Business Strategy Analysis

This report provides a comprehensive analysis of the business strategy of Kontoor brands, including problem statement, external analysis, internal analysis, diagnostics, alternatives, and recommendations.

Business Strategy Analysis

Table of Contents
Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Problem statement....................................................................................................................1
External analysis.......................................................................................................................2
Internal analysis........................................................................................................................4
Diagnostics.................................................................................................................................5
Alternatives and recommendations.........................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategy analysis is referred to as a process of carrying out research on a company along
with its operating surrounding to formulate a strategy and policies. Important for company to
identify as well as evaluate various data by important company’s strategy (Adel, Mahrous and
Hammad, 2020). Strategic analysis different aspects like determining as well as evaluating
information which is important to company’s strategy, defining external as well as internal
surroundings which are to be analysed as well as implementing different analytical tools like
SWOT analysis as well as value chain analysis in order to carry business practices effectively.
This report is based on business strategy analysis of a case study Kontoor brands which is
company behind Lee and Wrangler brands. This report includes problem statement of case,
internal analysis, internal analysis, diagnostics, alternative as well as recommendations along
with its conclusion.
MAIN BODY
Problem statement
By carrying out this analysis it has been evaluated from case that Kontoor brands has
generally race its earnings guidance in coming months where owners of Lee and Wrangler jeans
plans to provide about their details of growth strategy. There are certain problems which it is
been defined in case study (Beaudry, Galizia and Portier, 2020). By carrying out this analysis
issues that are identified from this case are as follows:
 Due to rise of covid-19 pandemic sales of company is affected due to their store closures.
 Company is having a debt of $586 million from financial obligations.
 Company has raised issue of that was generated by a mix of international wholesale as
well as sales of third party branded merchandise which was discontinued in 2020.
As from this case there are certain questions regarding to sales revenue which are being
identified from case. It has been determined that there are various issues which were faced by
Kontoor brands in carrying out their business with other companies that leads in having a loss
during rights of pandemic situation (Peng, 2021). As company lacks in providing investment in
their coming months and as a result various losses have been incurred due to pandemic related
closure of their stores and optimistic face has risen due to increased rate of vaccination as well as
customers are tending to spend more money. There should be an effective use of strategy in
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terms of having growth of computer in order to save their low cost jeans of synthetic outdoor
clothing as well as higher and denim style so that younger customers could be attracted to
purchase their product.
Along with that company should take a benefit of shifting their business to casual office
attire which could be begin before pandemic situation from their executive clothing industries
like Levi Strauss and co Kontoor that will offer jeans with flexible waistband as well as jogger
pants.
As for prioritising for company in different months coming is is required to be get invested in
IT digital platform to drive and increase online sales. As study of business strategy analysis is
carried to identify and make various investment in business of strategic decisions of company in
order to have timely as well as adequate information. It generally saves companies valuable time
and money along with an unbiased source of detailed data (Sheibani, 2020). It generally contains
a study of different external as well as internal factors that effect on tour brands in terms of
having SWOT analysis and its strategies. Along with that this analysis is carried in order to
perform various activities which are easy to understand a company’s financial Outlook as well as
it offers different key financial information along with revenue analysis of kontoor brands for
their coming years.
External analysis
External analysis of case in terms of analysing various strategies for formulating PESTLE
analysis could be carried. In terms of case study of Kontoor brands PESTEL analysis of
company are as follows:
Political factors  There are various changes which are taken in trade
policies of US as well as other countries.
 Various countries like Vietnam as well as
Bangladesh are generally playing a wider role as
their apparel product suppliers.
Economic factors  As company is facing fluctuations in carrying out
various foreign exchange rates in terms of
increasing their sales.
 There is an impact of economic volatilities on
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having benefit of pension cost of their products.
 Company is facing sales rising in ear after
pandemic related stores closures with their
optimistic sales rising in terms of vaccination rates
which is increased as well as customers are
spending more money on that (Exposito and
Velasco, 2018).
Social factors  There is a promoting of inclusion along with
diversity in different workplace so that operations
could be carried easier manner.
 There is a rising of concerns that relates in having
sustainability as well as transparency on different
parts of customers.
