Debenhams plc: Analysis of Areas of Failure and Recommendations

This report provides an analysis of Debenhams plc, a British department store chain, including areas of failure such as poor management and lack of technology. The report also evaluates the current trends and competition in the industry using SWOT and Porter Five Force analysis. Recommendations include increasing investments in research and development and implementing advanced technology to encourage communication and collaboration among employees and enhance customer satisfaction.

Inquiry Based Learning
1

Executive Summary
Business environment is inclusive of number of factors that have tendency to affect overall sales,
profitability and growth of an organization in industry. The present report is conducted on
Debenhams plc which is a British department store chain. This organization is having number of
strengths in terms of high brand equity in fashion world, strong multi brand retail stores and
strong distribution network. However organization is facing issues in terms of poor management
and less investments in technology which is creating threat such as increase in competitive
rivalry and dissatisfaction among employees and consumers. For which Debenhams plc is
recommended to increase investments on research and development and implement advanced
and new technology. This will help them to encourage communication collaboration and ease of
working among employees and also allow them to enhance satisfaction level of customers.
2

Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Areas of failure –.............................................................................................................................4
Current trends and competition at that time.....................................................................................5
Models of Analysis –.......................................................................................................................5
Conclusion and Recommendations –...............................................................................................7
3

Introduction
The business environment is inclusive of number of elements that are prevailing in the internal
and external environment. It is essential for a company to evaluate these factors and their impact
on organization growth and decision making company needs to investigate its strengths,
weaknesses, threats and opportunities in a particular industry where there are operating its roles
and responsibilities, in order to determine the issues that can affect organization profitability
(Dunne, 2021). The present report is conducted on Debenhams plc which is a British department
store chain. It is operating in the United Kingdom and was founded in the year 1778.
Organization is operating its roles and responsibilities in fashion online retail and beauty store
industry. The report will analyse areas of failures of organization along with certain
recommended practices.
Areas of failure –
Debenhams plc was founded in the year 1778 and in fashion online retail and beauty store
industry. This company is offering wide range of production services to customers. It is a British
department store chain an offers wide range of goods inclusive of household items, middle to
high end clothing, furniture, beauty etc. It has been analysed that in the 21st century the
organization has suffered financial difficulties and also faced some certain challenges company
offer products in the range of electrical, fashion, clothing, toys, accessories human furniture etc.
With more than 25,000 employees is organization offers facilities and services to customers.
Poor management
Debenhams plc organization is facing failure in terms of poor management in which
employees in organization are going through issues such as low morale, demotivation, decrease
in productivity and performance of company (Upadhyay, Kumar and Akter, 2022). Due to this
issue the selected organization is also facing high employee turnover which is causing the
respective organization to face decrease in their overall sales. Due to poor management issue the
company is facing various challenges which is affecting their growth and profitability in
industry. This issue is also causing him company to face dissatisfaction among consumers.
4

Lack of technology
In today’s business environment there is aggressive competition especially in fashion online
retail and beauty store industry. It is essential for organization in all sectors on every scale to
emphasise on technology, as negligence of this will not only lead them to face decrease in
productivity in sales but also enhances competition for a business organization (Kumarapeli,
2019). Technology plays important role, as it not only helps in improving communication
process with consumers and employees but it also help organisations to conduct their business
operation in cost effective manner. In context with the selected organization it has been analysed
that this company is facing higher competition from many other department stores in the UK
such as Oxford Street store, House of Fraser etc. Furthermore it has been analysed that consumer
needs and demands are changing on continuous basis. In this lack of technology implementation
in organization is causing number of failures which is affecting company profitability in negative
manner.
Current trends and competition at that time
Debenhams plc is operating as a British department store chain in the provinces of the
United Kingdom in fashion online retail and beauty store industry. Organization is facing stiff
competition from other rivals. In addition to this there are some certain current trends and
competition prevailing in the market segment that lead organization to face failure in their
management and adoption of technology. Mentioned below with the help of SWOT and Porter 5
force analysis strength and weaknesses of organization along with the current trend in
competition is being analysed.
Models of Analysis –
SWOT analysis
STRENGTHS WEAKNESSES
 Debenhams plc is operating in the
provinces of the United Kingdom and
has high brand equity in fashion
world. This company is having more
than 150 stores in UK. Denmark and
Ireland and having its presence in
 Lack of management and poor
financial planning affecting them to
use the cash more frequently which is
affecting the company overall budget.
 Debenhams plc is facing major
weakness in terms of lack of demand
5

approximately 20 countries.
 Strong multi brand retail stores with
highly efficient consumer services and
strength in acquisition and merger of
companies is among one of the greater
strengths of this company (Vaccari,
2020).
 Organization offer wide range of
products and services inclusive of
accessories, fashion, clothing,
cosmetics, shoes, electrical home and
furniture toys gifts etc.
 Strong distribution network is also
among the greater strength of
company which benefit them to have
reliable distribution network with ad
them to offer services in customers to
market segment in effective manner.
forecasting which lead them to face
higher rate of missing opportunity as
comparatively to other competitors in
the market segment.
 Dis-satisfaction among employees in
the organizational workplace structure
and high employee turnover are some
certain weaknesses which is causing
company to face decreasing its overall
sales.
 Less investment in research and
development and implementation of
technology as per the current trend is
leading company to face inability to
compete with leading players in the
industry.
THREATS OPPORTUNITIES
 Increase in the price of raw material
due to Brexit and the outbreak of
COVID-19 is causing threat to
companies profitability.
 Shortage of skilled workforce due to
lack of proper management is causing
threat to steady growth of Debenhams
plc.
 Increase in competition in industry is
leading company to expose to various
 Debenhams plc is having opportunity
to evaluate new trends in the
consumer behaviour for which they
have great opportunity to build new
revenue stream by investing in
adoption of technology.
 With the help of adopting new
technology company is having
opportunity to provide flexible
working structure to employees which
6

