Debenhams Case Study: Challenges and Solutions

This case study explores the challenges faced by Debenhams, a multinational retail store in the UK. It discusses the SWOT and PESTLE analysis, market trends, technology expenses, and intense competition. The study also suggests management theories to address these challenges and provides reflections and recommendations for the company.

Debenhams case study

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
SWOT analysis.......................................................................................................................3
PESTLE analysis....................................................................................................................3
TASK 2............................................................................................................................................4
Market trend...........................................................................................................................5
Technology expenses..............................................................................................................5
Intense competition................................................................................................................5
TASK 3............................................................................................................................................6
Addressing challenges............................................................................................................6
TASK 4............................................................................................................................................7
Reflection...............................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The case study is based on Debenhams which is a multinational retail store in UK and
known for their presence in various places UK and Denmark. This brand is highly recognised in
UK and having strong brand position over there. Debenhams is one of the oldest and prominent
British brand in which they have distinct norms and values. The culture in Debenhams is
caring, daring and friendly which their people are known to be their assets. In the recent time
the company is starving for their existence as in the year of 2016 their stock value was
decreased to 95% and they had to face drastic fall due to majorly three reasons which are
covered in this report in prominent manner.
TASK 1
SWOT analysis
Strengths Weaknesses
 Strong brand value in UK along with
robust brand image.
 Their treatment for employees and
customers are friendly in nature which
adds high value to their business.
 Out-dated fashion trends.
 Opening of several stores at different
places without effective research
making them to face heavy losses.
Opportunities Threats
 Using of franchise model in order to
capture global markets.
 Understanding and modifying product
offerings as per emerging needs of
customer (Chapman, 2018).
 Intense competition due to presence of
too many highly recognised brands in
global and local markets.
 Intensifying cost of raw material due to
which final cost is rising and
profitability is diminishing.

PESTLE analysis
Political factors: Due to Brexit implication on UK the company is adversely affected by this
due to which they cannot frame stable polices which stays for long term because of Brexit
judgment. On the other side as the company is not at sound position so this is difficult for them
to integrate laws and enforce them in proper manner.
Economic factors: UK is having sound position over its economic condition due to which the
country is enjoying high GDP this resultantly provides high opportunities for growth to the
businesses existed in UK. On the other side due to fluctuation in exchange rates Debenhams is
facing problems in expanding their business in other countries.
Social factors: Debenhams is not efficiently looking forward within new market trends and
fashion. This is the reason that the company is facing problem of fall in their profitability in
drastic manner. On the other side the company is focusing on female products which are
misbalancing their gender target and hampering profitability as well.
Technological factors: Debenhams is using high and emerging technology in their business
which is creating immense opportunities for them to grow in this changing environment. The
company is using digital technology in a very huge manner and along with this they are using
internet for selling their product and enhancing their sales and revenue.
Legal factors: Debenhams is highly rigid in enforceability of legal law which are associated
with their employees and customer as the company treats these aspects in a very prominent
manner. So this factor is rendering high opportunities for them in order to grab growth and
sustainability within marketplace.
Environmental factors: As Debenhams is operating their business in a very significant manner
they have adopted controlling measures of wastage and carbon emission in their business. This
is providing immense opportunities for stability within marketplace. So this factor is beneficial
for them as in encouraging market share and privilege in the market.

TASK 2
The company is facing many difficulties in running their operation in which they are
required to pay high attention so as to eliminate impact of these factors. These challenges are
enumerated as under:
Market trend
The company is having less emphasis on market trends in which they are putting less
focus on emerging fashion trends and do not upkeep expectations of their customers.
Debenhams is not actively studying market trends which are making them to face diminishing
value of their company within marketplace and this is the reason they are facing huge losses
and decreasing share prices in stock market. Debenhams is having intense competition within
marketplace and as Debenhams is not updated according to market trends which is giving their
competitors additional edge over them. Furthermore due to their less inclination towards
innovations within market trends their offerings might become obsolete and cost closure of
their business as well. As the company is facing huge decline over market share which is
leading their employees to diminish their performance which can resultantly hamper their job
satisfaction and productivity as well. Debenhams is having strong presence in markets of UK
which is leading high expectation of customers and by not following market trends they are not
able to retain their customers and gain sustainability in their industry (Simpson, 2018).
Technology expenses
In the current market scenario high and emerging technology are expected and adopted
by end users due to which overall cost of companies are increasing and they have to sacrifice
their profitability for this. In the context of Debenhams they are using emerging technology in
their business which is costly in nature and already the company is losing their market share
and this approach is retaining them in the market so they have to face this challenge. In order to
get proficiency in emerging technology employees of Debenhams are required to provide ample
training so as to make them highly efficient over those approaches. Furthermore Debenhams is
striving for gaining their market share back which was held by them in past years so this factor
is challenging for them as it is having both negative and positive aspects. In the term of positive
aspect technological aspect is increasing their sales but in negative aspect as the company is
dealing with high losses so this is generating them problem thereon.