 Company has also shift their business section
towards casual attires in order to gain benefits.
Technological factors  In case company is facing 3D technology in terms
of their fragrance as well as Apparel industry
sectors.
 Company is using various technological
development in terms of artificial intelligence for
having enhancement of shopping experience
towards customers in terms of buying jeans.
 Company could plan to have why did investment in
carrying out resource planning technology e and
providing technological systems as well as
infrastructures to be about out $90 million through
2021.
 Kontoor brands could increase their sales by
creating their own websites and having online
presence.
Legal factors  There is an intellectual property Rights which are
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used by company for having business success in
terms of their sales.
 There is constant changes in tax laws that are across
various jurisdictions.
Environmental
factors
 There are various concerns which are taken about
climatic change in terms of their increased sales
objective in relation with change customer
preferences (Cudny, Comunian and Wolaniuk,
2020).
 There are various initiatives which are taken for
conservation of water by company.
As by carrying out PESTEL analysis on Kontoor brands it has been analysed that company
is following growth strategy in terms of rising there sales in numbers by increasing their sales in
different factors which is their shift to casual office attire along with they are planning to have
investment on ecommerce platform through to having technological systems as well as
infrastructures that could lead in in providing them better opportunities for carrying out there
sales in Lee and Wrangler stores more effectively.
Internal analysis
As for carrying up internal analysis it helps in identifying company’s internal factors in
terms of their strategies and working operations of company. Per having internal analysis in
strategic and hands could be taken for analysing operations of company.
Strategic alliance is said to be a significant long-term partnership as well as collaborative
agreement that is entered into by two or more than two companies to start a set of agreed upon
critical objectives while rest legally independent companies (Cao and Ma, 2019). As these
collaborations of strategic alliance could come in many shapes as well as size along with
consisting of contractual as well as equity forms. As in terms of Kontoor brands which is a
global lifestyle company with a portfolio which is led by two of world’s most iconic brands Lee
and Wrangler. As company e has announced a global icon in jeans where as well as casual attire
that needs to expand their company in reach of China in order to generate their sales. As one of
company core strategic priority consists of expanding their new market as well as geographies.
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By launching their iconic fashion brand Wrangler in Chinese market is considered to be one of
fastest growing customer’s market in global world which is considered as their step towards
increasing their sales. As it generally manufactures as well as distributes superior higher quality
products which look effective as well as fit rights by providing customers around world freedom
as well as confidence to express themselves.
As for having strong momentum companies finance chief as well as former VF executive
are referring to Lee and Wrangler. And their revenues for both brand has increased by 30% to
$649 million for a quarter ended. Along with that company is primarily a US wholesaler with
68% of their net revenue in 2020 that are coming from retailers like Amazon, Walmart as well as
target corporation (Chan, Shen and Cai, 2018). Along with that there is direct to customer sales
which are made bike company to increase their revenues from Lee and Wrangler' s full price as
well as their outed stores also earning with their brand websites.
Diagnostics
As from carrying out above analysis on different strategies which is used in case it has
been evaluated from case that there are various strategies that are formulated by Kontoor brand
and according to that SWOT analysis of company could be carried which is as follows:
Strengths  Company is selling out various diverse
products and service that are being sold across
global world through different channels.
 Kontoor brands is having strong centralised
globalised supply chain.
 There is industry leadership in implementation
of natural as well as sustainable performance
material.
 Company is having innovation in entering into
new segment of casual attires.
 There is innovation driving advancements that
are carried by company in increasing their core
capabilities as well as competencies.
 There is strong as well as evolving workplace
culture which alliance their employees to have
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an effective business strategy.
 There is a strong compliance as well as ethics
programs which could be carried by company.
 Kontoor brands is increasing their sales by
selling out their products through online
modes.
Weaknesses  There is a dependency on a small number of
higher revenue of customers (Liu and Xia,
2019).
 Company is dealing with physical stores.
 There is lack of identification of customer
trends and preferences.
Opportunities  There is an opportunity of strategic moves as
well as transformation of a successful future in
terms of clothing sector.
 Company should carry their repositioning
strategies for having effective work segment
portfolio in their operations.
