Business Strategies for Growth

This document discusses the different strategies implemented by Carphone warehouse and Dixons for their success and growth. It includes a situational analysis, effects of the merger, and possible growth strategies.

Running head: BUSINESS STRATEGIES FOR GROWTH
BUSINESS STRATEGIES FOR GROWTH
Name of the student
Name of the university
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1BUSINESS STRATEGIES FOR GROWTH
Table of Contents
1. Introduction..................................................................................................................................2
1.1 Background of Dixons Carphone..........................................................................................2
2. Situational analysis of the organization.......................................................................................3
2.1 Internal environmental analysis.............................................................................................3
2.2 External environmental analysis............................................................................................5
2.3 Porter’s five force................................................................................................................10
3. Effects of the merger undertaken by Carphone warehouse and Dixons....................................13
4. Possible growth strategies of the organization (Ansoff matrix)................................................14
5. Conclusion.................................................................................................................................16
References......................................................................................................................................18

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1. Introduction
The assessment of the market environments and the capabilities of the organization assist
the same in developing strategies for supporting sustenance. Paul, Sankaranarayanan and
Mekoth (2016) opined that the different strategies that are created by the organizations assists
the same in developing the resources and capabilities of the same while operating in diverse
international markets. The marketing and expansion related strategies of an organization are
dependent on the assessment of the demand that is encountered by the same. The strategies assist
an organization in developing the competitive growth of the same while operating in a market
facing divergence. On the other hand, the development of the existing processes assist an
organization assists the same in adhering to the specific demands of the customers. Therefore,
the purpose of undertaking the discussion is to assess the diverse range of strategies that are
implemented by Carphone warehouse and Dixons, which has contributed to their success and
growth related factors.
1.1 Background of Dixons Carphone
The concerned organization Dixons Retail plc was a consumer electronics retailer in
Europe. The business offered a variety of electronic goods propositions while adhering to the
diverse range of demands of the customers. The diversity in the line of product offerings helped
the business in upholding the efficiency of the operations while operations in diverse markets.
On the other hand, prior to the merger Dixons held 530 outlets in UK and Ireland and 322 stores
in Northern Europe (Dixonscarphone.com. 2019). The revenue stream of the organization prior
to the merger was £8.213 billion (2013) and after the merger was £ 10,525 million (2018)
(Garside and Farrell 2014). Again the net income of the organization diminished to £166

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million (2018) from £168.1 million (2013) (Dixonscarphone.com. 2019). It has affected the
growth of the business after the merger with emergence of diverse range of issues. The
concerned organization undertook a merger, worth £3.8 Billion, with Carphone warehouse in
the year 2014 (Garside and Farrell 2014). The Carphone Warehouse Ltd. is a British mobile
phone retailer, which held over 2,400 stores across Europe prior to the merger. The operating
income of Carphone prior to the merger was £ 57.1 million (2013) whereas the net income was £
4.2 million (2013), which clearly portrayed the lack of profitability of the venture
(Dixonscarphone.com. 2019). The merger helped Carphone in enhancing the rate of operations.
However, there are considerable issues that are faced by Dixons Carphone after the merger.
Therefore, the concerned organization must take steps to develop suitable strategies for
enhancing the rate of profitability and sustenance of the same.
2. Situational analysis of the organization
2.1 Internal environmental analysis
Strengths
 Strong brand recognition
 Wider geographical presence
 Frequent innovations in the line of
products and services (Kasemsap
2016)
Weaknesses
 Declining per unit revenue
 High rate of staff turnover in the
organization
 Maximization of the cost of labour
 High cost of replacing skilled
employees
Opportunities Threats

