attract the large number of the customer. As cited in the case study that brown's cutting the cost by terminating the over staff and there by reduces administration cost as well.
Differentiation strategy: To take advantage of the strong brand image Brown's needs to offer innovative and designer footwear to their customers. It enables the company to attain organizational aims and objectives.
Bowman's strategy clock
As per the Bowman's strategy clock Brown's can adopt the above mentioned strategies to achieve success in the strategic business environment. In order to increase market share of the company they needs to offer innovative products at low price in against to the rivals.
Strategic grouping: Strategic grouping is a tool which covert companies in a one group who have similar business models and strategies. Through this this, Brown's is able to expand its business operations and activities.
It can be defined as a tool through which Browns sports Footwear Company is able to assess its strengths and weaknesses. By identifying this browns sports Footwear Company can convert its weaknesses into strengths and take benefit from it. Besides this, it also enables Browns sports Footwear Company to identify the opportunities and threats which are present in the business environment. This assessment provides more benefit to the company in terms of high market share as well as profit maximization.
- In 80's Browns was the number one trainer brand which is used by everyone from Madonna to Princess Diana.
- Browns recruits the highly skilled and efficient workforce which assist in serving the needs, wants and desire of the customer more effectively and efficiently.
- New recruits provide innovative ideas which provide assistance to an organization in convert the strengths into weaknesses (Roederer, Nozzi and Nason, 2011).
- There was no use of social media in the past years which are one of the main weaknesses of Browns sports Footwear Company. In past, Browns only take use of the television and magazine to advertise the sports shoes.
- Further, Browns sports Footwear Company offers only limited variety of sports product through online store. As compared to competitors, Browns sports Footwear Company provides limited offering to the customers which affects the image of the company.
- In addition to this, slow delivery process is also one of the main weaknesses of an organization. Along with that, return process is very clunky which closely impacts the satisfaction level of the customers. Further, out of stock of the most popular sizes also hampers the goodwill of an organization. Due to this, there is the probability that customers moves to the substitute product due to the wide range of offering (Djordjevic, 2014).
- In contrary to this, Browns sports Footwear Company fails to take advantage of the growing area of the market such as women wear.
- Cost of the product which Browns charged for its product is very high as compared to the competitors.
- In addition to this, browns sports Footwear Company did not make investment in its core product for the further growth and development. Company made much big investment in cars and other areas which were not fruitful for the firm (Yüksel and Dagdeviren, 2007). It did not take it customers more seriously which is one of main cause behind the failure of an organization.
- Awareness regarding health and safety aspect as well active lifestyle of the people creates opportunity for the sportswear industry. By providing quality and unique products Browns sports Footwear Company can attract larger number of customers and thereby raise gross margin of the company.
- Besides this, browns sports Footwear Company has the opportunity to open up new stores in UK. By recruiting talented workforce company is able to serve the needs and wants of the customers more effectively and efficiently.
- Along with it, organization can expand its business operations at international level and thereby take benefits in terms of high sales and profit.
- As UK customers spends more their disposable income on the cloths and foot-wears. Thus, Brown has the opportunity to take advantage of these factors by providing wide range of variety in sportswear and shoes (Djordjevic, 2014). Through this, corporation is able to build distinct image in the mind of the customers.
- Organization also has the chance to attract larger customer base including those who buys product from the rival firms.
- By offering more comfortable shoes with unique and standard designs Browns sports Footwear Company can raise or improvise its market share in Northampton.
- Browns sports footwear company face major that from its competitors such as Adidas, Nike etc.
- Besides this, company has threat to the substitute product which are available in the market at low cost. It place negative impact upon the sales margin of the company (Djordjevic, 2014).
- It can be recommend that Browns needs to make focus upon the unique styles or designs of the product. Thus, organization becomes able to build wide customer base.
- Besides this, corporation should undertake the technological aspects which help it in reducing the cost of the product.
- Further, Browns sports footwear company need to make investment on research and development aspect to assess the needs, wants and desire of the customers.
- As per the Ansoff matrix in order to build and sustain competitive advance over rivals enterprise needs to make focus upon the development of product.
- Along with that, Browns sports Footwear Company should use market penetration strategy. In this, organization needs to make focus upon the selling the product and services in the existing market to raise their market shares.
- In addition to this, organization needs to make improvement in its delivery process to increase its productivity and profitability.
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