MN6003 Strategy: Choices and Change
Individual Strategy Assignment Briefing
(20% of module mark)
Due: 3pm on Monday 18th January 2016 (submit as Weblearn Personal Journal entry)
Your Individual Strategy assignment (e-portfolio 2) is a case study analysis of 1150 to 1500 words. You must analyse the Browns Sports Footwear case (case study is on weblearn and is 4 pages long) by applying appropriate strategy models from the core module text book, ‘Exploring Strategy’ (e.g. PESTEL, Five Forces, Strategic Grouping, Value Chain or Seven S, Porter’s generic strategies or Bowman’s strategy clock). You must summarise the strategic position of Browns using SWOT analysis and then make recommendations for the future direction of the company using your analysis and the Ansoff matrix.
You should use tables or diagrams when you apply strategy models and populate them with data from the case. However, it is not sufficient to just apply models and produce diagrams or tables; you must discuss the key findings from each model (there are lots of marks available for the quality of your discussion). The information in tables or diagrams or in the end reference section will not be included in the word count. Your report should use full sentences and not bullet points (except in diagrams or tables).
You should reference your work using the Harvard system and use relevant academic reading to develop and support your work (at least three different academic sources). You do not need to read beyond the case for information about Browns or the sports footwear industry. You should stick to the case and limit your reading to strategy text books and academic journal articles. You do not need to describe the models in detail e.g. you don’t need to explain what Porter means by ‘buyer power’; it will be clear from your analysis that you understand this.
Report structure
Introduction: Brief introduction to the assignment (50 to 100 words)
Main body: Models, e.g. PESTEL, Five Forces, Strategic Grouping, McKinsey Seven S or Value Chain, Porter’s generic strategies or Bowman’s strategy clock and SWOT, populated with your analysis from the case. Discussion (synthesis & key insights) after applying each of the models. This should end with a discussion of your SWOT analysis. (1000 to 1350 word plus diagrams or tables)
Recommendations: Recommendations for future strategic direction based on discussion in the main body and insights from your Ansoff matrix (100 to 200 words plus Ansoff matrix)
Reference section: in Harvard format. Only cite sources that are included in your assignment. There must be at least 3 different academic sources including the core text book. These should be cited in the main body as in-text references and in your end reference list. Wikipedia and BusinessBalls.com are not academic sources.
STRATEGY CHOICES AND CHANGES: A CASE STUDY OF BROWNS SPORTS FOOTWEAR
Table of Contents
Introduction. 3
Strategic Models. 3
PESTLE Analysis. 3
Political 3
Economical 4
Social 4
Technological 5
Legal 5
Environmental 5
Value Chain Analysis. 5
PRIMARY ACTIVITIES. 7
SUPPORT ACTIVITIES. 7
Porters Five Forces. 8
Competitive Rivalry. 8
Threat of Substitution. 8
Threat of New Entry. 8
Bargaining Power of Suppliers. 8
Bargaining Power of Buyers. 8
SWOT Analysis. 9
STRENGTH.. 9
WEAKNESS. 9
THREAT.. 9
OPPOURTUNITIES. 9
Recommendations. 10
References. 12
Introduction
Browns Sports Footwear is the number one in selling its rubber sole sport sneakers, shoes and trainers which is a family owned brand. The brand is still competing with other brands like Nike and Adidas as they are back by them in the competition. In the late 80s the brand was worn by high profile celebrities Madonna, Princess Diana and Prince William in his school days.
The report is based on Browns Sports Footwear by analyzing its strategies and models top get an in depth insight of the organization. The performance can be even better in all aspects by creating demand for the company by recommending future strategic actions taken (Bhushan and Rai, 2004).
Strategic Models
The various strategic models used in Browns are given below:
PESTLE Analysis
Political
In the year 2010 it was seen that the footwear industry was accounted for 5.4% of total household expenses and that raise to 5.7% in 2014. This result shows that UK footwear market has grown by 24% in the last 5 years from £1.3billion in 2010 to £1.7billion in 2014. This increased resulted due to raising concerns about being fit and healthy. In the year 2014 the amount £1.7billion spent from that it is seen that 19% was on running shoes and 35% was made for general use. The age group between 25-34 years brought trainers 49.7% in the last 12 months. One of the highest purchases made in this section and in age group between 15-54 years this can be said that 40% of the individuals have brought trainers. The above information is generated from the table given below:
Economical
Browns invested a huge amount which affects can be seen in the late 90s and in the year 2002 recession took place. This results the brand in closing down its shops and making use of third party for selling their products like Foot Locker and Schuh. At present Browns have only 4% of UK footwear market and globally it can be evaluated the fall has reduced from 8% to 2%.
