Raising Gross Margin and Market Share in Browns Sports Footwear Company

Browns Sports Footwear Company is considering opening new stores in the UK, which presents opportunities for recruiting a talented workforce to effectively and efficiently serve customers' needs. This expansion could lead to higher sales and profits at an international level. The company also has the chance to attract a larger customer base by offering unique designs and comfortable shoes. However, there are threats from competitors such as Adidas and Nike, as well as substitute products available in the market at low costs. Recommendations include focusing on unique product styles, reducing costs through technological advancements, investing in research and development, building a competitive advantage through product development, using market penetration strategies, and improving delivery processes to increase productivity and profitability.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................1
PESTLE analysis ........................................................................................................................1
SWOT analysis............................................................................................................................2
RECOMMENDATIONS.................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Business strategy can be defined as a tool or weapon which provides assistance to an
organization in achieving predetermined aim and objectives. Business strategies are framed by
higher level management which enables the firm to build and sustain competitive advantage over
their rivals (Business strategy, 2015). It entails long term planning which helps company in
increasing the productivity and profitability of company. A well defined business strategy
facilitates effective or optimum utilization of resources (Proctor, 2014). This project report is
based on Browns sports footwear which is the family owned organization. It depicts various
aspects of organization which closely affects the business operations and functions.
PESTLE analysis
It is a tool through which Browns sports footwear can assess the macro environmental
factors which impact 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 as below:
 Political factors: Political factors consist of government policies in retaliation to the tax,
laws and trade restrictions that 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 sports
which develops the opportunity for Browns sports footwear in the business environment.
Government support enables the 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 public, UK government also introduces the
campaign which attracts large number of people towards 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 individuals and thereby, sales revenue of an organization also
increases. 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 is accounted
for 5.7% which states that more money is spend by UK customers as compared to 2010.
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It is the positive sign for industry which provides opportunity to Browns sports footwear
organization for further growth and development.
 Social factors: Social factors place more emphasis on the cultural aspects which closely
affects the decision-making of customers. Awareness of people towards health and safety
aspects also affects the sales of an organization. Growing knowledge and awareness of
UK customers towards the benefit of sports develops new opportunity for Browns sports
footwear. In UK market, government also runs the program to create awareness in 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 up 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 customers over their rivals. As compared to Nike and Adidas, Browns
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 on business activities (Rizzo and Kim, 2005).
Awareness of UK government towards sports increases the opportunities of organization
that operates in footwear industry.
 Environmental factors: Environmental aspects also affect the product offering of
organization. In UK business environment, Browns sports Footwear Company faces high
level of competition from several competitors which affects the strategies of 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).
SWOT analysis
It can be defined as a tool through which Browns sports Footwear Company is able to
assess its strengths and weaknesses. By identifying this, firm can convert its weaknesses into
strengths and take benefit from it. Besides this, it also enables the organization to identify
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opportunities and threats which are present in the business environment. This assessment
provides more benefits to company in terms of high market share as well as profit maximization.
Strengths:
 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 desires of customers effectively and efficiently. New recruits provide innovative ideas which provide assistance to an organization in
converting their strengths into weaknesses (Roederer, Nozzi and Nason, 2011).
Weaknesses:
 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 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 the competitors, firm provides limited offering to
customers which affects the image of the firm.
 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 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 would move to the substitute product because of a wide range of offering
(Djordjevic, 2014).
 In contrary to this, Browns sports Footwear Company fails to take advantage of the
growing area of 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. Firm made big investment in cars and
other areas that were not fruitful for the enterprise (Yüksel and Dagdeviren, 2007). It did
not take it customers seriously which is one of main causes behind the failure of
organization.
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Opportunities:
 Awareness regarding health and safety aspect as well as active lifestyle of 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,
can raise gross margin of the firm.
 Besides this, Browns sports Footwear Company have the opportunity to open new stores
in UK. By recruiting talented workforce, organization is able to serve the needs and
wants of customers effectively and efficiently.
 Along with this, organization can expand its business operations at international level and
thereby, can take benefits in terms of high sales and profit.
 As UK customers spend their disposable income more on cloths and foot-wears, Brown is
having the opportunity to take advantage of this 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 customers.
 Organization also has the chance to attract larger customer base including those who buy
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.
Threats:
 Browns sports footwear Company faces major threat from its competitors such as Adidas,
Nike etc.
 Besides this, company has threat from the substitute products which are available in the
market at low cost. It places negative impact upon the sales margin of company
(Djordjevic, 2014).
RECOMMENDATIONS
 It can be recommended that Browns needs to make focus on the unique styles or designs
of products. Thus, organization becomes able to grab a wide customer base.
 Besides this, corporation should undertake the technological aspects which help it in
reducing the cost of product.
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 Further, Browns sports footwear company need to make investment on research and
development aspect to assess the needs, wants and desires of customers.
 As per Ansoff matrix, in order to build and sustain competitive advantage over rivals,
enterprise needs to make focus on the development of product.
 Along with that, Browns sports Footwear Company should use market penetration
strategy. In this, organization needs to make focus on selling the product and services in
the existing market to raise their market shares.
 In addition to this, firm needs to make improvement in its delivery process to increase its
productivity and profitability.
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REFERENCES
Books and Journals
Dawidowicz, A. L. and Wianowska, D., 2005. PLE in the analysis of plant compounds: Part I.
The application of PLE for HPLC analysis of caffeine in green tea leaves. Journal of
pharmaceutical and biomedical analysis. 37(5). pp. 1155-1159.
Djordjevic, B., 2014. The Nature of Strategic Management. Archives of Business Research .
2(4). pp. 38.
Li, M. and et.al., 2006. Role of matrix metalloproteinase-7 (matrilysin) in human cancer
invasion, apoptosis, growth, and angiogenesis. Experimental Biology and Medicine.
231(1). pp. 20-27.
Proctor, T., 2014. Strategic marketing: an introduction. Routledge.
Rizzo, A. and Kim, G. J., 2005. A SWOT analysis of the field of virtual reality rehabilitation
and therapy. Presence. 14(2). pp.119-146.
Roederer, M., Nozzi, J. L. and Nason, M. C., 2011. SPICE: Exploration and analysis of post‐
cytometric complex multivariate datasets. Cytometry Part A. 79(2). pp. 167-174.
Yüksel, I. and Dagdeviren, M., 2007. Using the analytic network process (ANP) in a SWOT
analysis–A case study for a textile firm. Information Sciences. 177(16). pp. 3364-3382.
Online
Business strategy. 2015. [Online]. Available through: <http://businesscasestudies.co.uk/business-
theory/strategy/business-strategy.html#axzz3pvo3ZYPe>. [Accessed on 29th October
2015].
What is PESTLE Analysis?. 2015. [Online]. Available through: <http://pestleanalysis.com/what-
is-pestle-analysis/>. [Accessed on 29th October 2015].
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