Strategic Management: Analysis and Development of Current Strategy

This report provides an analysis of the current strategic position of Fashion Diva Ltd and the development of its strategic direction. It includes a review of the competitive advantage, evaluation of strategies, and progress of strategy development and implementation.

Strategic Management

Contents
INTRODUCTION.......................................................................................................................................4
1. Analysis of the current strategic position and strategy development.....................................................4
a. Current strategic position....................................................................................................................4
Current strategic position identification..............................................................................................4
b. Development of a Strategic direction......................................................................................................7
1. Mission and vision statements.............................................................................................................7
2. Overall target market...........................................................................................................................7
3. Strategic choices..................................................................................................................................8
4. Strategic and financial goals/objectives...............................................................................................8
Evaluation of strategies...........................................................................................................................8
2. Reviewing the progress of strategy development and implementation....................................................8
Analysis of current strategy in term of competitive advantage................................................................8
Discussion on response to the strategic issues(risk)...............................................................................11
3. Sustainability of current strategy...........................................................................................................13
Demonstration of analytical issues........................................................................................................13
CONCLUSION.........................................................................................................................................14
REFERENCES..........................................................................................................................................15

INTRODUCTION
Strategic management is the effective use of such a assets in an organization to
accomplish client goals and policies. Strategic management needs a focus on the institution's
procedures and activities, and also outside factors which influence how the enterprise operates.
Strategic management processes should direct the actions and processes at the highest
management. Companies increasingly and across all industry sectors can profit from the tactical
risk management (Pisano, 2017). Support of accomplishing the strategic goals of the business,
assessing adversary behavior, examining the organizational strategy of the system, assessing
market processes and ensuring the business-wide implementation of the strategy. This report
based on the fashion retail industry in which introduce the Fashion Dive limited which is
working for the all categories people fashion. The company introduced in United Kingdom. In
this report covers various topics such as, review of competition, corporate strategy, vision,
mission, target market and objectives. Along with consider 6 year profit and loss statement and
review the strategy with proper recommendations.
1. Analysis of the current strategic position and strategy development
a. Current strategic position
Current strategic position identification
In context of Fashion Diva Ltd, there are several macro or micro economic factors which
affect the organization and its operational performances. In order to identify such factors,
management follow different marketing analysis tools or framework such as SWOT or PEST.
This strategic analysis framework helps the managers of Fashion Diva Ltd to identify such
factors which influence them positively as well as negatively. Further discussions are as follow:
PEST Analysis:
Political factor: There are several factors which affect the organizations and managers
which need to consider such factors before making any strategies in context of firm to maximise
production and profitability (Bogers And et.al., 2019). Such as political stability, free trade

agreement, tariff, corruption, competitive strategy etc. Because of the Free Trade Agreements
and European incorporation, the door will always open for UK investors to expand in Europe.
Such international factors have helped Fashion Diva Ltd extend out their wings for international
expansion. Fashion Diva Ltd has announced a new franchise process in Poland and Australia; in
contributing to the rise govern of off propping. Fashion Diva Ltd implemented free trade policy
which helps in reducing overall cost and company able to sell their clothing items outside the UK
territories.
Economic factor: This factor includes the economic trend, growth rate, interest rate,
inflation or exchange rate of currency, unemployment, disposable income of consumers etc.
These factors should be considered by the organizations before making any strategy of
expansion. Fashion Diva Ltd being from the Retail sector is unpredictable with respect to any
interest rate movements. The September 11 twin tower tragedy has so much influenced the
global economy. Prices of products drasticlly reduce which reduces the overall profit margin of
Fashion Diva Ltd. Luckily, situations gradually evolved for better and company start recovering
its loss. Another economic factor is conflict with small organizations over the product price
because of Brexit impact on currency value.
Social factor: Perceptions and shared beliefs regarding a range of factors like income,
customer support, imported goods, culture, social views, fitness, work, population
growth, lifestyle trends etc. these are the social factors which is essential to consider before
formulating any strategy in respect of entity (Carayannis, 2018). The taste of a buyer keeps
altering every time. Such alterations are both an advantage and a disadvantage to the retail
fashion industry. It’s a chance because of the fresh market. However, if the business does not
implement the change that is precisely which happened to Fashion Diva Ltd and
it becomes threat for the organization. It persisted with conventional belief, but did not conform
to the reforms.
Technological factor: Change in the technology affects the organization and help them
to maximise their operational production and performance. In order to get success or expand
their market into different regions, organizations need to introduce new technology or adopt
several ways to attract customers regarding their product line. In 1996, the Fashion Diva Ltd
introduces Charge card was introduced nationwide. In 1999, company opened online shopping

