INTRODUCTION TO BUSINESS STRATEGY
Business strategy is used for determining objectives and plan to meeting them in an effective and efficient manner. By implementing business strategy, top management of organization provides the direction to perform business activities to achieve the organizational goals. Report will explain the mission, vision, objectives and goals of Mulberry and issues that are involved in planning of strategy. Mulberry is public limited company of UK which deals in fashion products and accessories. Organization is having stores throughout the world including Europe, USA, Asia and Australia. The next part report will produce organizational and environmental audit and explain the significance of stakeholder for Mulberry. In the end, report will evaluate the alternative strategies for organization and select one for future. Furthermore report will compare the role and responsibility for strategy implementation and resources required for applying new strategy with target and timescales for Mulberry.
TASK 1 PROCESS OF STRATEGIC PLANNING
1.1 Mission, vision, objectives, goals and core competencies of Mulberry
Mulberry is an English design company renowned worldwide for its craftsmanship and quality of products. Organization is dealing in luxury fashion bags for men and women with stylish, stand-out design with finest leather. Mulberry is offering effective product range to attract customers and achieving the goals and objectives.
Mission of Mulberry:
The mission statement of organization is “To develop product and services that meet the desired level of customer.” Organization is always looking to improve the quality to encourage the brand name and influence the decision of buyers all around the world (About Mulberry, 2014).
Vision of Mulberry:
The vision of organization is to develop market size and share by offering quality product to customer as well as encourage the employees to generate creative and innovative design that influence the market of fashion.
- To increase the market size and share with effective brand positioning.
- To develop new and creative range of products.
- Set brand reorganization in emerging nations in fashion market.
- Contribute in betterment of environment by effective disposal of waste and recycling.
- Optimum uses of resources.
- Effective advertising by including ethical and legal approach according to country.
- Improvement in technology to reduces extra cost of manufacturing.
The goals of Mulberry are to generate revenue from the potential areas of sales and offering of innovative and stylish product to retain the customer. In addition of that, organization is aiming to open new stores in international market and involvement of cultural and regional impact in products to strengthen the brand image in growing business areas.
In that organization is having good sense of fashion that is helping to set unique identity of products and accessories for men and women (Linn, 2008). The quality and style of products are the key elements which support to gain competitive advantage for Mulberry.
1.2 Issues involved in strategic planning
In the development of business strategy, it is the responsibility of top management to consider all the aspects and factors that influence the planning. In the strategic planning following issues are involved that influence the process of selecting resources and implementing changes for developing effective plan.
Understanding of priorities:
For planning of business strategy, first of all management need to set the priorities which has to be accomplished as well as considered. By using and determining priorities, company can improve the effectiveness of strategy (Paswan and et.al., 2011). The basic priority of Mulberry is improvement in business size and share with competitive advantage. In addition to that enchantment in the range of product and regional structure is also involved in priorities of Mulberry which is influencing the strategic planning.
In the planning and development of strategy, stakeholder of Mulberry plays important role as they provide input to make changes in planning. These are the key members for formation of plan and selection of strategy. As organization is looking to craft rapid growth in the existing market segments, in that contribution of stakeholders like supplier, employees and customer is valuable. By considering them management of Mulberry can develop effective strategy which support to get the desired objectives and goals.
Survey of customer and stakeholder:
For the planning of strategy and development of process for achieving goals and objectives, market survey and customer feedback is required. This is an important issue that influences the overall planning for resources and development of products (Kruger and Mama, 2012). Organization mainly deals in luxury fashion products which require rapid changes to maintain the interest of customer. From market surveys, Mulberry will get the knowledge about customer perceptions and fashion trends which will support to develop effective strategic plan.
In the strategic planning, determination of deadline is important to achieve the goals and objectives according to plan. In the strategic planning, use of time frame will influence the development process in international market as other organization is also looking to improve their size and share (Ebaid, 2011). Time specific tasks and meeting of deadline will have to be considered as influencing issues for strategic planning.
1.3 Different planning techniques for Mulberry
In the development of business strategy, it is the responsibility of top management to consider all the aspects and factors that influence the planning. By using and determining priorities, company can improve the effectiveness of strategy. The basic priority of Mulberry is improvement in business size and share with competitive advantage. To get the desired objectives and outcomes, organization can implement or use the BCG growth-share matrix. This will help Mulberry to involve issues and develop effective plan to achieve business objectives.
This indicates the low market share where organization is not performing up to the potential. For example Mulberry is not having market share in all European countries. Dog element indicates for business diversities in products which need to be focused and use for growing the business opportunities (Elbanna, 2009). As organization wants to grow market in USA, planning according to BCG will support to meet goals.