Intense competition
Debenhams is having huge competitors in the marketplace along with high sales, market
capture and customer base. Their major competitors are M&S, Tesco, Sainsbury’s and many
more. These are the brands and stores which are already a very established retail and fashion
chains which are having their presence at global level and successfully operating at all levels in
a very prominent and desired manner. Debenhams is facing loss of market share as they are not
highly active on market research when they are opening up new branches which are causing
them high losses. Similarly in the expansion plan they are not able to study market situation
which is causing them to face high debt cost which is ceasing them not to adapt changes in
retail environment. On the other side the company is not receiving additional edge in
competitive market which is making them to face high losses within financial market and loss
in customer share as well.
So these are the major challenges which are faced by Debenhams in their business
tenure due to which various difficulties related to sales, services, customer satisfaction and
many more are faced by them. These are those prominent aspects in which Debenhams is
required to focus so as to attain their goals of business functions. (Westbrook, 2019)
TASK 3
Addressing challenges
Debenhams is facing various difficulties in their business which are negatively
impacting their business functions in terms of profitability and sustainability. There are some
management theories which can be used by Debenhams in order to deal with these difficulties
so as to provide high edge in the market place. Management theories are the approaches in
which assistance to run a business can be enumerated so as to tackle business operations in
more prominent manner. Some of these approaches are enumerated as under:
Contingency theory: This management theory states that style of leading the business should
be differentiated in every situation as every situation is having various aspects which cannot be
dealt with a single style of leading. So this theory is suggesting various ways to handle different
situations. In the context of Debenhams as they are facing three major problems in their

business operations so they are required to change their style of management. In the situation of
insufficient decisions of opening up new branches democratic style of leadership is to be
adopted so as to take out various opinions in which high end benefits can be enumerated. On
the other hand when they are planning to launch some new product within marketplace deal
with their obsolete stage systems theory is required to be followed by them. By which by
staying in the systems high end benefits can be provided to the business. This theory is having
immense advantages for them as in employing any new technology in the business because
management is highly flexible in this by which modifications can be introduced in a very
prominent manner (De Marco, Rafele and Thaheem, 2016). This management theory is highly
beneficial for all the level of Debenhams by which suitable managerial style can be selected.
This is providing positive implications to the business in recognition of any complexities which
can harm their business in a very early manner due to which solution can be find out in prompt
manner.
Modern management theory: This management theory inculcates all the rapid changes which
can be arise in future in order to find out prevailing solution in early stage and to avoid any
pertinent dilemma. This is the combination of scientific and social variables in which process of
decision making is highly effective, accurate and profit generating. Within this methodology,
relation has been enhanced between employees and manager. As for Debenhams their people
are their most valuable asset so this theory is proven to be their lifeline because this theory is
incorporating people as in terms of employees and managers (Hatch, 2018). This theory is
having high focus on employee satisfaction, as it was discussed earlier that employees of
Debenhams are worried about their future due to unstable condition of the company and this is
making them highly effective to perform their business operations. Within this theory of
management the major problem of cost and lack of research abilities are solved by Debenhams
as this theory is using ROI technology and due to which any further investment made by
Debenhams could be highly effective and profit giving.

TASK 4
Reflection
As the above report is based on Debenhams and according to me the major problems
associated with the company is not focusing on market trends and market research. In the
current market according to me demands and needs of customers are changing at every point of
time so this is highly required by Debenhams that they provide full focus on market research
and understanding needs of their customer in significant manner. On the other side due to high
existence of market rivalry Debenhams is required to provide distinctiveness to their brand as in
context of innovative offerings or robust marketing research. Similarly Debenhams is facing
high losses in their expansion plans so in order to avoid these kinds of expenses according to
me they are required to take investment decisions by thinking and analysing all the aspects
which was missed by them in their expansion program in Birmingham which lead them to face
heavy losses and debts as well. In the next scenario Debenhams is supposed to provide various
promotional plans to their customer so as to retain them and make a significant clientele.
Similarly for their competitors Debenhams is suggested to use robust marketing techniques so
as to get distinct position in marketplace and improvise their brand identity as well.
CONCLUSION
From the above report it can be summarised that Debenhams is required to focus on
three major aspects in order to minimise their losses and to retain their market position. Firstly
they are required to provide their high emphasis on recognising customer needs and demands so
as to modify their product offerings and to stay updated with latest fashion and market trends as
well. On the other hand the company is required to put their focus on market research during
their expansion plan so as to study some contingent factors and make strategy to deal with them
in order to avoid any losses in these programs. At last they are required to focus on their debt
cost and for this market research is highly needs by them.

REFERENCES
Books and journals
De Marco, A., Rafele, C. and Thaheem, M.J., 2016. Dynamic management of risk contingency
in complex design-build projects. Journal of Construction Engineering and
Management. 142(2). p.04015080.
Hatch, M.J., 2018. Organization theory: Modern, symbolic, and postmodern perspectives.
Oxford university press.
Online
Chapman, B., 2018. What went wrong for Debenhams, 2018.
[Online] Available through: < https://www.independent.co.uk/news/business/analysis-and-
features/debenhams-what-went-wrong-sales-down-share-price-department-store-chain-
a8531726.html/>.
Simpson, E., 2018, Debenhams attempts to 'bring joy back' to High Street
[Online] Available through: < https://www.bbc.com/news/business-45634363/>.
Westbrook, I., 2019, Debenhams deal is national scandal
[Online] Available through: < https://www.bbc.com/news/business-47864580#:~:text=Mike
%20Ashley's%20Sports%20Direct%20has,takeover%20offers%20from%20Sports
%20Direct./>.