on the Fashion Diva Ltd website. The implementation of such technology helps the company to
operate rapidly and easily.
Above discussed factors affect the fashion retail company such as Fashion Diva Ltd, so
managers need to evaluate these factors effectively and make sure to consider it into their
strategies to maximise operational performance and productivity.
SWOT Analysis:
 Strengths: Fashion Diva Ltd has approx 389 stores in the worldwide location and further
they work to expand their market reach. This company is very popular among the UK
market since 1956 and it considered into top 20 brands of UK. Fashion Diva Ltd has
strong customer base and the quality of their cloths are very good and effective. Brand
positioning of company is very popular and effective which helps in targeting maximum
audience. Company follow the customer focused strategy and makes sure to satisfy them
through providing effective customer support services.
 Weakness: One of the main weaknesses of the Fashion Diva Ltd is too much dependency
on UK market or poor financial performance (Meyer and Xin, 2018). Company need to
focus on expanding their operations and reduce their dependency from only UK market.
Fail to introduce new products in the existing product range. Company also losing their
employees who has great potential because of their competitors who offered them more
attractive packages. In addition, Fashion Diva Ltd faces technical difficulties while
adopting any new features and technique to improve their overall operational
performance.
 Opportunities: Fashion Diva Ltd is decided to expand their business into Indian market
where they can several opportunities to improve their profit margin. In addition, they
should focus on making strong presence in online shopping by using digital marketing or
social media marketing. Effective marketing and cheap prices of their cloths help the
Fashion Diva Ltd to expand or make special image in the customer’s mind. Along with it,
company have to improve their customer support services to resolve their queries which
make them loyal for the brand.
 Threats: Fashion Diva Ltd was hit by the recession and saw a significant slump in
revenue in 2009 where fall in clothing sales that is 10-year low in clothing sales in 2016.

Market indicators and a declining euro continue to be seen as a threat, particularly in the
Middle East (Pfarrer and et.al., 2019). Changing clothing trend also affect the
organization which hit the sales revenue, so company should regular improve their
clothing range to get in market trend and always in customer’s mind. Unstable economic
situations in many international franchise markets where the organizations operates such
as the Middle East and pose a threat for both franchise receivables and to the future of the
organisation in those countries.
With the help of SWOT analysis manager’s of Fashion Diva Ltd able to build strategies and
make sure that company able to minimise their weakness and threats by using their strengths and
weakness.
From the overall analysis, it has been observed that there are several macro or micro factors
which affect the Fashion Diva Ltd. Managers need to improve their strategies where they should
focus on improving their technology, marketing & advertisement of goods etc. It helps the
organization to improve their weakness or make their brand popular.
b. Development of a Strategic direction
1. Mission and vision statements
Mission & Vision Statement: The Company Fashion Diva Ltd is founded on the core
principles of consistency, reliability, efficiency, creativity and faith. Ultimately, the 'mission' of
the company, across the depth and variety of its products, is to allow inspirational quality
available to all. The 'vision' of the company is to have a quality that can be evaluated to its peers,
from consumer service, to workplace safety for the public and society and the work climate.
2. Overall target market
Target market: Fashion Diva Ltd Company target the age group people of 5 to 65 for both
gender categories such as men or women (Schilling and Shankar, 2019). Fashion or clothing
industry has huge scope because people regularly purchase cloths and on every occasion
customers are used to done shopping. Changes in the trend also a biggest opportunity for the
fashion retail company such as Fashion Diva Ltd. Currently this company target the UK and

some territories market and in future they expand their operations into Indian and other
international market to make their brand popular among the customers.
3. Strategic choices
Strategic Choice: Fashion Diva Ltd follows the business strategic which is referring to the
activities and decisions that an organization takes to meet its strategic goals and to be successful
in its market. This determines what the company wants to do to meet its priorities, and will help
inform the recruiting and capital management in decision making process.
4. Strategic and financial goals/objectives
Strategic and financial objectives: In context of Fashion Diva Ltd, management set some
strategic and financial goals & objectives and further made decisions for its successful
achievement (Sullivan, Thomas and Rosano, 2018). For the next 6 years, company wants to
increase their sales every year with 10% margin and estimated to increase profit margin around
10% annually. Because of poor financial performance, Fashion Diva Ltd needs to borrow money
from external sources to expand their business and further need to build strategies goals &
objectives to achieve their financial goals.
Evaluation of strategies
Mangers of Fashion Diva Ltd follow business strategy where they have to made specific
goals & objectives and further perform accordingly to achieve that. In order to increase their
sales annually 10%, they need to focus on digital or social media marketing, invest in research
and development to identify latest trend of the market or make sure that company have all
resources to accomplish their goals. After gathering all the resources, they need to build effective
strategies which helps in achieving their strategic or financial goals & objectives.
2. Reviewing the progress of strategy development and implementation
Analysis of current strategy in term of competitive advantage
Marketing strategy can be described as a collection of capital describes, either across
several sections or in writing. This is a description of the how the organization can accomplish
its targets, fulfill its consumer needs and retain a strategic advantage on the competition. To