This indicates the low cash flow in the market for Mulberry in its business areas. By using this growth matrix strategy management of organization can gain the market share by introducing the products which performing well. For example bags of Mulberry is performing well in the existing market, management can diversify them to new growing market to uplift the condition of company. It will help to generate revenue and cash flow that influence the planning.
This indicates the large amount of cash flow areas which are the key source of generating revenue. By analyzing them organization can craft improvement in plan for new opportunities. For example Mulberry having good market in UK as large amount of revenue comes from this area. Management can identify the key success factors and use them for developing new business strategy (Kaplan and Norton, 2013). The key points of Mulberry are quality, distribution, invocation in designing of product which supporting the brand.
This shows the maturity in market share and areas where organization is performing well. Using these aspects organization can develop plan which influence the objectives and goals that Mulberry is aiming to achieve. For example organization is effectively using the traditional and modern tactic to sustain the position in market and retaining the customers (Kourdi, 2010). By using this strategy organization can craft improvement in potential areas for stable cash flow with integrated values and reasonable accuracy which support the planning and improvement in business share and size.
TASK 2 FORMULATION OF NEW STRATEGY
2.1 Organizational audit for Mulberry
In the organizational audit, SWOT and Value-chain analysis can be used which will help to provide information about the internal issues and influencing factors. For organizational audit for Mulberry SWOT and value-chain analysis is as follows.
Strength: Organization is dealing in fashion retail business with good sense of market and strong knowledge of fashion trends. The strong point of Mulberry is positioning of product, effectively using the market conditions and promoting product as per the situations (Kumar, 2012). In addition to that organization produces the innovative and creative bags and accessories which influence the buying decision of customer.
Weakness: Mulberry is big brand of UK fashion industry, but organization has some weakness like reorganization of opportunities in international market with obsolete sales. In addition to that organization is lacking to establish brand name in USA and Asia as company is not using the local market trends for developing product for these markets.
Opportunities: In the international market, Mulberry has lot of opportunities which will help to achieve the objectives and influence the share and size. In the international market, organization can utilize the market like India, china, Africa and Brazil which have lot of opportunities (Porter, 2008). These are growing economy of world which has lot of potential.
Threat: In business, organizations have threat from many factors. For Mulberry competitors like Mark & Spencer, Burberry and Next plc are a threat as they are offering similar range of product in fashion industry and influencing decision of customers. In addition to that rapid changes in the market trends and customer perceptions are also creating threat for Mulberry.
From the value–chain analysis of Mulberry, it is considered that organization is performing well in the fashion industry of UK (Ebaid, 2011). Distribution of products and services to clients and customers is impressive which is influencing the brand image of Mulberry and helping to retain customers. By effective manufacturing, designing and delivery of product, Mulberry has set good market for itself in UK and using this brand image for establishing in international market. By effective transformation and processes company has gained trust and targeted customers. From this organizational analysis it is consider that organization effectively meeting the demand and supply which encouraging the market of Mulberry.
2.2 Environmental audit for Mulberry
For the environmental analysis, PESTLE is used and preferred by the management to identify the external issues and factors which influence the business practices and strategy (El-Ansary, 2006). Following are the key elements for environmental analysis of Mulberry:
Political factor: Mulberry is operating business in many countries and the rules and regulation of nations are different which influence the policy and planning of organization. Different nation have the dissimilar policies for tax, use of land and resources which need to be fulfilled and implemented by Mulberry for expanding business at international level. Regulation of government such as health and safety of employees, implementation of fair trade policy and protection of consumer right has impact of the business.
Economical factors: Economic condition of world is stable as developing nation is growing effectively (Kruger and Mama, 2012). However, the economic condition of organization and UK is good but in the current scenario business strategy of Mulberry is getting affected by the economic changes at international level. Fluctuation in currency exchange rate and downfall in global market has hampered the sales of organization as people are not spending cash of luxury items which directly hampering sale.
Social factors: In the business of fashion accessories, social factors like values and culture have the significant impact. For Mulberry information and knowledge about the social culture influences the business strategy. Mulberry has strong sense of fashion in domestic market that is helping for developing stylish product for attracting local customers.
Technological factors: In today’s business, use of technology is must which is driving the business activities very effectively (López, 2005). Mulberry management is using online selling and marketing of products that is influencing the overall market of company. For designing and manufacturing of product, Mulberry is using advance machinery that is providing the significant impact on quality and looking of products. In additional to that organization is using online customer services system which is helping for retaining customer as well as persuading others for buying product of Mulberry.
