Just Jeans Cost Leadership Strategy Analysis

This assignment analyzes Just Jeans' cost leadership strategy in the competitive retail landscape. It examines their financial performance, identifies growth opportunities, and discusses the importance of skills upgrading and technology development to successfully implement this strategy. The analysis considers Porter's generic strategies and stakeholder perspectives.

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Business Communication
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Executive summary:
The report is prepared to analyze the corporate and financial performance of selected cloth
retailer of Australia that is Just Jeans. It incorporates the discussion of market size, trend and
anticipation of their possible growth in future. Several strategic options have been demonstrated
that helps in deducing the recommended strategy. Final strategy recommended to Just jeans
would be done by adopting appropriate leadership strategies and developing skills among
employees and staffs. In the later part of report, measures taken for monitoring and controlling
performance is demonstrated.

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Table of Contents
Introduction:....................................................................................................................................4
Market size and trend:.....................................................................................................................4
Financial and Corporate performance:............................................................................................5
Strategic options:.............................................................................................................................6
Final recommended strategy:...........................................................................................................7
Implementation of Final strategy:....................................................................................................8
Monitoring and control of future performance required for implementing strategies:...................9
Structure and culture, Reward system and Leadership relating to implementing strategies:..........9
Specific issues relating to strategy implementation:.....................................................................10
System, skills and staff related to implemented strategies:...........................................................10
Conclusion:....................................................................................................................................10
References list:...............................................................................................................................12

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Introduction:
Just Jeans is a clothing chain store operated by Just Group headquartered in Melbourne in
Australia and is a denim destination for customers. It operates via online exclusive stores and has
over 246 stores operating in Australia. It was found in 1970 and the organization evolved from
small retailer of denim jeans to much loved and recognized brand in both the countries
(justgroup.com.au, 2017). It has been the most trusted and creative denim provider that has a
critical understanding of the casual wear and denim market accompanied with its ability and
dedication to meet needs of customers.
Market size and trend:
Over the year, Just Jeans has delivered strong growth in denim business resulting from
the implementation of strategy of “Anchored in Denim”. Opening of Mid-City Sydney CBD
helped in delivering results that are ahead of expectations and improved experience of customers.
A strong brand campaign was delivered from launching of new brand ambassador together with
Stenmark twins. Just jeans are owned by premier Investments that remained the leading player in
year 2016. Sales of jeans are impacted by at leisure trend that shows no signs of slowing down.
The main drivers of trend are women with purchasing decisions are influenced by fashion, brand
and style. Current value growth of 2% is recorded by jeans as it is positioned as a staple item in
the wardrobe of customers. It is anticipated that selling of jeans would record modest overall
value of growth of 2% value compounded annual general growth at constant 2016 prices to 2021
(justgroup.com.au, 2017).
Just jeans have been expanding their business in countries with strong economical
positions and they have captured fashion market in countries like Australia. The geographical

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diversification of country has made a remarkable progress. Graph presented below depicts the
present condition of market in Australia. Different products market trend has been shown in the
bar graph.
Market trends for different products of Just Jeans:
(Source: justgroup.com.au, 2017)
Fashion industry is provided with a great scope in Australian market and it is
demonstrated by growth rate of Just Jeans. Organization has recorded a growth rate of 3.3%
annually and in a year more than fifteen outlets were added. It is believed by company that their
overall performance will improve in Australian market by following business strategies of
mergers and acquisition (Peteraf et al. 2014). Merger of company with Smiggle is one of such
instance.