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 Minimization of cost relating to new
product launches and promotions
 Local collaborations
 Maximization of innovativeness
through continuous learning
 Expansion in the developing nations of
Asia
 US-China trade war, Brexit and
economic volatility in the markets
(Becherer and Helms 2016)
 Existence of huge number of
competitors
 Shortage of skilled employees
 The diminishing rate of Operating
income of the business has affected the
capabilities of the same in making
investments related to the R&D
operations
The assessment of the internal environment of the concerned organization has helped in
developing an insight on the capabilities and competencies that are encountered by the same.
The assessment of the strengths and weaknesses has helped in delineating the internal
capabilities and competencies that might be faced by the concerned organization post the merger.
The strong brand name of the concerned organization and the enhanced rate of innovations in the
line of propositions have helped the same in maintaining the efficiency of the operations in
adherence to the changing preferences of the customers (Castaldo et al. 2016). On the other
hand, the wider availability of the propositions in wider geographical regions has helped the
organization in extending the operations in different markets.
However, the declining per- unit revenue of the organization has affected the
uninterrupted flow of operations while adhering to the changing preferences of the customers.

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The diminishing rate of revenue streams has affected the capabilities of the organization in
strengthening the R&D operations of the same (Castaldo et al. 2016). On the other hands, the
growing cost of labor in the different markets has affected the capabilities of enhancing the
operations through recruitment of skilled employees. Again, the higher cost of replacing the
skilled employees due to the maximized rate of staff turnovers has affected the capabilities of the
organization in continuing with the efficiency in the propositions.
The opportunities and threats that are assessed as a part of the SWOT helped in
identifying the diverse range of strategies that might be undertaken by the concerned
organization in order to facilitate the smooth functioning of the systems. In this relation, the
concerned organization might undertake steps to initiate local collaborations with different
supportive organizations. The collaborations will be assisting the concerned organization in
maintaining the effectiveness of the expansion related strategies of the same. On the other hand,
the concerned organization might also take steps to expand in the Asian developing countries
which will assist the business in minimizing the operations cost due to higher supply of skilled
workforce and lower wage rates (Ramanathan, Subramanian and Parrott 2017).
However, the concerned organization faced different issues relating to the US- China
Trade conflict and the imposition of Brexit, which has affected the capabilities of the same in
undertaking expansion in the different economies (Grimmer et al. 2017). The lack of skilled
employees and staff turnovers has also affected the capabilities of the concerned organization in
maintaining the efficient of the operations. On the other hand, the lack of sufficient operating
income has affected the capabilities of the organization in enhancing the R&D operations of the
same, which challenged the competitive edge of the business.

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2.2 External environmental analysis
Political
 Political stability in most of the
countries where the concerned
organization operates has helped the
same in maintaining the efficiency of
the operations in accordance to the
needs of sustenance. The political
stability of the nations has helped the
concerned organization in developing
efficient links with the dealers and
suppliers.
 Free trade policies assisted the venture
in continuing with the expansion
related objectives of the same in diverse
economies. The free trade policies and
minimization of the taxation rates
assisted the business in developing the
activities while adhering to the growth
related needs (Bhatt and Bhanawat
2016).
 Lack of government intervention in the
operations of the venture has helped the
concerned business in improving the

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processes while adhering to the
requirements of the same related to
sustenance.
Economic
 The volatility of the European markets
has affected the capabilities of the
concerned organization in developing
policies in support of its sustenance.
 It has been forecasted that the GDP of
the EU will reach to $23 trillion by the
end of 2019 (Jones, Borgman and
Ulusoy 2015). It will be assisting the
concerned organization in maximizing
the scope of target customers for the
offerings of the business. The enhanced
affordability of the customers will be
assisting the concerned organization in
locating potential buyers for the
offerings.
 The concerned organization might
make use of the leisure related interests
of the consumers in order to position
their offerings. On the other hand,
Cheung et al. (2016) stated that the

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Social
leisure based requirement of the young
generation is growing by 6% per year
with the infusion of latest technologies.
It will be assisting the concerned
organization in attracting the attention
of the potential buyers towards the
offerings that are made by the same
 Yu, Tullio-Pow and Akhtar (2015)
stated that UK’s population is mostly
comprised on the youthful generation
and millennials. The concerned
organization aimed at developing their
products for the millennials. Therefore,
the growing population of the
millennials will be helping the
concerned organization in generating
sufficient revenue from sales related
activities.
 The development of the infrastructural
facilities in UK has helped the
concerned organization in developing
the operations of the same in
accordance to the demand that is faced