Legal factors: This could be the most influencing factor for organization as Mulberry is offering leather bags and accessories which are made from animal skins. According to law it is illegal and not ethically right (Marren, 2007). National government of different countries has banned such products which is not good sign for Mulberry. In additional to that use of chemical also come under the illegal act of developing products. These are the most influencing issues that need to be sort out as soon as possible.
Environmental factors: Environment factors are affecting the whole industry as well as business activities of Mulberry (5 essential steps to successful strategy implementation, 2013). Management has to look into this serious matter otherwise it will affect brand image and business very badly. Conditions of environment are getting worst as organization is using natural resources above the limit. Mulberry has to develop plan for disposal of waste. In that Process, company is producing eco-friendly product but that is not enough. In order to develop business strategy this element need to be considered for getting competitive advantage and encouraging brand image.
2.3 Significance of stakeholder analysis
Stakeholder analysis is important for evaluating the impact of stakeholder on business of Mulberry. By conducting stakeholder analysis, organization can make the decision for selecting business strategy and areas for expanding business (Faupel, 2012). It is an important process of analyzing the capabilities of key stakeholders and planning of marketing strategies which can be used in effective manner to achieve the objectives. Through stakeholder analysis, Mulberry management can select motivation strategy to encourage and boost the morale of stakeholders. This helps organization to analyze the performance of stakeholders and make necessary changes to utilize the opportunities and establish brand in international market.
TASK 3 APPROACHES TO STRATEGY AND SELECTION
3.1 Analysis of possible strategy for Mulberry
Organization is looking to expand business share and size, for that company requires implementing business strategy that help to achieve the objectives in effective and efficient manner. For that Mulberry can apply following strategies:
Substantive growth strategy:
To achieve the goals and objectives for international market, organization can implement this strategy. In that strategy, Mulberry can diversify the existing products into new market within new segments. This strategy is basically aimed to obtain the large market by effective positioning and targeting of customer groups (Al-Ghamdi, 2008). By using the market penetration, company can introduce existing product and services in international market. Through substantive growth strategy, organization can introduce itself in new market with some modifications in products according to local market and customer preferences. This strategy requires funds and human resources for performing operations and managing resources for achieving goals in new market. This strategy has two subdivisions. For Mulberry, vertical will beneficial for organization.
Vertical integration: This strategy involves process where manufacturing to distribution of product is controlled by the top management to encourage the sales and size of organization (Speculand, 2009). Vertical growth strategy has three types such as backward, forward and balanced integration in which organization can control the supply of product in new market for obtaining competitive advantage.
Market entry strategy:
Mulberry is aiming towards the international market. By using this strategy, company can achieve this goal in more effective and efficient manner. This strategy offer merger and acquisition or joint venture for starting business in new market. However all options are effective but for Mulberry joint venture would be beneficial which is as follows:
Joint venture: In that strategy for expanding business limits, organization can start business with local firm which deals in same business. By using this strategy, Mulberry can eliminates extra cost of developing infrastructure and human resources to establish brand (Huber, 2011). This strategy offer opportunities for introducing the brand in new market with significant efforts of local organization which have all knowledge and information about market as well as customer perception. Joint venture is good to apply for achieving goals and objectives in proposed manner and establish brand.
3.2 Selection of strategy for Mulberry
For Mulberry, Market entry strategy will be appropriate as organization is looking to start business in international market and other countries. By implementing this strategy, organization can establish brand name in more effective and efficient manner by starting joint venture with local organization which have good knowledge and name in market (Gnosa, 2011). For example, organization can start joint business with Hamilton in USA which deals in fashion products and have good sense of customer perception about local market. By starting joint venture with Hamilton, Mulberry can promote brand and products in USA. This strategy will work for organization as it has quality products and good range that can influence the decision of customers. Brand name of Hamilton will also help to retain customer and establish the brand of Mulberry. This strategy will help organization to get competitive advantage and reduce the cost of starting business in new market as Mulberry can use the infrastructure of Hamilton. In addition to that, organization can use the resources of Hamilton and get the support to develop products according to US market fashion (Feranado, 2011). Selection of this strategy will help Mulberry to achieve the objectives of expanding market share and size in effective and efficient manner.
TASK 4 IMPLEMENTATION OF CHOSEN STRATEGY
4.1 Role and responsibility for implementation of strategy
For the implementation of selected business strategy, top management of organization assign different role and responsibilities to teams and individual to achieve the objectives and meet the goals of introducing brand in international market. Top management of Mulberry will evaluate the performance and skills of individual and assign role accordingly. Following are the key members of organization which will play significant role in implementation of selected business strategy.
Operation teams: For the implementation of business strategy, role of operation team is important as it develop products according to fashion trends of new market. Top management of organization gives direction for designing of product which will influence the decision of customers (Edwards, 2002). Operation team will support to implement the business strategy with significant input in manufacturing of product according to new market.