 There is a market opportunity of increasing
focus on Asian market along with Chinese
market also in carrying out their business
practices for increasing their sales.
 Company could grab opportunity of carrying
out their business practices through online
modes by various channels through website so
that their sales could be increased by
maximizing their profits.
 Kontoor brands should provide technological
platforms by having infrastructure systems so
that operations could be e performed in an
effective manner.
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Threats  There is a decline in customer spending during
economic downturns.
 Kontoor brands is facing high competition
footwear sector industries.
 Company is facing an increase pressure on
various margins (Davids, 2018).
 There is a high impact that company faces due
to weather conditions in terms of their clothing
segment.
 Due to rise in covid-19 pandemic sales are
somehow affected.
By carrying out SWOT analysis it has been evaluated that case of kontoor brand is using
growth strategy for carrying their business practices effectively. Company has expanded its
segments into to low cost jeans in areas of synthetic outdoor clothing as well as higher and
denim styles for attracting younger customers. along with that they are using mode of online
presence selling through websites so that their sales could be increased and they will be able to
make more money.
Alternatives and recommendations
From above analysis it has been evaluated there are certain issues which are identified in case
that requires to be resolved. There is certain solution this could be provided in order to solve
issues which are faced by company that are being diagnosed. In terms of Kontoor brands certain
alternative as well as recommendation which could be provided to company in order to have
feasible solution to a problem are as follows:
 It is important for company to build their online presence more effectively so that
customers will be able to purchase their product as well as services through their websites
rather than going on to their stores (Barnaby, Devins and Beech, 2020).
 Company should carry their business operations in in Asian market as well as in Chinese
market so that their sales revenue could be increased more in number.
 Company should use diverse products portfolio in order to have more brand value
towards customer and for generation of revenue in terms of profitability.
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 Kontoor brands should carry various strategic moves as well as transformation in terms
of implementing their growth strategy for having a successful future.
 Company should use repositioning strategies in carrying out their work segment portfolio
in carrying out their clothing segments.
 Company should use various innovations in carrying out artificial intelligence in in
building a wide platform system as well as infrastructure for carrying out their work
operations.
 Kontoor brand should diversify their product as well as services that are currently e
having higher sales with and versions into their classic Lee and Wrangler jeans by
particularly retailers of urban outfitters as well as Fred Segal that could cater younger
customers more to resolve their issue (Zhang, Guo and Wang, 2020).
 Kontoor brand is recommended to carry selling their products of women's line of outdoor
clothing under its brand name of Wrangler to customers of US.
 Company should take a well-positioned advantage in their denim sales in order to rise
their investment in terms of clothing and footwear.
 Company should make itself listed through spinoff from VF corporations that are behind
Vans supreme North face as well as other clothing companies.
CONCLUSION
From above report it has been concluded that it is essential for companies to have strategic
analysis in order to carry business research on company as well as external environment for
carrying out strategy. This report briefly explains about a case study of Kontoor brands in its
strategic analysis that consist of identification of problem issues that are occurred in case. There
is an explanation of internal analysis as when as external analysis in which different analysis are
carried out to determine various opportunities in market for identifying competition. Along with
that a diagnosis has been made through preparing SWOT analysis in order to identify and
evaluate different formulation of data. There is an explanation of various alternatives that could
be used in case study for having feasible solutions in order to solve issues along with various
recommendations that could be used by company in order to have effectiveness in their strategy.
This report identifies various strategic formulation so that company would be able to achieve
their sales and generate revenues through carrying out their operations.
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REFERENCES
Books and Journals
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supply chain: coordination and win-win situation analysis. International Journal of
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business capabilities to a cloud environment (Doctoral dissertation, University of Cape
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Peng, M.W., 2021. Global strategy. Cengage learning.
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Critical Path Analysis and Monte Carlo Simulation: Survey and Research
Directions. International Journal of Business Strategy and Automation (IJBSA), 1(1),
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Zhang, Y., Guo, C. and Wang, L., 2020. Supply Chain Strategy Analysis of Low Carbon Subsidy
Policies Based on Carbon Trading. Sustainability .12 (9). p.3532.
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