Business Strategies for Growth

Running head: BUSINESS STRATEGIES FOR GROWTH
BUSINESS STRATEGIES FOR GROWTH
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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

2BUSINESS STRATEGIES FOR GROWTH
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

3BUSINESS STRATEGIES FOR GROWTH
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

4BUSINESS STRATEGIES FOR GROWTH
 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.

5BUSINESS STRATEGIES FOR GROWTH
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.