Project teams: In organization, role of project management teams is crucial as it determines the process for all the departments and individual for managing task as well as development of products (Uliwick, 2005). Project team analyzes the need and trends of new market and provides the direction to all relevant departments for applying strategy and gets the maximum of resources.
Human resources department: This department will organize the training session for teams and individual for explaining task for implementing selected business strategy. Role of human resources department is very important for assigning role and developing application according to strategy (Thomas, 2007). This department will set the target and benchmarks for individual to achieve the goals with new strategy.
Manager: For the implementation of new business strategy, role of manager will be very decisive as it will communicate all information and collect feedback from employees. It is the responsibility of managers to explain new operations and process to employees and resolve issues that hampering whole procedure. Manager plays important role for communication of issues and changes between top management and employees (Marren, 2007). Managers look after the process and provide guidance for managing operation according to strategy.
Employees: In order to implement new business strategy, employees play significant role as they perform tasks and operation. The whole process of developing, designing and finishing execute by the employees as per the directions. Hence the role of employees is imperative for implementing business strategy (Kruger and Mama, 2012).
4.2 Analysis of resources for implementing strategy
For the implementation of new business strategy to establish brand name in international market, Mulberry management requires following resources. By managing these resources organization can effectively apply the selected strategy and achieve the targets.
It is the most important resources that, organize the training session for teams and individual for explaining task for implementing selected business strategy (Tactics, tools & strategies – five steps to implement, 2010). Role of human resources department is very important for assigning role and developing application according to strategy. Human resource department manages the other resources and perform operations according to strategy and plan provided by the top management. This resource will work with top management to implement changes and apply work force to manage functions.
This is important resource that influences all activities of Mulberry for developing and expanding business. For implementing strategy, organization requires setting new equipments and appointing skilled work force to produce quality products according to place. In addition to that organization needs funds for marketing, purchasing and salary of staff (Thomas, 2007). This is key resources for implementing strategy and managing operations. For that purpose, Mulberry management can approach to banks, investors and creditors.
For the development of product, organization requires quality raw material to meet the strategic objectives as well implementation of operations according to strategy. As Mulberry is looking to establish brand in international market, for that quality of products need to be high and up to the international standard to attract customers. For that organization need quality raw material to develop standard product and implement business strategy effectively.
In the current scenario, technology is valuable resources for implementing strategy and determining work standard. Technological resource will help Mulberry management to monitor the work according to strategy and provide online direction to manager and employees for implementation of strategy (Edwards, 2002). By using technical resources, management can build effective communication and provide the innovative and fast marketing tools which will influence the business and help to achieve objectives. This is an important resource for implementing strategy and manages other resources.
4.3 Targets and timescales for achievement at Mulberry
For monitoring of targets and timescales, Mulberry management can use the following techniques. This kind of approach will help organization to craft immediate changes and achieve the target and meet the goals impressive and successfully (Paswan and et.al., 2011). To monitor the effectiveness of new strategy, Mulberry management can use following timescale techniques:
This term refers to availability of resources that is required in the implementation of strategy. Organization is performing well in the fashion industry of UK. Distribution of products and services to clients and customers is impressive which is influencing the brand image of Mulberry and helping to retain customers. By effective transformation and processes, company has gained trust and targeted customers (Kumar, 2012). It is the responsibility of management to make things feasible to employees and other stakeholder by allocating resources. By supervising the feasibility of operations, company can achieve the targets.
For the achievement of target term, suitability refers to primary principle of strategy which involves economic factors. By using this technique, organization can evaluate the effectiveness of strategy according to environment and market trends in current timescale. However the economy condition of organization and UK is good but in the current scenario business strategy of Mulberry is getting affected by the economic changes at international level (El-Ansary, 2006). Mulberry have to develop plan for disposal of waste, in that process company is producing eco-friendly product but that is not enough.
By this technique, organization can monitor the working of stakeholders and set new target for them to manage the operations. For the achievement of new goals and objectives, acceptance of all changes is necessary. By this technique, Mulberry management can effectively monitor the process of working and craft improvement in operations for accomplishing the goals.
From the above report it is considered that Mulberry management has good mission and vision for developing the business and craft new possibilities for encouraging brand name in international market. Organization has stated objectives and goals for achieving through implementing new strategy. Report has explained issues and factors that are involved in the strategic planning and provide valuable input for managing resources to achieve the objectives. Report has explained BCG growth-share matrix for Mulberry to identify areas for improvement and managing tasks. In the next part, report has produced organizational and environmental audit in which it carried out the factors like economy, technology and environment that influenced the business strategy of Mulberry.
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