Applied Corporate Strategy for VF Corporation

This report covers external and internal analysis of VF Corporation using PESTEL analysis, Porter's Five Forces Model, VRIO model, and Value Chain analysis to develop effective corporate strategies.

APPLIED
CORPORATE
STRATEGY

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
External Analysis.............................................................................................................................3
Internal analysis...............................................................................................................................6
Strategy Evaluation........................................................................................................................11
CONCLUSION..............................................................................................................................13

INTRODUCTION
Corporate Strategy is defined as the clearly defined policies and long-term vision that are
established by the organisation to create corporate value as well as motivate business employees
to implement defined strategies with efficiency to enhances consumer satisfaction level. It is
considered as the continuous process that requires regular efforts to accomplish defined goals
and objectives of organisation. In this report chosen organisation is VF Corporation, founded in
1899 and headquarter situated in Denver, Colorado, U.S. It is an American global apparel and
footwear organisation. This report covers external environment that compromises pestle analysis
and porter’s five forces model. Along with that internal analysis is conducted to identify business
resources and competencies, values chain and VRIO as well as merger strategies is evaluates
through using TWOS matrix.
TASK
External Analysis
PESTEL Analysis
There are various factors are included in business environment that impact on
organisational performance and efficiency in positive as well as negative manner. Pestle analysis
is defined as the systematic framework that enable organisation to identify different external
factors that influence business policies, strategies and performance level. Factors of Pestle
analysis in the context of VF Corporation organisation are explained below:
Political factor: Political factors have strong influence on VF Corporation long-term
profitability and sustainability and profitability. Presence of business at international level
enhances the sensitivity of this factor because every country has their own political conditions
that created opportunity as well as risk to business (Arbogast, and Kumar, 2018). There are
various political factors such as political stability or instability, frequent changing policies,
government interventions, trade restrictions and taxation policies that need to be considered by
the VF Corporation for developing effective strategies and policies. Trade restrictions and
BRIXIT impact on business performance and efficiency of VF Corporation that create threat for
organisation.
Economic factors: It is very important for the VF Corporation to analyse and understand
all economic factors such as labour market conditions, foreign exchange rate, interest rate and

inflation as well as saving rate. Understanding of economic factors enable business to develop
policies GDP growth rate of UK is very high that put the economy of country at 6th position at
international level and country’s foreign direct investment is also high that help VF Corporation
to attain the objective of growth and development. Respective organisation analyses UK
economic condition than develop strategies accordingly that lead business towards attaining its
goals and objectives in best possible manner.
Social factors: Business culture have strong influenced from various social factors such
as societal norms, values, trends, consumer spending pattern, shared beliefs and power structure.
It is important for the VF Corporation to analyse demographic trends properly than provide them
provide them products and services to customers. Now consumers of UK are using online
shopping or e-commerce that helps organisation to provide its products quickly. Spending
pattern and disposable income of consumers is very high in UK that helps VF Corporation to
gain competitive advantages.
Technological factor: Technological factor includes technological advancements,
diffusion of technology, innovation and other aspects that help VF Corporation to take better
decisions and differentiate organisation from other competitors (Bolisani, and Bratianu, 2017).
Respective organisation uses social media marketing, research and technological innovation to
provide spread business awareness among wide market and provide better quality products and
services to customers. UK is the leading research and development country that helps VF
Corporation to perform its operations with efficiency and economy provides great opportunity to
the organisation.
Legal factors: There are various legal rules and regulations that are introduced by the
government of UK that must be complied by the business to operate their operation in country
with efficiency and effectiveness. Implementation or evaluation of these laws help business to
avoid serious troubles and provides competitive advantages (Bolton, Muscaand Samama, 2020).
There are some laws such as consumer protection laws, intellectual property laws, employee
protection laws that enable business to run business operations properly without facing any legal
complications.
Environmental factors: Growing environmental consciousness as well as regular
changing climate or environmental conditions make it important for organisation to analyse all
factors of environment in proper manner. It is essential for business to follow all environmental

