Business Contexts and its Management - Industry Trend Report and Client Report

The report analyzes the industrial trend and suggests a few strategic plans for the overall growth of the organization. It critically analyzes the challenges faced by an organization and the measures to be considered. The report is based on ASOS, an online fashion retailer, and includes an external and internal environment factor analysis, the influence of change and culture in operational management, and a stakeholder analysis. The client report suggests strategic planning for ASOS using the PDCA method.

Business Contexts and its
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1: Industry Trend Report......................................................................................................3
External environment factor analysis...........................................................................................3
Internal environment factor analysis............................................................................................4
The Influence of change and culture in Operational Management .............................................5
Stakeholder Analysis of ASOS Organisation..............................................................................8
PART 2: Client report......................................................................................................................9
Strategic planning of ASOS organisation....................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1
APPENDIX......................................................................................................................................2

INTRODUCTION
In the growing competition, its important to understand the business context and its
influence on management decisions. Different strategical tools need to be used to clearly define
the position of a business including the impact of internal and external environment. The report
will analyse the industrial trend and suggest few strategic plan for the overall growth of the
organisation. The report will critically analyse the challenges faced by an organisation and the
measures to be considered.
PART 1: Industry Trend Report
Introduction & Identifying Issues
This report will be based on ASOS (E-commerce industry), a online fashion retailer. The
company was set up in 2000 by Nick Robertson, Andrew Regan, Quentin Griffiths and Deborah
Thorpe. The E-commerce company deal in a wide range of fashion clothing for man, woman and
children. The cited company provide worldwide free shipping that has helped in gaining more
customer satisfaction even when the entire world was facing crises. The report will analyse the
strategic plan of the company, market size and the opportunities. Growing competition in the
market and high non strategic cost is the major issue faced by the company.
External environment factor analysis
In UK, the e-commerce industries revenue is expected to reach US$199.90bn in 2022. the
online industry market penetration of UK is 82% in 2021 and the largest segment is fashion
industries. ASOS generated £3.91 billion revenue in year 2021 in comparison with £2.73 billion
in 2019, which clearly show a increase. Revenue has grown by approx 19%. It market include
over 25 million people all over the world and almost 40% is based in UK.
Red ocean vs blue ocean strategy: Red ocean strategy refers to when a company struggle
to secure a position in the market whereas blue ocean strategy is when a company make its
position in the required market (Au and Tucker, 2018). In context with ASOS, which has shifted
from red to blue ocean strategy as initially a company focuses more on reduce cost to attract
more customer and create a place for themselves in the existing market. The focus was more on
the value based product according to the demand to sustain in the market place. As it has

successfully obtained the market, a gradual shift has been seen from red to blue ocean strategy as
now the company emphasis on free delivery worldwide and the customers can directly buy from
their website. Around 1 million customer visit companies website in 1 month. In response, even
when the world was going through pandemic and most companies hardly able to survive, a huge
profitability is seen in E-commerce industries and ASOS has become a leading name in online
fashion retailers.
The main external factors that affect the industry is the competition. As everything is
going online, the competition has increased. In today's busy world, online shopping helps to save
time and energy. Without going out, you can get all the pleasure just by one click. Easy home
delivery, return facility and easy comparison of prices are the key factor (Fitrianingrum, 2020).
In the pandemic situation, online industry is been highlighted and emerged as an saviour to many
problems as delivering day to day needs and basic requirement to the door step. When entire
world was closed, the E-commerce industry continue to function.
Research regarding the latest fashion trend and meeting the demands of the customers is
the priority for the company due to competition in the market. The company has to adopt to the
latest technology. Promotion of the products through social media can be profitable to the
company which will lead to more customers.
Internal environment factor analysis
The internal environment of the company depends upon how it operates. It includes
organisational culture, ethics, employees, customer, technology, management and strategies
applied (Kwilinski and et.al., 2019.). ASOS VRIO Analysis is done is to obtain the internal
information about the organisation. VRIO framework stands for valuable, rare, imitation and
organisation (Miethlich and Oldenburg, 2019). This tool is used to understand the organisation
internal strength, available resources and capabilities for long term advantage to the organisation.
The organisation review their VRIO constantly because of the change in the market, competition
and customers. Valuable: it refers to the resources which add on to the value of ASOS. The resources
which are valuable to the organisation are their technology, skilled employees, market
image and position, customer satisfaction, range of product, financial resources, flexible