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Technological
by the same.
 It has been reported that 90% of the
adults in UK has access to internet
services and are active internet users
(Fecht, Hackethal and Karabulut
2018). The growing rate of internet
penetration in the markets has helped
the concerned organization in making
the target audience aware of the
propositions that are made by the
organization. On the other hand, it
has been noted that more than 79% of
the UK population are active on
different social media platforms
(Sachdeva and Goel 2015). It will be
assisting the concerned organization in
minimizing the cost of promotions
through the utilization of the social
media platforms while gaining
maximum level of exposure.
 The Paris Climate Agreement might
affect the capabilities of the concerned
organizations through stringent policies

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Environmental
relating to environmental conservation
(So et al. 2016).
 Stringent regulations that are developed
by different environment protection
agencies might affect the capabilities of
the concerned organization in
upholding the efficiency of the
operations.
Legal
 Laws relating to data protection (Data
Protection Act 2018) might restrict the
capabilities of the organization in
utilizing the information of the
consumers for developing the existing
processes of the business (Jones,
Borgman and Ulusoy 2015).
 The HSWA (Health and Safety Act
1974) provided the organization with a
list of activities that might be
undertaken by the same with the
purpose of ensuring the safety and
security of the employees working for
the concerned organization (Alic, Agic
and Cinjarevic 2017).

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2.3 Porter’s five force
Threats of new entrants
Weak force
Strong force
 The existing regulations in the markets
support the new entrants. On the other
hand, the threat of switching taste and
preferences of the customers might
affect the capabilities of the concerned
organization in retaining the loyal
group of customers (Kasemsap 2016).
 The enhanced amount of initial
investments that might be required by
the new entrants for creating a strong
competitive force against the concerned

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organization. It has helped the
concerned organization in minimizing
the threats of new entrants.
Threat of Substitute Products or services
Strong Force
Weak Force
 A cheap substitute product of the
concerned organization is available in
the markets, which offered enhanced
quality product in lower costs. It has
affected the capabilities of the
concerned organization in retaining the
loyalty of the tar3gt group of customers
(Becherer and Helms 2016).
 The higher switching costs from the
concerned product proposition to the
substitute products will be assisting the
concerned organization in retaining the
loyalty of the target customers of the
business.
Rivalry among existing firms
Weak Force
 Lower amount of competitors in the
market has helped the concerned
organization in developing the
operations of the same in accordance to
the demand of the customers (Castaldo
et al. 2016). On the other hand, the

13BUSINESS STRATEGIES FOR GROWTH
concerned organization developed a
diverse range of propositions, which
has assisted the same in upholding the
efficiency of the operations while
adhering to the needs of the business.
Bargaining Power of Suppliers
Weak force
 The bargaining power of the suppliers
are low as they are not concentrated in
region and there is a greater
availability of suppliers in the markets
which has helped in reducing the
bargaining power of the suppliers. On
the other hand, there is no threat of
forward integration by the suppliers,
which has helped in maintaining the
efficiency of the concerned
organization.
Bargaining Power of Buyers
Strong force
Strong force
 Price sensitivity of the customers has
affected the capabilities of the
concerned organization in quoting
prices in accordance to the propositions
(Kasemsap 2016).
 Lack of sufficient number of companies
in the market has assisted in enhancing

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the pricing considerations that are made
by the concerned organization. On the
other hand, the higher switching costs
has also helped the concerned
organization in retaini8ng the loyal
customers.
3. Effects of the merger undertaken by Carphone warehouse and Dixons
The merger that was undertaken by the Carphone warehouse and Dixons has helped the
same in increasing the net income of the same and the overall revenue streams. It has been noted
that the pre-tax profits maximized from 53pc to £133m (Garside and Farrell 2014). The
developments in the growth strategies assisted the business in upholding the effectiveness of the
operations. The merger activity has helped the organizations in retaining the sales volume in
accordance to the needs of the same. He et al. (2015) stated that the merger helped Carphone
warehouse and Dixons in developing the sales related activities of the same through maximizing
the product diversification. On the other hand, Ramanathan, Subramanian and Parrott (2017)
critiqued on the merger stating that the activity was aimed at developing the revenue streams of
the organizations, which would support the same in strengthening the R&D operations of the
same.
The diverse range of changes that were undertaken by the organizations assisted the same
in adhering to the increasing demand of the customers. On the other hand, the different
modifications in the products were based on the diversification of the offerings. He et al. (2017)