achieve the competitive advantage company apply different types of strategies that helps to get
better competition at the market place
Corporate strategy: Strategic strategy involves the business governance of a corporation with
the intention of getting business targets while attaining a competitive edge. A corporate strategy
requires a clearly developed, long-term goal set by companies, aiming to build brand value and
empowering the employees to carry out the necessary measures to meet product quality.
Therefore, corporate strategy is a continuous process which involves a continual attempt to
communicate shareholders to stay with the business with their capital, therefore growing the
share price of the company. Companies that continue to offer unstinting consumer satisfaction
would be those who periodically update their business plan to strengthen regions which do not
produce the expected outcomes. Corporate strategies can apply to various facets of a business,
but the tactics most companies use are price makers and market segmentation (Beheshti and
Sægrov, 2018).
Business Strategy: Business strategy can be described as the action to take or set of statements
that help the startups achieve business and marketing goals. A strategy can be described as a
mixture of all the company decisions made and behavior carried out to achieve corporate
objectives and to maintain a competitive advantage in the marketplace. It's the core of the
company as it's the route map that lead to a particular objectives. The certain mistake in this
development plan can cause the company to get wasted in the audience of enormous competing
companies.
Functional level strategy: Functional Level Strategy can be described as the week and-to-day
approach that is designed to help devise policies at the corporate and business level. Such
techniques are formulated as per highest executive level guidance. Functional Level Planning is
about decision-making at the operational level, called tactical judgments, for diverse
organizational industries such as manufacturing, marketing, research and development,
accounting, staff and on and on. As these decisions are made within the context of business plan,
analysts also provide company's strategic management with correct guidance and feedback about
the plans and tactics to be selected either by organization (Williams, Chen and Agarwal, 2017).

As comparison of existing business strategy it is analyzing that Fashion Diva limited
must apply the functional level strategy in which include business and corporate strategy at
different level to achieve target successfully.
Review competition: To analysis the competition for the Fashion Diva limited require to
collect information of UK market and analysis according to requirement. For the analysis apply
the porters five forces model such as: Porters five strength model is a method to deciding how
difficult a given market is, and thus how successful it can be for a company. The structure relies
on five variables to do this, recognized as the 'five powers.'
Buyer power: The first significant force is consumers' negotiating power, which can opt to bring
down rates, not purchase goods, or move vendors. Purchaser influence is a fairly big force in the
apparel industry. Although clothing buyers are usually people with no or little explicit market
power (as opposed to big firms, purchasing in bulk, which may be the key customers in other
industrial sectors), they have several alternate places to search for clothing and little reason to
stick with one specific firm , giving them more than enough implicit negotiating power.
Supplier power: Supplier influence is a relatively low and unimportant feature of the modern
retail sector. Many clothing companies produce their goods from developing world suppliers
who only earn percentages of the income. Providers have no influence over the fashion world,
because they are sadly expendable and can still be traded. Consequently, price changes for this
sector are comparatively small and will remain on until the international development deficit
substantially reduces (Dandagi, Bhushi, Bagodi and Sinha, 2016).
Competitive Rivalry: The fashion industry is an fascinating one if it relates to the study of
economic competition thru the strength. There are literally millions of stores selling very related
objects but then there is the label idea that enables certain businesses to charge insane levels of
clothing. There is little competition in this room today, so the marketplace is increasingly
growing flooded with really identical products. The clothing sector is a very tough one to break
through in this context, and is already being a 'race to the bottom' not great enough for retailers!
Threat of new entrants: When stated earlier, in this sector there is nothing that is new to take to
the plate, so this power has been a little limited as well. That being said, new additions may find
innovative ways to commercialize the own goods (which may not even be exceptional), and as