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Financial and Corporate performance:
One of the prime objectives of Just jeans is to provide shareholder with long-term wealth
creation. Superior returns to shareholders have been delivered to shareholders in financial year
2016. A record sales and earnings before interest and tax is reported by Just jeans due to its
disciplined approach to inventory management, cost and rents and targeted capital investments
accompanies with string performance in their sales figure. There was a surge in online stores and
retail stores. Earning before profit and tax was more in year 2016 as compared to year 2015 with
the total earning of group at $133.3 million compared to $ 129.2 million in previous year. Total
value of sales was up in the current year. Just jeans in achieving growth in value of total sales
and like-to-like sales (justgroup.com.au, 2017). The sourcing capabilities of organization have
been enhanced due to continuous improvement in products along with maintaining a sound
hedging position of foreign exchange. Organization is committed to deliver long-term goal
through effective use of relationship and resources.
Strategic options:
Just jeans have expanded in several markets of different countries and in order to increase
their market share and growth rate, they continue to open new stores. Diversification is regarded
as the most risky strategy that an organization adopts for increasing their share of market. It is
certainly possible that when an organization diversifies, there products might not be accepted in
new markets and thereby fail to make desired sales. However, Just jeans have diversified into
several markets by emphasizing on a range of brand through a target demographic breadth and
appealing sufficiently to enable a national footprint. Continuous investment is made by
organization in their different products so that they remain relevant to changing taste of
customers and remaining at front position of their target market (Tanwar 2013).

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In order to identify the areas where change is required needs to perform situational
analysis of Just jeans. The expanding future market size of clothing is one of the weaknesses of
Just jeans. It is perceived that for maintain seamless working capital, organization might avail
loans at higher rates. Increasing cost of production is another issue of organization. Income level
in Australia is at constant increase that would help in increasing sales of product. However, there
are some issues faced by Just Jeans resulting from its unstable cash flows and growing market
and new entrants in cloth retailer business.
Final recommended strategy:
The final recommended strategy would be the implementation of model of Porter’s
generic strategies. It is recommended to Just Jeans to follow strategies proposed by Porter that
will help them in gaining competitive advantage over their competitors and new entrants in the
fashion market. Nonetheless, Just jeans has acquired reputed market position in its home country
that is Australia by providing quality and diversified range of retail products and by focusing on
differentiation focus strategy.

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Porter’s generic strategies:
(Source: Merchant, 2014)
Just Jeans build their brand awareness and were successful in increasing their total value
of sales by targeting demographic of casual wear buyers. Organization has been able to serve the
need of target segments by providing differentiated products that is different from segments of
other industry. Focus of cost differentiation lacks within the organization and therefore, they
need to exploit differences in behavior of costs in their segmented markets. The market segments
needs to be clearly defined that will enable them to target specified markets by differentiated
range of product lines. Focusing on differentiation will help Just jeans exploit specific needs of
buyers in certain segments (David & David, 2015). On other hand, focusing on target segments
by buyers should be able to serve some unusual and specific needs of buyers. Therefore, Just
jeans are required to focus on differentiation that will seek differentiation in their targeted
segments. Furthermore, differences in behavior of cost in different segment should be identified
that will help in gaining advantage in terms of cost in their targeted segment over their
competitors. In nutshell, it can be said that organization needs to focus in building cost
leadership strategy to sustain in retail fashion industry.
Implementation of Final strategy:
Three strategic options are determined using suitable criteria that comprise of
acceptability, feasibility and suitability.
Acceptability- Strategies of cost leadership can be implemented by organization in
successful way in short time period. After the suitable strategic option is implemented, there is a
fair chance of increase in company’s financials. It is indicated from cost benefit analysis that

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there will be benefits to company where market oriented strategies are opted and there is
upgraded technology in stores. Therefore, cost leadership strategies and focusing on
differentiation within the targeted segments should be opted by company.
Suitability- Suitability deals with integration of weakness and strength of several sought
strategies and their effective implementation. The implementation of strategies of cost leadership
is assisted by market orientation and environment of Just jeans.
Feasibility- Feasibility indicated the operation of organization in an environment where
such strategic options have already been implemented. In this regard, strategic options need to be
supported by development of competencies and other factors such as internal skills of
employees. Just Jeans can occupy leading position in fashion market if they focus on strategies
leading to gain a leadership position.
Monitoring and control of future performance required for implementing strategies:
The strategy of cost leadership and differentiation focus within their target segments is
considered to be strategic fit for company to deal and overcome the issues they are facing in
current scenario. It is depicted by efficiencies in their operation and various environmental facets
of Australian market. The measurement and control of recommended strategic option can be
done clearly communicating the objectives and determining role and employees along with
periodically reviewing the outcomes after strategy implementation. Control can be exercised by
incorporating stakeholders’ views as ownership helps in bringing accountability. Progress of the
implemented strategy can be tracked in a systematic and deliberate manner regularly during
implementation process.