Social
The consumers prefer celebrity endorsed brand footwear such as Catwalks and various designers such as Channel, Tom Ford etc. Celina promoted sneakers for £600 a pair and stars like Michael Jordan, Pharrell Williams made promoting of brands Nike and Adidas. The younger generation of people is changing their purchasing habits by preferring latest footwear available in market (Birkinshaw, 2004). The female market has increased for sports shoes and the company has to be socially responsible to the community.
Technological
In UK most of the manufacture makes shoes from leather and suede as it depends on the availability of raw materials. This has increased the cost of production in the last 5 years as the cost of leather has increased in global market. The product manufactured by Browns has to be developed in technology by using innovative footwear.
Legal
The staffs are excess in Browns so to preserve the company has cut down its cost and they are ethical company so they follow the rules as per UK footwear market.
Environmental
The products used for manufacturing the footwear are environmentally friendly as the technology used for making is leather and suede it is affecting the market (Chung et al., 2007). The cattle production has reduced due to effect from both sides of demand and supply.
[Source: www.affino.com]
Value Chain Analysis is the process by which organizational functions and activities are examined. This can be achieved by creating customer value (Jeyarathnam, 2008).
Porters Five Forces
It is used by the organization to judge the profitability of an industry which can be evaluated by the competitive pressure (Powell, 2014). The five forces are as follows:
Competitive Rivalry
The brand is facing rivalry from many strong competitors such as Nike; Adidas etc. as in the footwear industry have grown over years. The customers are loyal to the brand by having engaging the masses through online selling.
Threat of Substitution
The growing of substitute products in the section of casual footwear products such as Havaianas, fit flops, crocs and Birkenstocks in sunny days. In cold days one can use Dr Martens, Timberlands, Uggs and Kickers have lost fashion from trainers and fashion sneakers. Trainers have filled the gap of traditional formal footwear in classrooms where sports shoe and formal shoe has kind of been abolished.
Threat of New Entry
This risk is low in case of Browns footwear market as investment required is huge for this market. The brand is innovating and creating new designs to attract more customers (Sadler, 2003). The brand is making is appearance in public my marketing on social media, online sites etc. for making its presence felt.
Bargaining Power of Suppliers
The raw materials used are leather, rubber and cotton which are easily available from many suppliers. It is abundant in market so it is low in case of suppliers.
Bargaining Power of Buyers
The buyers belong to age group between 15-54 years in looking for trainers as they are the customers. The product used need to be developed as in late 80s the brand was preferred by many individuals. The price of the products has to be in accordance with the needs of the buyer so it is high for them (Saloner et al., 2001).
From the various models used in the Browns footwear in UK it can be said that the strategy followed by the brand is from its heritage. According to him people are looking back in their 80s for fashion and the EBay stock is selling them at higher prices. He states that average selling price is £57 which is ahead of its competitors. He adopted the strategy of inventing man size shoes starting from 5 to 6 as women are purchasing it frequently. He repositioned the brand by giving the look of retro and heritage feels of late 80s. The brand is making an online presence in the market by selling more innovative and heritage products which is the uniqueness of the brand. As the competition is high in market it is impossible for new investors to start new business of footwear in UK (Stoney, 2001).
Recommendations
- As per Ansoffs Matrix the strategy used by Browns in each level are different. The footwear brand can enter into the market by selling the heritage products. At this level the company can increase their consumer base by existing in the market. This can be achieved by judging the geographical or psychographic segments by expanding sales.
- The product development can be done by R& D department by using public relations, investment measure etc. The use of IT software for better product development by using touch screen models by helping the customers in choosing their footwear design (Warner, 2010).
- The market developments can happen by making its presence felt outside UK by focusing on other regions for attracting customers
- The diversification of Browns can happen by the brand by introducing sportswear section of T-Shirts, Yoga Pants, Track pant etc.
References
Bhushan, N. & Rai, K. (2004) Strategic decision making. London: Springer.
Birkinshaw, J. (2004). Strategic management. Cheltenham, UK: Edward Elgar Pub.
Chung, W., Tan, K. and Koh, S. (2007). Modelling strategic business decisions. [Bradford, England]: Emerald.
Foss, N. (2007). Strategic belief management. Strategic Organization, 5(3), pp.249-258.
Jeyarathnam, M. (2008). Strategic management. Mumbai: Himalaya Pub. House.
Powell, T. (2014). Strategic management and the person. Strategic Organization, 12(3), pp.200-207.
Sadler, P. (2003). Strategic management. Sterling, VA: Kogan Page.
Saloner, G., Shepard, A. and Podolny, J. (2001). Strategic management. New York: John Wiley.
Stoney, C. (2001). Strategic management or strategic Taylorism?. International Journal of Public Sector Management, 14(1), pp.27-42.
Warner, A. (2010). Strategic analysis and choice. New York: Business Expert Press.
