Business Strategy for KIDLY: Macro Environment, Market Analysis, and Value Creation

This article discusses the macro environment and market analysis for KIDLY, a start-up company in the UK, and how it creates, captures, and delivers value to its customers. It covers the PESTLE model, Porter's five forces, and strategic group analysis. The article also explores the use of design analysis and value proposition canvas to improve the company's efficiency and consumer value.

BBE602 BUSINESS
STRATEGY ASSESSMENT
ONE

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
1- Discussing macro environment and how it affects the chosen start-up company...................3
2- Market and industry analysis...................................................................................................5
3- Discussing the ways in which company create, capture and deliver value.............................8
4. A value based design analysis...............................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Business strategy is defined as strategic element, that used for purpose of achieving
strategic aims and objectives of companies, whether it is small or large, establish or start-up
(Kumar and et.al., 2021). This element plays significant role in the context of organizational
growth and unpredictable success in the market, where competition level is high. Business
strategy encompasses some essential components as well such as set of plans, actions, activities
and decisions that clearly outline how a venture compete in a specific market. This form of tactic
drive the attention of firms toward taking right decision and then implement practices
accordingly. The current assignment will be based on KIDLY, which falls under the category of
start9-up organizations in the UK. Organization was established by James Hart, in the United
Kingdom successfully and appropriately. The study will explain macro environmental analysis
and how it affects the company. It will also specify discussion of industry in which KIDLY
operates in and how this sector impact upon it. Furthermore, the report will justify critical
discussion based on how organization is creating, capturing and delivering value. Lastly, it will
define the further strategic options including organization design improvement opportunities for
chosen company, based on preceding analysis.
TASK
1- Discussing macro environment and how it affects the chosen start-up company.
Macro environmental is considered as set of factors that exist in the business world and
put impact on companies, either public or private, existing or new. In the recent time, it is quite
essential for a company to consider macro environment of a market, where it exists or plan to
enter. In case of KIDLY, it is also important for administration to take each factor into their
consideration that covers under macro environment (UK’s top 100 disruptive startups revealed,
2022). As these factors may put direct impact on this start-up company, whether it is positive or
negative in term in form of threat or opportunity. In order to conduct macro environmental
analysis, management may use PESTLE model that define key external factors and these are;
Political factor-
Any form of vary related to political factors such as political stability, tax rate, trade
policy, etc. may put direct impact on an organization. In case of KIDLY, this factor may put
positive impact because in the UK political stability may drive the attention of companies toward
business expansion and conducting other profitable practices (de Sousa and Castañeda-Ayarza,

2022). This factor may provide organization chance to enter into new and profitable market,
where success and growth factors accessible in bulk. Affordable tax rate, suitable trade policy
and other factors effectiveness may affect positively upon company in term of grabbing further
and current business growth opportunities, in the existing and new market.
Economic factor-
Economic growth, employment and other factors that falls under the category of this
force may affect directly to KIDLY. It may put positive impact on company in form of
increasing profitability, as individual person in the UK is able to purchase quality products for
their children's, with consideration of quality and quantity (What is a PESTEL Analysis, 2022). It
may enable management to take pleasure of generating revenue, which is not of the biggest
success factor for any start-up company in the retail clothing sector, UK. Employment and
economic growth concepts, allow organization to increase productivity level, in form of fulfilling
customers needs; aged 0-58 years old children's and their patients.
Social factor-
Another factor that put impact on KIDLY is social factor that entails varied terms such as
market trends, customer behaviour, interest, etc. In the recent time, customers prefer to use
online platform for varied reasons, which in turn provide companies the best growth opportunity.
In case of chosen firm, management may grab the opportunity of retaining and acquiring new
consumers in form of using live chat session with parents, who want to purchase their baby
products that it may have more than 4,000. By following this trend, organization may grab
opportunity to sustain for longer in the market and become a competitive brand, that able to sell
each product for children's.
Technological factor-
Technology advancement may emerge as business progress opportunity, which drive the
attention of KIDLY and its administration toward using online platform for purpose of products
promotions that they have. Furthermore, this factor may provide firm another chance to grow in
form of making live chat with target market, that allow sharing information about goods and
understand the expectations of child parents related to baby care goods, clothes, etc. The
advancement of technology may support organization to reach desire outcomes in form of
achieving target aims and objectives, which is quite essential for venture to do so, with