supply chain and management team which aims for the sustainable development of the
organisation. Rare: Valuable resources are judged on the basis of rarity, as it means that if the
resources are not rare then it can be easily used by the competitors and easily replaced the
company's position in the market. ASOS has been continuously investing to build a
strong bond between the customer and the organisation. Loyalty matters to attract more
customers. Imitation: In today's time, most company is facing the problem of duplicacy as the
competitor company would acquire the market by launching similar product in lower
price. The valuable and rare resources of ASOS are costly for other organisation to take
over the market. The company has its unique style which cant be copied at lower price.
 Organisation: This element depends upon the ability and capability of an organisation to
stand in the market by making proper use of its valuable and rare resources which are
tough to imitate by the competitor company.
External and internal environment has a major impact on ASOS. Factors like market
competition, low price and high quality, customer satisfaction, technology, high productivity,
human and financial resources, motivated and encouraged employees and the capability of the
company to utilize these resources to the fullest.
The Influence of change and culture in Operational Management
The influence of change in the competitive market
Organisation is facing challenges comprising the internal and external environment.
Change is the crucial factor in the growth of any organisation. Factors that affect the organisation
are changing continuously so there is a need to adapt to these changes for the sustainable
development of ASOS. The need to change arises due to competition, change in needs and
demand of the consumer, better price and quality product. The organisation compare the strength
and upcoming threats for a company and make a plan to cope up with the competitors and to be
successful. Lewin's change model is a guide to understand the organisational change (Hussain
and et.al., 2018.). This model 3 stages of change that is Unfreeze, Change and Refreeze.

 Unfreeze: It is the first stage in the Lewin's change model wherein to recognize the need
for changes that the company will undertake, the importance for the changes and
motivating the companies employees to accept the change. ASOS identified the need of
more warehouses, easy return policy which is cost effective. During the covid time,
ASOS faced difficulty in coping up with safety measure guideline by the UK
government. ASOS has developed a strategy to convey the area of change to the
employees and the objective behind it. Change: It is the second step in the Lewin's model. The employees were explained the
action plan through which the company desires to achieve the objectives. Holding regular
meeting and open communication between the employees and the leaders will enhance
the employee acceptance for change. ASOS made an partnership agreement with DPD
group so that the buyers can donate their unwanted clothes to the needy one as a part of
their charity champaign. During covid, ASOS switched all employee communication
system to ASOS voices for virtual sessions by providing transparency and encouraging
open dialogues
 Refreeze: this is the final step of Lewin's model of change that refers to the freezing of
new change. All the strategies and policies have been implemented with proper training
and support of the employees. Proper accomplishment of desired change, motivate the
employees to accept the change. ASOS opened more warehouses for launching new
brands (Lewin's 3-Stage Model of Change: Unfreezing, Changing & Refreezing. 2022).
The influence of culture on management decisions
Organisational culture is responsible for the long term growth of a company and generate
value to the stakeholders (Hadavi Nejad, Naghi PourFa and Danaei Fard, 2020.). Organisational
culture refer to the values, beliefs, policies, ethics and respect among the stakeholders, leaders,
managers, employees and the customers. Company believes in a healthy work culture which
can't be created in a single day rather it takes collective efforts by the company. According to
Edgar Schein model of organisational culture, there are 3 level of organisational culture
(Coghlan, 2021). That is Artifacts: The stage is all about what one see in the organisational structure. Vision and
mission statement, dress code of the employees, physical arrangement of the furniture,