such create small entrants perhaps with subtle social media platforms. In its existing state, the
design business is 'high risk, large reward' for potential competitors it isn't too hard to bring a
step in the gate and imitate others, nor will the consumers take care of such products.
Threat of Substitution: Luckily there is nothing to replace clothing for those of us in clothing
retail sector. This power is almost insignificant in the fashion world all 'replacement' is really just
rivalry. To summarize up, it appears challenging to plunge into the apparel business effectively,
and it is still gloomy for businesses inside this room. This study of the five competitive forces
has also shown that although there are few risks and little manufacturer negotiating power, it is
just not great that perhaps the current market is considerably high. Purchasers have vast
quantities of implicit leverage to deal with i.e. more than enough options and many rivals find it
difficult to establish a market position (Meredith, Shafer and Mantel Jr, 2017).
As per the above analysis it is analyzing that Fashion retail industry buyers power is
decreasing pay, supplier power increase, competitive rivalry is high, thread posed by new
entrants and possibility to replace of the activity.
Discussion on response to the strategic issues(risk)
Business environment risk: Business risk is the threat element(s) a corporation or entity
may have that can reduce its profit or cause it to fail. Everything that undermines the capacity of
a corporation to attain its revenue objectives is considered dangerous to market. A danger that
could have a significant effect on the company benefits of a particular or expected usage of a
commercial or residential property, not generally restricted to the environmental problems that
need to be addressed in this activity. There is identifying different business environmental risks
that face by the Fashion diva limited such as:
Cost of raw material: When it comes to actual resources, the fashion sector has changed
using a linear regression model, often described as "take, produce, and waste." But, as becomes
abundantly apparent, several of the assets clothing depends on to manufacture its products are
scarce, most importantly fresh water. Staining and storage methods require massive amounts of
water; to create a pair of skinny jeans well according to the Fashion Diva limited. A t-shirt
requires 20,000 litres about 70 percent of the water use is in cotton production, which along with
silk, wool and leather is among the materials with the greatest environmental impacts.

Frequently changes in fashion trends: In present time identify the changes in people
taste and preferences frequently that impact on the Fashion Diva limited directly. By 2020,
consumers will become the most multiple group in the working population, meaning that
clothing brands will have to fulfill their expectations, rather than those of view Implies
Millennials regularly independent suspension as a factor shaping their buying habits. Even
although a quarter of the respondents claim they are more inclined to buy from businesses that
take social responsibility into account. (Chen, Yueh and Liang, 2016)
Labor Disruption: Besides the inevitable waste produced by the industrial model of
clothing, several of the geographic locations in which clothing depends for cheap foreign labor,
are at strong risk of increased disturbance. The severe weather conditions that are projected to
become even more frequent in the coming years are likely to influence the subsistence and
productivity of millions of garments workers, resulting in incompetence in the production
process and declining production.
To overcome from these problems Fashion Dive limited prepare budget, income
statement in order to analysis the financial problems and which places face the problems in large
manner.
Analysis the six year income statement
2
2021
2
2022 2023 2024 2025 2026
£ £ £ £ £ £
Sales 550,000 420,000 620000 682000 750200 825220
Less Cost of sales 313,000 229,000 263350 302852.5 348280.375 400522.4313
Gross Profit 237,000 191,000 356650 379147.5 401919.625 424697.5688
Less Operating
expenses
7
7,000
7
7,500 76000 75000 76500 78000
Operating profit 160,000 113,500 280650 304147.5 325419.625 346697.5688
Less Interest
payable
3
,000
2
,500 2000 2500 3000 3500
Profit before
taxation
157,000 111,000
278650 301647.5 322419.625 343197.5688

Less Tax payable 3
8,000
5
0,000 45000 40000 40000 45000
Profit after taxation 119,000 6
1,000 233650 261647.5 282419.625 298197.5688
Retained profit
brought forward
187,000 151,000
167000 160000 1550000 150000
Less Dividend 3
5,000
2
5,000 15000 10000 25000 20000
Retained profit
carried forward
£271,000 £187,000
385650 411647.5
1807419.62
5 428197.5688
3. Sustainability of current strategy
Demonstration of analytical issues
To maintain the sustainability of the business apply the porter’s generic strategy that
helps to provide scope in the competitive environment such as:
The method of doubt of a company within its market defines if the performance of a company is
in front or behind the market average. Long-term source of competitive advantage is the
underlying concept of above normal profits. A firm may hold two basic forms of strategic edge:
reasonable prices or distinction (Balmer and Wang, 2016). Integrated with the variety of
activities by which a organization aims to achieve them, the two main forms of competitive edge
occur in three common strategy in order to achieve below standard success in a business sector:
Cost leadership: A business is setting out in pricing strategy and become the highest cost
producer in its industry. Competitive advantage outlets are diverse, and rely on the company 's
framework.
Differentiation: An organization aims to be special in its sector in a product differentiation
alongside certain aspects which are commonly appreciated by customers
Focus: The traditional concentration strategy lies in selecting a specific competitive domain
within a market. Within the market, the focuser chooses a significant following and tailors the
approach to benefit them to the detriment of everyone else (Ojua, 2016)

Differentiation focus: A firm's emphasis on distinction requires distinction within its target
market. All versions of the focal strategy are based on discrepancies between both the target
section of a focuser target segment.
CONCLUSION
As per the above report it has been concluded that strategic management helps to
business to develop different strategy as per the requirement. There are introducing new business
in the fashion retail industry and set the mission, vision and objectives that based on the six
years. There are analyzing the different business, corporate and functional level strategy. On the
basis of these strategy analysis the current strategy to sustain longer time in fashion industry.
Additionally, review the competitive strategy in order to analysis the actual market situation and
apply porter’s generic strategy for the sustainability.

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