utilization of skilled workforce. It may provide firm chance to gain competitive benefits in form
of generating revenue.
Legal factor-
This factor may put negative impact on KIDLY in term of putting a lot of pressure for
making possible changes related to production and supply of products for babies, that may lead
to increase complications, in the workplace. Any kind of change in the context of governmental
rules and policies related to clothing brands like chosen one, may put adverse impact on its
success. It may create several challenges for company in term of emerging threats that impact
success and growth opportunities, business strategies and plans. It may lead to increase issues
and decrease operational effectiveness, but for short term period, instead of longer time duration.
Environmental factor-
Customers and government needs as well as their consideration toward sustainable
environment may affect positively in term of making organization sustainable. KIDLY is able to
provide and offer sustainable products to customers in term of using recyclable materials for
purpose of packing goods that eliminate the reason behind of air, land and water pollution. Its
sustainable practices enable company to gain unpredictable benefits and obtain desire outcomes.
Environmental sustainability may put positive impact on firm in form of building sustainable
brand image in the market. It impact in form of increasing profits and revenue than last few years
or months.
2- Market and industry analysis
Market analysis is the assessment of market in the specific industry by which the study of
market is analysed in terms of potential customer segments, buying patterns of the customers,
competitors and other various important factors. Whereas industry analysis look on trends,
growth and main competitors. This needs the specific information of the present state of industry
and target markets as well. Industry analysis contain reference materials like pie charts, bar
graphs and spreadsheets in order to represent the data. For market analysis there are some
benefits like it decrease the risk and new emerging trends can be identified. Detailed analysis is
the part of business plan for building the target marketing strategy (Maisyarah, 2018).
Porter's five forces of Kidly
It is the approach to get to know about how the competitive the market is and how profitable it
will for the business. It discusses the five stage such as :

Bargaining power of Buyers -
It is the bargaining ability of buyers, they select to push down prices for the product they
buy, or they prefer to switch to different retailers. For Kidly which belongs to clothing retail
industry, the buying power will be in large force. The power is high due to in such circumstance
individual will have the option to switch among different locations as there are many stores
available for them to go through. In this case the customer demand enhances as for making good
relation with them company fulfil their needs, and so they stick to make purchase with them
rather than switching to different competitors (Bruijl, 2018).
Bargaining power of Supplier -
In Kidly, supply power is not significant role because mostly the suppliers are from the
third world and follows the rules which is set by buying brands. Company has purchasing power
and can be easily switch to from one supplier to another. In such case financial clout is used to
influence pricing. In clothing industry the supplier have less control so the bargaining power in
inconsiderable. While in other cases, fewer supplier leads to more dependence of a company on
the single supplier. In such case supplier has more power and drive to input cost and move for
the advantages in trade. But in the case of Kidly the suppliers are more and the switching cost is
low between competitor suppliers, and they can set the input cost lower and increase the profits.
Threat of new entrants -
In such process the company power is affected through the entry of new entrants in the
marketplace. The less time and money it values for competitor for entering company market and
be the effective competitor (Irfan and et.al., 2019). There are many competitors in the clothing
industry as new trends are emerged and it is already followed buy people which can be threat.
Company must find unique ways to gin more attention of customers rather than focusing on the
competitors. Some marketing strategy should be considered for facing the challenges in the
industry.
Threat of substitutes -
The competition in clothing sector is huge which is growing immensely, every individual
company has its competitors who can provide similar substitute products at lower price. Such
new trends are also being followed by individual in the industry as there are chance of threat for
the same. With substitutes customer will have options to buy them as it is beneficial and the
company power can be weakened (.Wati, 2018). For Kidly the power can be increased when