symbol or logo, workplace design, etc. which wont give the insight of the company.
ASOS has an easy going culture with no dress code. The interior of the office is the
complete blend of style with fashion. Values: This level includes the value and ethics of the employees. Individual values of
the employees plays a major role in setting the organisational culture. Shared vision and
the attitude of the employees of ASOS helps in creating healthy workplace environment.
 Assumed Values: This stage cant be seen but has an equal importance in formulating the
culture of an organisation. The brand value of ASOS, feeling and thoughts of the
employees has a vital role in the culture of the organisation.
Effectiveness of operational functions
Managing the resources to attain higher productivity, lower cost and achieving the
ultimate company goal of customer satisfaction (Kamrani and et.al., 2021). The Total Quality
Management (TQM) is based on meeting the demands of the customers with the positive efforts
by the management and utilising the resources to the fullest (Mateos-Ronco and Hernández
Mezquida, 2018).
 ASOS focuses on providing the best in class services to its customers through after
purchase call or email, easy return policy. As covid 19 has impacted customer lifestyle,
ASOS has further increased the product choices and availability of the product in better
price.
 The company consist of trained, skilled and best designers who are totally committed
towards the company for higher productivity and increased sale. The employees are
motivated and rewarded according to the company's policy.
 The company is open to all the feedbacks, with a strategical approach to improve. ASOS
is focusing in reducing non strategic cost.
 Regular measures has been taken into account for quality assurance to attract more
customers.
 Change is ongoing. The company is making continuous efforts to be creative and
innovative for the sustainable development.

Stakeholder Analysis of ASOS Organisation
Shareholders plays an fundamental role in the company to achieve long term objectives.
Stakeholder have impact on the decision making depending the power and interest they have in
the company which can be financially, position, career growth, etc. ASOS internal stakeholders
are the employees, directors and shareholder. The board of Director include Chairman, Chief
Executive Officer, Senior Independent Director and Non-executive Directors, the one who has
high authority. External stakeholders are the suppliers, creditor or investor,local community,
government and the most important customers of ASOS.
(Using a Power/Influence Grid (Power/Influence Matrix) in Stakeholder Prioritization. 2021).
According to the Power and Influence grid, Stakeholder of ASOS are segregated
through power and interest they possess in the company: High power and high interest: These are the stakeholders which has high power and
interest in the companies decision making. They are the directors and the top officers in
the company. Customers too plays a major role. High power and low interest: They are the investors, creditors and suppliers in the
company without whom the project can't be executed.

 Low power and high interest: These are the local community and government which
ensures the proper consideration of rules and regulation in the company.
 Low power and low interest: They include the members of the general public who has
low interest in companies decision making and strategies.
It has been concluded from all the above information that ASOS is the leading fashion
retailer, who's gross revenue has increased during the time of pandemic which clearly displays
the organized functioning of the strategies implemented by the stakeholders of the company.
More focus was given on the easy return policy, customer satisfaction to compete with the
market competition and reducing the non-strategic cost.
PART 2: Client report
Strategic planning of ASOS organisation
ASOS is the heart of the online fashion industry which encourage passionate and
enthusiastic people. Planning gives the direction to the company for long term goals that aids in
higher productivity and profitability (Kabeyi, 2019). ASOS carefully review their threats and
opportunity in the market and plan the strategies accordingly. Proper planning and application
will increase the company's market share globally and achieve the desired long term objectives
of the company (strategic planning. 2022). Pandemic has put an impact on the company as the
world was going through crises. Recognizing the area of improvement will help in overall
development of the company. Using PDCA method ASOS is recommended to Plan: The company has analysed the change in the need and demand of customers post
pandemic. By conducting proper research, the company can provide high product choices
in comparatively lower prices which will aid in more customers. ASOS should focus on
social media platform for marketing and promotion. The company can hire more skilled
designers, talented research team to analysis market trends and launch a new product
range which is cost effective to fight with the competition in the market . Its good to
create a success criteria for better understanding of how well the desired plan has been
executed. Do: After identifying the reasons to work upon, ASOS should implement the plan on the
small scale to see the profitability of the strategy. The company can do a market survey