standards and related laws and regulations that vary from one market to another. VF Corporation
adopts various strategies such as renewable technologies, recycling and waste management
approaches as well as enhance the use of eco-friendly material to produce its products. It helps
business to protect environment from harmful impacts and maintain business strong image in
market.
Porter's Five Forces Model
Porter’s five forces model is defined as the framework that enables an organisation to
analyse the competitiveness among industry and develop effective policies to maintain business
differentiate image in competitive business environment. It is defined as the most effective tool
the facilitates organisation to adjust their business strategies that are effective in business
environment in which it operates their operation and activities. it helps organisation to measure
degree of competition within industry. Factors of porter’s five forces model in the context of VF
Corporation organisation is mentioned below:
Threat of new entrants: It is related to how new market player impose threat or create challenge
to existing organisation in market place. If industry gains higher profitability and there are low
barriers to enter are low than it attracts large number of organisation to operate their operations
in industry. VF Corporation faces high competition because of less entry regulations and lower
switching cost (Brickley, Smithand Zimmerman, 2020). There are various actions are taken by
the VF Corporation to reduce the threat from new entrants such as bringing new and innovative
products and maintain economies of scale that reduce organisational production cost and attract
customers towards organisation.
Bargaining power of suppliers: VF Corporation which is apparel clothing organisation purchase
raw material from numerous suppliers. If suppliers in the dominant position than they can reduce
VF Corporation profitability margin. There is low bargaining power of suppliers for respective
organisation because it has maintained strong relationship with suppliers who provides quality
material to organisation at affordable prices (Cooper, 2017). VF Corporation builds efficient
supply chain with multiple suppliers as well as experimenting with products designs through
using different material so business can use alternatives at the time of material uncertainty.
Bargaining power of buyers: Bargaining power is defined as the pressure that exerted by
the customers on organisation with the objective of occurring high quality products at affordable
prices. It is directly impact on VF Corporation organisation because strong bargaining power of

customers reduces business profitability and make industry more competitive. There are large
number of organisation in same industry that provides various options to customers to purchase
their desirable products at comparatively lower price. VF Corporation manage bargaining power
through increasing and diversifying customer base. Organisation adopts product diversification
strategy, introduce new products as well as targeting new market segment to attract higher
number of customers. Along with that organisation also conduct effective promotional activities
that enhance business products awareness in market place.
Rivalry among industry: It is related to the number of competitors that are operating in
same industry that enhances the competition level as well as limit each other growth potentiality.
VF Corporation operates its operations and activities in competitive industry that directly impact
on business performance and profitability. Respective organisation takes various actions to
remain competitive in industry such as building sustainable differentiation and collaborate with
competitors.
Threat of substitute products: Substitute products are defined as the products that need to
similar needs and demands of customers in different manners. Availability of substitute products
impact on organisational profitability. VF Corporation deals in appeal industry that includes
various organisation that provides same products to customers (Corbetta, and Morosetti, 2020).
VF Corporation tackle the threat of substitute products through understanding customers core
needs and demands than provide them products accordingly that satisfy them. Organisation also
take actions to increase switching cost for the customers so they retain with organisation for
longer period of time.
Internal analysis
Internal analysis is defined as the examination of business internal competencies, resources and
processes. Analysation of internal resources enable business take efficient decisions that enable
business to lead their operations towards growth and development. VF Corporation organisation
uses various models and framework to analyse business internal competencies that help business
to develop effective strategies properly.
Resources
There are various tangible and intangible resources that are used by organisation to run its
operations in efficient manner and attain determined goals and objective in determined time
frame. Some resources of VF Corporation are mentioned below:

Tangible resources:
 Physical resources: There are various physical resources such as plant, equipment,
machinery, infrastructure and other resources that helps VF Corporation to perform its
operations in appropriate manner.
 Human resources: VF Corporation has skilled, talented and experienced human
resources that enable business to perform operations with great effectiveness (Crifo,
Escrig-Olmedo, and Mottis, 2019). As per data of 2019, 50000 are involved in business
operation.
 Financial resources: VF Corporation has 10.31 billion total assets and 3.68 billion dollar
total assets that help business to perform all defined operations to attain business goals
and objectives.
Intangible resources:
 Intellectual property and patent is very important for organisation because it helps
business to protect its process and products from being used by other parties.
 VF Corporation maintains its brand reputation through provide quality products to
customers.
Competencies
VRIO Model
VRIO model is referred as an analytical technique that enables business to evaluate its
resources and manage them in appropriate manner so business gain sustainable competitive
advantages (Earnhart, Khanna, and Lyon, 2020). Factors of VRIO model in the context of VF
Corporation organisation are mentioned below:

Valuable resources: Resources can be valuable when it allows firm to attain competitive
advantage in market. It also allows VF corporation to develop strategies, exploit various
opportunities and also helps them to mitigate threat present in business. It also helps business to
improve efficiency as well as effectiveness. VF corporation have various valuable resources
which are mentioned below:
 Employees: These are one of important asset of VF corporation that are contributing
their efforts towards attainment of goals and objectives of company (Hutahayan, 2020).
These employees are highly skilled, talents and loyal for their organisation.
 Financial resources: VF corporation has valuable financial resources that allow VF
corporation to expand operation of company. It also helps business to manage its day to
day operation in effective manner and allow them to maximise return of company.
 Patent: Patent resources allow VF corporation to protect intellectual property of
company that allow them to differentiate its products and service.
 Distribution channel: VF corporation has valuable distribution channel that allow
business to reach to its customers and also helps them to increase revenue of firm.
Rare resources: It can be defined as resources which can be acquired and access by only limited
companies. If these resources can be access by different companies, it can be valuable. It allows
firm to gain competitive advantage in market and also provide competitive advantage to firm. VF
corporation have various rare resources which are mentioned below:
Financial resources: VF corporation has rare financial resources which make it easier for
them to invest in any activity of business in order to differentiate its products.
Patent: VF corporation has rare resources which does not allow competitors to use its
technology and other intellectual property.
Distribution network: It is another rare resources of VF corporation that allow them to
reach to target customers of company and also helps them to increase sales of company.
Inimitability: Inimitable resources are those which cannot be imitable by different companies
present in market and create threat for business. These resources provide competitive advantage
to firm for long term and allow firm to get advantage of first mover (Lorincová, Miklošík, and
Hitka2022). VF corporation have some inimitable resources which are mentioned below:
 Patent: VF corporation has inimitable patent resources which cannot be acquired by
other company that provide them long term advantage.

 Distribution network: VF corporation has inimitable distribution network which cannot
be gain by other companies and provide them advantage of first mover.
Organised: Resources cannot along create advantage for company as in order to take advantage
of them, business needs to organised them in effective manner. It is important for companies to
coordinate and assemble resources in effective manner. VF corporation have some organised
resources which are mentioned below:
 Distribution channel: VF corporation has organised distribution channel which is
important for companies to distribute its goods to customers and allow them to increase
satisfaction of customers.
Value Chain analysis
Values chain analysis is defined as the framework that is used by the VF Corporation to
identify its primary and secondary activities and consider the in business strategies to gain
competitive advantages (Ramani, and Ward, 2019). Both primary and secondary activities in the
context of VF Corporation are explained below:

Primary Activities
These activities are related to the activities of production and sales of organisational goods and
services. Some primary activities are mentioned below:
 Inbound Logistics: Inbound logistics is related to receiving material from suppliers,
storing as well as distributing it to all department of VF Corporation so process of
production run in smoother manner. Organisation adopts customer-centric approach in
this stage.
 Operations: Operations comes into consideration when raw material arrives and it is
related to converting raw material into finished products (Valentinovna, 2018). VF
Corporation concentrates on packing, manufacturing as well as testing of the products.
 Outbound Logistics: It includes activities that are related to delivering final products to
customers. VF Corporation organisation focused on material handling, transporting them
to customers with efficiency.