there are no similar threat of substitutes available in market and company will have power to
increase the price and fix in favourable terms. Such ideas can be implemented which not cannot
be followed and there will be no chance of substitute.
Competition in industry -
In this process it shows the number of competitors and the power to undercut company.
Competitors with bulk amount of equivalent products will lower down the company power. The
suppliers and buyers search out company competition for getting the better deal and as well as
valuable benefits. When competition is fewer, the company has right to charge high price and set
the terms of their deals in order to get more profit and sales. For Kidly the fashion trend should
be unique from the competitors, so they can charge higher price or provide discount, offer and
other facilities to their customers. The strategy should be different from the other competitors in
the industry.
Strategic group analysis
Strategic group analysis is the tool for market research which compares the attributes of
competitive companies. The purpose of this is to show how business performs against the similar
business in the field. Also, the process of revealing can be done if the business is surpassing
competitors successfully (Collins, 2019). In Kidly strategic group analysis work as focusing on
the product and quality features and looking for the new trends are emerging in industry as well
as competitors. Also, looking further for positive aspect to be grown in the current sector and pay
attention to various strategies of competitors in carrying out the similarities and differences.
These will control their movement from single strategic position to another and the expansion of
company in one group to the position held by other group. The company should maintain their
channels of distribution and look for creating a valuable brand image. Further the pricing is the
key role which should be maintained at lower from different competitors in the industry. For
organizing the daily activities company should prepare the effective strategies in order to gain
maximum benefits. It can be helpful in increasing the quality of the products offered by the
company. It can help in reducing the impact of barriers upon the business. It works like the entry
barrier and act for the group in the industry rather than industry as whole. These strategic groups
are content to provide such delicate explanation to the variations in performance of company
than industry structure alone (Mas-Ruiz, Ruiz-Conde and Calderón-Martínez, 2018).

3- Discussing the ways in which company create, capture and deliver value
For the company to be successful it is very necessary for the reason that when the value
will not be created by the business then consumer will not be good. This is particularly because
of the reason that in case consumer will not be happy then they will not be buying the product
and services. hence, for this it is necessary that company must provide for good value to the
customers so that they are satisfied (da Costa Fernandes and et.al., 2020). for this it is crucial for
KIDLY that they provide good value to the consumers such that they are satisfied and happy
with the services of company. this is necessary for the reason that when proper product and
services will not be provided to the consumer then they will not feel attached with the company.
hence, this will be affecting the sales and profitability of the company to a great extent.
Thus, it is very necessary for KIDLY that they create proper value for the consumer such
that the working is beneficial for the them in order to improve the efficiency. Hence, for creating
better value it is very important for KIDLY that they must effectively use the design analysis.
this is particularly because of the reason that design analysis involves a process of decision
making which helps in developing the model which can be converted within the actual product.
this design analysis will be helping the employees in creating better product and services and this
in turn will attract large number of people towards the company. also, it is very important for
KIDLY that they must focus and work of value proposition. this is being referred to as the value
which the company is promising to deliver it to the consumer through the product or service
which they choose.
Hence, for managing the value and to keep the consumer happy and satisfied KIDLY
undertake the use of value proposition canvas. this is necessarily used by KIDLY in order to
improve the working efficiency of company and consumer value. this value proposition canvas
involves two major building block that is company’s value proposition and customer profile
(Mohd Satar, Dastane and Ma’arif, 2019). these two elements are very important for the reason
that when the working will not be ensured according to the consumer then this will be affecting
the efficiency. the value map involves the three elements which involves gain creators, pain
relievers and product and service. this is very essential for the reason that in case the product and
services will not be good and effective then this will be affecting the value to the consumers.
the value can be created by KIDLY by way of creating product and service which
provide gain to the consumer. also this includes pain reliever which involves description of how

the product of the service will alleviate the pain of consumer. against this the customer profile
involves gains, pains and customer jobs (Abdel-Basst, Mohamed and Elhoseny, 2020). the gains
refer to as the benefit which the consumer is expecting. further the pain involves the negative
experience and emotion which the consumer feels during the process of getting the work done.
this is very necessary because any negative review will be affecting the working efficiency and
their satisfaction level will be decline. further the customer job involves the task which consumer
need to perform in order to solve the problem which company is facing. This is necessary for the
company to follow all these elements so that proper value can be created in order to improve the
working of the company.
along with this KIDLY also undertakes the use of coordination operating model in order
to run the business appropriately. This coordination is a method which involves for high level of
integration but it has less focus on the standardisation of the process. this coordination involves
the different elements like consumer, products, suppliers and others. the major benefit of
integration which is being faced by KIDLY like the integrated consumer services, cross- selling,
transparency and many others. further for the creation of the value proposition the use of VRIO
model is also undertaken as it includes creating competitive advantage as well. The VRIO model
involves the resources which are classified on the basis of the four characteristic that is valuable,
rare, imitable and organised.
Resources Value Rarity Imitability Organization
Financial
resources
✔ ✔ ✔ ✔
Employees ✔ ✔ ✔ ✔
Distribution
network
✔ ✔
Cost structure ✔ ✔ ✔ ✔
Patent ✔ ✔
Research and
development
✔ ✔
IT ✔
Technology ✔ ✔