15BUSINESS STRATEGIES FOR GROWTH
stated that the diversity of the offerings assisted the organization in strengthening the competitive
edge of the same while operating in diverse markets. On the other hand, the merger also helped
the organization in strengthening the operations and the offerings through the introduction of
internet of things. The merger thereby helped the organizations in developing the capabilities of
the same while operating in accordance to the requirements of the customers. Bhatt and
Bhanawat (2016) stated that the diverse range of changes that are undertaken by the
organizations has helped the same in maintaining the efficiency of the operations in adherence to
the needs of the business. The developments that are being planned by the businesses has helped
the same in enhancing the rate of sales and net income of the same. However, there are different
issues that are being faced by the organization post the merger, which affected the capabilities of
the same in maintaining the sustenance.

16BUSINESS STRATEGIES FOR GROWTH
4. Possible growth strategies of the organization (Ansoff matrix)
Figure 1: Ansoff matrix
(Source: Grimmer et al. 2017)
The utilization of the Ansoff matrix will be assisting the concerned organization in
developing strategies that will facilitate the competitive edge of the business. The strategies are
being enumerated in this section of the analysis. The strategies will be assisting the concerned
organization in developing suitable market base in the existing and the new markets. On the

17BUSINESS STRATEGIES FOR GROWTH
other hand, the strategies will also assist the organization in enhancing the competitive advantage
of the same through suitable promotions and product development while adhering to the demand
of the customers.
 Market penetration with the existing products- The concerned organization might take
steps to provide the customers with sales promotions and offers, which will assist the
same in enhancing the rate of sales volume in the existing markets. The promotions and
offers will assist the concerned organization in developing the market standards of the
same while operating in the existing markets. Paul, Sankaranarayanan and Mekoth
(2016) stated that the diverse range of sales promotion techniques like discounts and
limited period offers assist an organization in maximizing the rate of sales within a
specified time period. Therefore, the concerned organization might take steps to develop
their existing markets through issuing offers and discounts on the purchase of the
offerings, which will assist in enhancing the rate of sales.
 Product development- The development of the products in accordance to the demand
and expectation of the customers will be assisting the concerned organization in retaining
the loyalty of the target customers. In this relation, the concerned organization might take
steps to facilitate a market analysis, which will assist the same in developing the line of
products in accordance to the demand of the customers.
 Market development while making expansions- The concerned organization might
take steps to develop suitable promotional strategies for attracting the attention of the
customers in the new markets. The extensive promotional campaigns through social
media platforms will be assisting the concerned organization in developing the trust and
confidence of the target customers in the new markets. Donnelly et al. (2015) stated that

18BUSINESS STRATEGIES FOR GROWTH
the extensive promotional techniques of the organization assist the same in developing
the trust and confidence of the new range of customers. On the other hand, Ramos,
Santos and Rebelo (2015) noted that the development of the detailed promotional
strategies assists businesses in making the customers aware of the uniqueness of the
propositions. Therefore, the social media promotional campaigns will support the
organization in developing their position in the new markets.
 Product diversification in the new markets- The diversification of the products will
assist the concerned organization in gaining a competitive edge over the existing players
in the new markets. In this relation, the concerned organization might assess the specific
taste and preferences of the customers for developing the products with the objective of
developing the markets and enhance the sales volume of the same. The diverse range of
changes in the product development processes of the organization will be dependent on
the assessment of the needs of the customers while operating in diverse markets.
5. Conclusion
Therefore, from the above assessment it might be stated that the diverse range of
modifications that might be undertaken by Dixons Carphone after the merger will assist the
same in developing the situation of the venture. On the other hand, the assessment also included
the evaluation of the internal and external environments of the same. The assessment of the
market environments has helped in delineating the diverse range of growth strategies that might
be considered by the same for gaining a competitive edge in the markets.

19BUSINESS STRATEGIES FOR GROWTH
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