forms of challenges that can affect
their overall sales.
helps in enhancing their overall level
of satisfaction.
 Government green drive offers an
opportunity for the company in which
with the help of emphasising on
sustainable business practices they can
enhance their profitability and
competitive rivalry against other
rivals.
Porter Five Force analysis
Threat of New Entrants
Threat of new entrants is high for the selected Debenhams plc in the industry where they
are operating. As new entrants brings innovation and uniqueness in the manner of offering their
production services to customers with low pricing strategy. This is creating challenges in front of
the respective organization. It is essential for the company to develop competitive edge with the
help of focusing on innovation in the products and services for which they can undertake use of
investing in research and development and technology.
Bargaining Power of Suppliers
The bargaining power of supplier is moderate for the Debenhams plc in the industry as they are
are number of suppliers and strong base of customers (Vlados, 2019). The company is having
negotiation power the organization is managing their competitive edge with the help of having
efficient supply chain with multiple suppliers. However it is essential for organization to
undertake the use of 3rd party manufacturers in order to increase their bargaining power as
compared to other rivals in the industry.
Bargaining Power of Buyers
Bargaining power of buyers is relatively high for Debenhams plc in the fashion online
and beauty stores. There are number of organization in this sector where they offer best services
and products to customers. This increases the pressure on company profitability for long period
of time. In order to overcome this it is essential for organization to build a large base of
7

customers and remain them for longer period of time. This need organization to invest on
innovation and technology while retaining employees for longer period of time.
Threat from Substitute Products
Threat of substitution is high for the Debenhams plc in the respective industry as there
are number of other rivals to provide their products and services to customers in same or similar
form in affordable pricing segment. Debenhams plc is a service oriented company rather than
product oriented. In this it is essential for organization to understand the core need of consumers
and evaluate the current trend in industry (Wheeler, 2021). It has been analysed that according to
the current trend customers prefer to have unique and innovative products. This needs the
company to manage switching cost of customer for which organization need to invest on new
technology.
Rivalry among the existing players
Rivalry among existing competitors is high for the selected organization in industry they
have power to drive down prices and decrease the overall profitability of company. However
Debenhams plc operates in very competitive retail industry the organization needs to emphasise
on retaining employees and build a sustainable differentiation. With the help of collaboration,
teamwork and performing roles and responsibilities with skilled and talented workers
organization can enhance their market share.
Conclusion and Recommendations –
Conclusion
According to the above mentioned analysis it has been concluded that in order to stay
competitive in market segment and satisfy customers needs and demands in a well defined and
effective manner it is essential for a business organization to undertake huge of their strength and
analyse the current trends and competitive factors in industry with the help of this organization
can utilise their strength to overcome the weaknesses in an effective manner it is essential for
organization to stay up to date with the current technology and manage employees in effective
manner while encouraging there motivation and morale this will not only help organization to
stay competitive in market segment but also allow them to adopt current trend and changes in an
effective manner.
8

Recommendation
 According to the above mention evaluation of organization strengths and weaknesses and
current trend in competition it has been evaluated than Debenhams plc is operating in a
highly competitive environment where there are facing competition from number of other
rivals on small, medium and large scale. It has been evaluated that company face
weaknesses in terms of investment in technology and poor management of employees. In
this it is recommended for organization according to the analysis of above model to make
investment in technology. This will help them to analyse the current trend and the extent
of rivalry in the market segment for which they can offer production services to
customers in an affordable and unique manner.
 In addition to this organization is also recommended to focus on environment protection.
This will help in developing positive image among mindset of customers. Organization is
recommended to invest on research and development through which they can evaluate
current trends and can satisfy customers accordingly.
 From the analysis of organization strengths and weaknesses and current industry trend
company needs to make investment in technology, as this will help them to increase
flexible working opportunity for employees providing satisfaction to customers.
Organization is also recommended to provide rewards motivation and other benefits to
employees in order to retain them to have a proper management.
9

References
Books and Journals
Dunne, E., 2021. The Future for Employees Affected by Irish Corporate Insolvencies: A Deja Vu
or Can Ireland Find a Solution?. UC Dublin L. Rev., 21, p.99.
Kumarapeli, K., 2019. The Significance of SWOT Analysis for Performance of Entrepreneurial
Process: A Review. International Conference on Business and Information (ICBI–
2019),[Entrepreneurship & Small Business Management], Faculty of Commerce and
Management Studies, University of Kelaniya Sri Lanka.
Upadhyay, A., Kumar, A. and Akter, S., 2022. An analysis of UK retailers’ initiatives towards
circular economy transition and policy-driven directions. Clean Technologies and
Environmental Policy, 24(4), pp.1209-1217.
Vaccari, E., 2020. Corporate Insolvency Reforms in England: Rescuing a “Broken Bench”? A
Critical Analysis of Light Touch Administrations and New Restructuring
Plans. International Company and Commercial Law Review, 31(12), pp.645-667.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
Wheeler, S., 2021. What Have We Learned about the Corporate Sector in COVID-
19?. Pandemic Legalities: Legal Responses to COVID-19–Justice and Social
Responsibility, p.155.
10

11