With the analysis of the above VRIO table it can also be stated that the resources which
provides for the competitive advantage involves financial resources, cost structure and
employees. these three are the resources which provides for the competitive advantage and this
attracts the consumer most. this is very important for the reason that when the finance will be
managed properly then this will be providing better working efficiency to the consumers.
ultimately this will be resulting in increasing the efficiency of the company and its profitability
as well.
With this analysis it is clear that the key strength of the KIDLY is that the financial
planning and resources are very strong for the company. hence, this implies that the working of
the company will be managed and improved in better and effective manner. Also, the set of
employees being recruited well and this is beneficial for the company to improve the working
efficiency and the profitability of the company (Erlangga and Erlangga, 2021). On the other
hand, it was also analysed that the major weakness of the company is that they do not have sound
IT. This affects the working to a great extent because in case the IT will not be strong then this
will be affecting the working of the whole company and product and services will not be good.
4. A value based design analysis
A value based design is a kind of approaches which helps and supports to identify the
solution of the problem and combines the research for the continuous development and
improvement of a business. The company named KIDLY was where the kids accessories,
apparels and toys has been manufactured in cool and stylish manner from where the people can
be able to purchase the items and can fulfil their desires in definite manner. In his fashion world,
the major problem has been founded by the KIDLY founder where the parent were desired to get
the stylish apparels and kids accessories where the KIDLY organisation has been established to
fulfil the needs and desires of the people (Funabiki, Syaifudin and et.al., 2021). However, the
value based design approach is required to use by the new start-up company to improve their
user experience and satisfying the needs and desires of the people. This approach is consisted of
three type research, measurement and experimentation. Let’s understand this concept in detailed
manner in regard to KIDLY organisation.
Research: The first stage refers to research and understand the customer needs and requirements
and what they like the most in the particular business product and service. However, the KIDLY
organisation is manufacturing and dealing with the kids apparels and items where the company

will be able to know on which particular area they have to focus on. Also, the research will
enable to understand the existing issue and problems from where they can settle down in
effective manner and can obtain the definite opportunity.
Measurement: The second factor is measurement where it helps the company to measure the
problem and issue from where what can impact the company departments will get such as
revenue or expenses, time, engagement and many more. Thus, it is important to be done as it will
help the mentioned organisation KIDLY to understand the issue and solution and how these
issues can impact the value of the solution later on such as conversion rate, average revenue, and
such more.
Experimentation: This factor is refers as experimentation where to helps the organisation to test
the value of any improvement and design as the per user experience (Moore, 2018). It is
important to be done as it measure the effectiveness and appropriateness of the design which has
been implemented by the organisation KIDLY and can help and support the company to resolve
and deal with the problems.
Future Strategic Options
The company has required adopting the strategic methods and techniques as an option for
the future needs and requirements where previously plan and understanding of the strategic
option will allow them to grow and develop successfully. The cost leadership is the one of the
strategic way which can help them company to deal with the future issues in effective manner
and can obtain the effective and accurate outcome and result as well. This cost leadership defines
as a company project where they deal with the cheapest manufacture for the particular good to
deal with the competition in the definite manner (Korppi, 2021). The company KIDLY also can
use this future strategic option for the betterment of the company and can be able to increase the
revenue and company as well.
Operating Model
Operating model is a method from where the company will be able to deliver the
appropriate representation to the customers and beneficiaries as well. It is important to
understand and adopt by the company KIDLY as it will deliver the effective and accurate results
to the company and allows them to grow and develop at definite position. However, the KIDLY
company is required to use the coordination operating model as it fit and suit the company in
effective and appropriate manner. In this type of model it separates the departments with their

structure of operations and impact the each other result in definite way and shares the result of
customers, data and products and services (Zameer, Wang, Yasmeen, and Mubarak, 2020). This
is an autonomous department who is able to control the internal processes and can adopt the
autonomous structure in the KIDLY.
Competitive Advantages
The company KIDLT is dealing with the kids items where in the nearby future there will be
many competitor will also takes place and will create issues and problems from where the
company is required to understand and adopt some completive strategies which can help the
company in the future time a s well. The company KIDLY has to manufacture the kid’s apparels
and products according to the fashion trends and which suits the season of the atmosphere as it
will enable the company to create some uniqueness in their business and can perform well.
However, the company has to make the strategies and required to understand the competitive
advantages area and a process from here they can be able to get the benefits in the future as well
(Brunetti, Matt, Bonfanti and et.al., 2020). Using and planning some technique will allow and
enable the organisation to make their unique manufacturing as a strength of theirs and can be
able to grow and definite level. Thus, the company should required to focus on the customer
satisfaction and affordability as it is important to be considered as many companies provide the
unique materials but increase the cost at maximum level and leads them to not grow definitely.
CONCLUSION
The report has concluded the importance of the business functions which is important for the
start-up companies to understand and implement in effective manner. The report has included the
brief discussion on the macro environment and its impact on the mentioned company where it
will allow the company to understand the effectiveness of the analysis. Also, it has mentioned
the brief about the selected company and performed an industry analysis along with a critical
discussion of company y design analysis. At last, the future strategic option and improvement of
the company design has been mentioned for the selected organisation which enables them to
obtain the opportunities sin definite manner.