 Sales and Marketing: There are various marketing strategies that enhance business
awareness and improve business sales. VF Corporation uses social media and internet
marketing to improve business sales and profitability. Services: Services provides better buying experience to customers, VF Corporation
provides after sales services to customers that retain them with organisation for longer
period of time.
Secondary Activities
 Firm Infrastructure is secondary activity of organisation that is related to quality
management, accounting and other. Effective infrastructure helps business to gain
competitive advantages in market.
 Human Resource Management is the core competency of VF Corporation that enable
business to perform defined operations with efficiency and effectiveness.
 Technology Development is related to implementing latest technology in business
process that reduce business cost and help to perform defined operations with greater
efficiency.
 Procurement is related to purchasing the raw material that are helpful to run business
operations properly like equipment, supplies etc.
Human Resources is the most effective competencies of VF Corporation that enable it to
perform defined operations with efficiency and effectiveness (Vartholomatou, Pendaraki, and
Tsagkanos, 2021). Respective organisation analyses all these primary as well as secondary
activities than develop effective strategies and planning that lead business towards growth and
success as well as gain competitive advantages over other competitors.
Strategy Evaluation
TOWS Analysis
Strengths-Opportunities strategies
 Technology development, human
resource, inbound logistics, marketing
and sales are the strength of VF
corporation. These strengthen areas
Weaknesses-Opportunities strategies
 In clothing and apparel industry higher
level of competition is found that limits
business market shares and growth
opportunities but in case VF

facilitates organisation to gain
opportunity in market through
introducing other supportive products
in market that will improve business
sales and customer base.
 VF corporation conduct various
marketing activities and distribute its
innovative products to customers as a
free sample that attract large number of
customers towards organisation.
 Organisation deals in diversify products
such as Jeanswear, sportswear and
other that will enhance business market
share.
corporation bring innovation and
creation in its products than it will help
business to attain higher market and
profitability.
 Less brand awareness in global
business environment is also the
weakness of organisation that impacts
business reachability but through
adopting different marketing strategies
that will helps business to gain
competitive advantages
(Vartholomatou, Pendaraki, and
Tsagkanos, 2021).
Strengths-Threats strategies
 Efficient and skilled human resource is
the strength of VF corporation so it is
important for the organisation to recruit
employees through systematic process
that reduce the threat of unemployment
and competition from the organisation
because skilled employees lead
business towards right direction.
Weaknesses-Threats strategies
 VF Corporation faces threat from
Brexit, growing raw material cost and
higher coopetition level that can create
threat for the business higher material
cost improve overall cost of production
process and impact its sustainability in
competitive business environment.
Acceptability:
With the objective of analysing acquisition strategy, VF Corporation uses Mendelow’s
matrix that is used for evaluating stakeholder’s reactions.
Mendelow’s Matrix
Low Level of attention High

Low
Power
VF Corporation analyse all these stakeholders on the bases of their power and level of attention.
It is analysed that stakeholders are categories in four parts such as minimum efforts who consist
low power and attraction, keep informed who possess low power and high attention level in
business such as suppliers, competitors so these stakeholders must be informed, keep satisfied
stakeholders who have high power and low attraction (Waitzer, 2018). Key players are the
stakeholders who have high power and level of attention who have interest in business operation
as well as impact organisational functionality.
Feasibility
It is important for the VF Corporation to develop effective strategies that are feasible as well as
quite easy to implement in business without requirement of major decisions and additional
efforts. Respective organisation has skilled, talented and experienced staff members who can
perform business operations with greater efficiency and effectiveness. In the process of
implementing strategies experienced staff members plays important role and enhance business
feasibility on existing competitive market place (Wiersema, and Beck, 2017). Along with that,
financial resources that includes cash, holding of stock etc. that can be obtained by the
organisation from banks. Sufficient amount of financial resources help business to run its
operations in proper manner.
A Minimal effort B Keep informed
Suppliers
Alexion employees
Competitors
Customers
C Keep satisfied D Key players
management (facilitator)
Alexion management
(facilitator)
shareholders (blocker)
Alexion shareholders
(facilitator)
US Federal Trade Commission
(blocker)

CONCLUSION
As per above report, it can be concluded that corporate strategy is important for the
organisations to develop effective corporate strategy to identify as well as address areas that need
improvement. It encompasses various corporate actions that enable organisation to achieve
business objectives and gain competitive advantages. It is important for the organisation to
analyse external and internal factors and develop strategies that help business to run its
operations in competitive business environment.

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