of the potential customers to understand their preferences. Quality checking of new range
of clothing which is cost effective as well. New employees can be hired to look into the
social media platform. Check: This is the most important step where you check the execution of the plan. A
proper eye need to be kept on this stage as here the company can identify the problem in
the plan executed. Proper coordination and communication between the leaders and
employees of the company will play a vital role in the success of the strategy. ASOS
should properly analyse and see to the loop hole of the planning and rectify it.
 Act: the company in this stage can finally implement the plan on large scale keeping in
consideration all the recommendation gathered on the basic of feedbacks. Success of the
plan will be measured through the high productivity of ASOS which may directly leads to
increase in profit margin of the company. A growth in company's sale will indicate higher
level of customer satisfaction and will attract potential customers to the company (Song
and Fischer, 2020.).
CONCLUSION
On the basis of above information, it has been concluded that ASOS has experienced a
spike in the growth of sale apart from the covid 19 consequences. Due to pandemic, a change has
been observed in the market trend and the needs and demand of the customer. ASOS is
recommended to work on different product range with low cost, which intend to make a strong
position in the competitive market. Conducting market survey, promoting the products on social
media platform with discount coupons, hiring skilled and talented designers and a regular
analysis of the strategy implemented will aid in the holistic development of the company.

REFERENCES
Books and journals
Au, A. and Tucker, J., 2018. Blue ocean strategy for microenterprises. International Journal of
Information, Business and Management. 10(2). pp.92-98.
Coghlan, D., 2021. Edgar Schein on change: Insights into the creation of a model. The Journal of
Applied Behavioral Science. 57(1). pp.11-19.
Fitrianingrum, A., 2020. The Determining External Factor of Export Performance In
Manufacture Industry. DIMENSI. 9(2). pp.264-279.
Hadavi Nejad, M., Naghi PourFar, V. and Danaei Fard, H., 2020. Assumptions And Values Of
Islamic Organizational Culture. Commercial Strategies. 9(47). pp.93-120.
Hussain, S. T. and et.al., 2018. Kurt Lewin's change model: A critical review of the role of
leadership and employee involvement in organizational change. Journal of Innovation &
Knowledge. 3(3). pp.123-127.
Kabeyi, M., 2019. Organizational strategic planning, implementation and evaluation with
analysis of challenges and benefits. International Journal of Applied Research and
Studies. 5(6). pp.27-32.
Kamrani, F. and et.al., 2021. Flexibility‐based operational management of a microgrid
considering interaction with gas grid. IET Generation, Transmission & Distribution.
15(19). pp.2673-2683.
Kwilinski, A. and et.al., 2019. Formation of the entrepreneurship model of e-business in the
context of the introduction of information and communication technologies. Journal of
Entrepreneurship Education. 22. pp.1-7.
Mateos-Ronco, A. and Hernández Mezquida, J. M., 2018. Developing a performance
management model for the implementation of TQM practices in public education
centres. Total Quality Management & Business Excellence. 29(5-6). pp.546-579.
Miethlich, B. and Oldenburg, A. G., 2019. The Employment of Persons with Disabilities as a
Strategic Asset: A Resource-Based-View using the Value-Rarity-Imitability-
Organization (VRIO) Framework. Journal of Eastern Europe Research in Business and
Economics. 1. pp.1-13.
Song, M. H. and Fischer, M., 2020. Daily plan-do-check-act (PDCA) cycles with level of
development (LOD) 400 objects for foremen. Advanced Engineering Informatics. 44.
p.101091.
Online references
strategic planning. 2022. [Online]. Available through:
<https://www.techtarget.com/searchcio/definition/strategic-planning#:~:text=Strategic
%20planning%20is%20a%20process,can%20reach%20its%20stated%20vision.>
Lewin's 3-Stage Model of Change: Unfreezing, Changing & Refreezing. 2022. [Online].
Available through: <https://study.com/academy/lesson/lewins-3-stage-model-of-change-
unfreezing-changing-refreezing.html#:~:text=Let's%20review.-,Kurt%20Lewin
%20developed%20a%20change%20model%20involving%20three%20steps%3A
%20unfreezing,new%20behavior%20as%20the%20norm.>
1

Using a Power/Influence Grid (Power/Influence Matrix) in Stakeholder Priopitization. 2021.
[Online]. Available through:
<https://www.brighthubpm.com/resource-management/81140-what-is-the-power-
influence-grid-or-matrix/>
APPENDIX
2