REFERENCES
Books and journals
Abdel-Basst, M., Mohamed, R. and Elhoseny, M., 2020. A novel framework to evaluate
innovation value proposition for smart product–service systems. Environmental
Technology & Innovation. 20. p.101036.
Bruijl, G. H. T., 2018. The relevance of Porter's five forces in today's innovative and changing
business environment. Available at SSRN 3192207.
Brunetti, F., Matt, D.T., Bonfanti, A., and et.al., 2020. Digital transformation challenges:
strategies emerging from a multi-stakeholder approach. The TQM Journal.
Collins, A. J., 2019. Strategic group formation in the El Farol bar problem. In Complex Adaptive
Systems (pp. 199-211). Springer, Cham.
da Costa Fernandes, S., and et.al., 2020. Towards product-service system oriented to circular
economy: A systematic review of value proposition design approaches. Journal of
Cleaner Production. 257. p.120507.
de Sousa, G. C. and Castañeda-Ayarza, J. A., 2022. PESTEL analysis and the macro-
environmental factors that influence the development of the electric and hybrid vehicles
industry in Brazil. Case Studies on Transport Policy. 10(1). pp.686-699.
Erlangga, H. and Erlangga, H., 2021. Did Brand Perceived Quality, Image Product And Place
Convenience Influence Customer Loyalty Through Unique Value Proposition?. Journal
of Contemporary Issues in Business and Government. 27(1). pp.2854-2867.
Funabiki, N., Syaifudin, Y.W., and et.al., 2021. Value trace problems with assisting references
for Python programming self-study. International Journal of Web Information Systems.
Irfan, M., and et.al., 2019. Competitive assessment of Indian wind power industry: A five forces
model. Journal of Renewable and Sustainable Energy. 11(6). p.063301.
Korppi, T., 2021. Agile operating model for beauty products and services providers'
sustainability strategy.
Kumar, S and et.al., 2021. What do we know about business strategy and environmental
research? Insights from Business Strategy and the Environment. Business Strategy and
the Environment. 30(8). pp.3454-3469.
Maisyarah, R., 2018. Analysis of the Determinants Competition Oligopoly Market
Telecommunication Industry in Indonesia. KnE Social Sciences. pp.760-770.
Mas-Ruiz, F.J., Ruiz-Conde, E. and Calderón-Martínez, A., 2018. Strategic group influence on
entry mode choices in foreign markets. International Business Review. 27(6). pp.1259-
1269.
Mohd Satar, N. S., Dastane, O. and Ma’arif, M. Y., 2019. Customer value proposition for E-
Commerce: A case study approach. International Journal of Advanced Computer
Science and Applications (IJACSA). 10(2). pp.454-458.
Moore, K., 2018. Submission to Senate Education and Employment References Committee:
Inquiry into the Appropriateness and Effectiveness of the Objectives, Design,
Implementation and Evaluation of Jobactive.
Wati, L. A., 2018. April. Analyzing the development of Indonesia shrimp industry. In IOP
Conference Series: Earth and Environmental Science (Vol. 137, No. 1, p. 012101). IOP
Publishing.

Zameer, H., Wang, Y., Yasmeen, H. and Mubarak, S., 2020. Green innovation as a mediator in
the impact of business analytics and environmental orientation on green competitive
advantage. Management Decision.
Online
KIDLY. 2022. [Online]. Available Through: <https://startups.co.uk/startups-100/2021/kidly/>
UK’s top 100 disruptive startups revealed. 2022. [Online]. Available Through:
<https://businesscloud.co.uk/news/uks-top-100-disruptive-startups-revealed/>
What is a PESTEL Analysis. 2022. [Online]. Available Through:
<https://corporatefinanceinstitute.com/resources/knowledge/strategy/pestel-analysis/>

3