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Structure and culture, Reward system and Leadership relating to implementing strategies:
The performance measurement and rewarding employees for success of the
implementation can be done by executive compensation system. Employee performances in
context of successful strategy implementation and performance of organization should be
rewarded by way on monetary benefits or non-monetary benefits. Rewards for performance
would include compensation, appreciation, recognition, perks and benefits. The selected strategy
has the fair chance of successful execution if it is backed by appropriate style of leadership in
organization (Freeman & McVea, 2015).
Specific issues relating to strategy implementation:
Implementation of strategies as provided by porters can faced some challenges such as
poor coordination among some functions of organization, rampant change in technology and
ongoing change in references and taste of consumers. Technical leadership can be regarded as
another issue that might be faced by company in strategy implementation. Some internal
challenges of organization creating difficulty in implementation of strategy are skills and ability
of managers, regulations of government and community expectations (Thomas & Stephens,
2015).
System, skills and staff related to implemented strategies:
Implementation of strategic option requires staffs to upgrade their skills in accordance
with strategy requirement. Management system should be formulated according to business
strategic requirements. Skills of staffs and employees need to be upgraded so that it leads to
seamless strategy implementation. A new technology development group is required to be
promoted by business for implementation of strategy (Mishra et al. 2014).

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Conclusion:
Just Jeans is one of the trusted and creative denim providers that has been experiencing
continuous growth and expansion of their business. However, it is required by organization to
push up their sales and profitability position in today’s competitive scenario prevailing in retailer
world. From the analysis of their financial and corporate performance, it is perceived that they
would experience remarkable growth opportunities. Therefore, they have built up the strategy of
cost leadership. This will enable them to identity cost behavior of different segments and taking
steps to reduce the cost and boosting sales and thereby profitability figures.

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References list:
Christensen, M. (2014). Communication as a strategic tool in change processes. International
journal of business communication, 51(4), 359-385.
David, F., & David, F. R. (2015). Strategic Management: A Competitive Advantage Approach,
Concepts and Cases.
Freeman, R. E., & McVea, J. A. (2015). A Stakeholder Approach to Strategic Management (No.
01-02).
Hill, C. W., & Jones, G. R. (2013). Strategic management theory. South-Western/Cengage
Learning.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Merchant, H. (2014). Configurations of governance structure, generic strategy, and firm size:
opening the black box of value creation in international joint ventures. Global Strategy
Journal, 4(4), 292-309.
Mikkelson, A. C., York, J. A., &Arritola, J. (2015). Communication competence, leadership
behaviors, and employee outcomes in supervisor-employee relationships. Business and
Professional Communication Quarterly, 78(3), 336-354.
Mishra, K., Boynton, L., & Mishra, A. (2014). Driving employee engagement: The expanded
role of internal communications. International Journal of Business
Communication, 51(2), 183-202.

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Peteraf, M., Gamble, J., & Thompson Jr, A. (2014). Essentials of strategic management: The
quest for competitive advantage. McGraw-Hill Education.
Tanwar, R. (2013). Porter’s generic competitive strategies. Journal of Business and
Management, 15(1), 11-17.
Silveira, P., & Carlos, J. (2013). The need for successful communication in intercultural and
international business settings: Analytic and comparative studies, new trends and
methodologies.
The Just Group. (2017). Justgroup.com.au. Retrieved 17 October 2017, from
http://www.justgroup.com.au/asp/people.asp
Thomas, G. F., & Stephens, K. J. (2015). An introduction to strategic communication.