Organisational Strategy

This report discusses the challenges faced by Debenhams in the external environment, important aspects of the internal business situation, strategic options for sustaining growth, and steps to develop the company over the next 5 years. It also explores the market penetration, market development, product development, and diversification strategies that can be considered by the company.

Organisational Strategy

Table of Contents
INTRODUCTION...........................................................................................................................2
1. Key challenges facing the company in external environment in UK......................................2
2. Important aspects of internal business situation of company in UK.......................................4
3. Strategic options and direction that can be consider by company for sustaining growth in
UK and international market........................................................................................................5
4. Steps needs to be taken in order to develop the company over next 5 years in UK and
international market ....................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
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INTRODUCTION
Organisational strategy considered as total of actions where a company intends to take for
the purpose of attaining organisational goals. This is important for management to make strategy
and plans so goals can be achieved. In other words, this is a chain of actions and activities which
helps to complete the target and increase production (Cacciolatti and Lee, 2016). This report is
based on Debenhams which is British retailer operating department in United Kingdom. This is
large size organisation which sales different types of products at many location. Different topics
are covered in this report such as challenges facing the company in external environment,
important aspects of internal business situation, strategic option and direction consider as
sustaining for growth and steps which needs recommendation to develop the company.
Main Body
Dabenhams is a British international company which is retailing company in UK, Ireland
and Denmark with franchise in other countries. This was founded in 1778 eighteenth century as a
single store in London who is providing products at 178 locations by selling range of clothing,
fashion items, household items and furniture. The main focus of company is to expand the
market share by making strategies and implement them effectively. This
1. Key challenges facing the company in external environment in UK
External environment involves those factor which are uncontrollable and impacts on
business organisation. This is important to focus on these factors and make efforts to overcome
the problems. Dabenhams organisation which is large organisation facing different key
challenges in external environment in UK that are as explained:
Political factor – This factor involves government bodies, rules and regulations, labour
laws, foreign policies, tax rates etc. which has influenced the operation of Debenhams and its
activities. From the annual report 2018 it has defined that after Brexit the European organisation
had wind up their business in London which became opportunity as its sale volume and growth
has been increased which has impacted in good way (Challenges faced by Debenhams, 2019).
On the other side, after Brexit UK's government has changed the trade policy in retail sector
which became challenge for organisation to face the high cost and sale their products by
following new policy.
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Economical factor – This factor involves income, inflation rate and change in foreign
current which has affected the business activities in UK where it has established. From annual
report 2018 it has defined that Brexit vote has given a positive view to Debenhams on City's UK
which helps to measure and increase the Household cash flow due to increase in disposable
income of people (Ciocoiu, Hubbard and Siemieniuch, 2018). On the other side, Brexit created
higher inflation due to weak sterling and increase in holiday cost which made proven and more
resilient than feared. It stated as slightly growth rate which impacted activities of Debenhams.
Social factor – This factor involves trends, customs, Age, population growth, changes in
needs, income level and lifestyle which impacts on business operation in positive and negative
manner. In context to Debenhams, looking at the data of 2018 stated that people are getting
change in their trend and lifestyle where approximately 1200 respondents has given positive
supports which is good outlook for organisation as it expend it online and retail business.
Moreover, it indicating the improving outlook for UK closing, cosmetics and other retailing
products which was better than expectation (Enya, Pillay and Dempsey, 2018). At the same time
negative impact was continuous weakness in home related goods and spending which can
reduced the administration.
Technological factor – This factor consider different methods, ways, innovation and
new technology in organisation which is used to increase the production as well as profit level of
company. This is highly influencing factor due to which Debenhams has faced challenges of new
innovation, supply chain, digital services and other. For instance, by using new technology
management of such organisation had top work hard to make shopping easier and more fun for
their customers by reducing colleague task and time. This has stated good positive results as
customers started to buy product online by using mobile which helped to integrate the customers
and organisation. Due to this factor Debenhams faced the challenge of high investment, skilled
worker and training to their employees which reduced the profit margin of organisation.
Legal factor – This factor involves legal and regulatory framework such as labour laws,
anti discrimination, food safety etc. which need to follow before running organisation. As shown
in Annual report 2018 of Debenhams is working under legal framework, following labour law,
food and safety etc. which helps to increase the business activities. This organisation has faced
the challenge as loss of stakeholder trust and confidence , material adverse effect, code of
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conduct of suppliers which robust the retailing activities and created risk which being monitor
closely (Hernaus, Vuksic and Štemberger, 2016).
Environmental factor – This factor basically focus on environmental safety rules and
standard which is important for organisation to follow and enhance the market goodwill.
Debenhams is following socially responsible practices, waste management programme and
develop the inspiring environment which helped to establish business in UK market easily.
Moreover, management seek to operate the stores, sourcing operation and logistics in different
way which minimises the use of resources and energy. This has faced challenges of innovation,
high carbon effects while running the business but it managed by organisation.
2. Important aspects of internal business situation of company in UK
Internal business environment is related with internal aspects which can be control in
order to improve the business profits. This involves, management, corporate culture, current
employees etc. all helps to know the situation of business. In context to Debenhams, internal
analysis of organisation has been defined as:
Strength Weakness
 Debenhams has high brand image and
equity in fashion world.
 It has 150+ stores which are presence in
around 20 countries.
 The products and services includes
fashion clothing, accessories, electrical,
gifts, home and furniture and furniture.
 Nearly 30000 employees are working
and satisfying the customers.
 Multi brand in retain sector with
excellent customer service.
 Presenting many retail store which
capture market share slow.
 It has limited global geographic
presence.
 Low customer base.
 Competitors are exist in business
market (Johnson, 2016).
Opportunities Threats
 Focus on customer demand and
changing environment.
 High opportunity to spread business in
 Rising prices of raw material will
increases input costs.
 High brand awareness and demand for
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European territories.
 Customer preference and choice.
 Largest supermarket that spread to
make global presence.
 Quality of products and high brand
image.
specific products that lead to brand
switching.
 High competition from domestic
players in fashion industry.
3. Strategic options and direction that can be consider by company for sustaining growth in UK
and international market.
Strategic option consider as creative alternative action oriented response to external
situation within organisation. It helps to get advantages of facts, trends and opportunities outside
the world which helps to make the good position of business. In business organisation there
should be strategic option which can help to solve the problems and growth of business on
continuous basis. Debenhams is retailing fashion industry that uses Ansoff's Growth matrix in
order to growth of business organisation that are as defined:
Market Penetration – In this strategy, company uses its products and services in
existing market which helps to increase the market share and growth of business. The
Debenhams can use this strategy by introducing its existing products in existing market by
decreasing prices of products, acquiring a competitor in same market place and increasing the
promotional strategy which can help to increase the sale of business organisation and can grow
the business effectively.
Market Development – In this strategy, business firm enter in to new market with their
existing product that increases the sale of products and services. Debenhams has an option to use
this strategy by catering to a different customer segment, entering in to domestic market and
entering in to foreign market which will help to increase the sale and growing the business
continuously (Ansoff Matrix, 2019).
Product Development – In product development strategy a business firm develop and
introduce new product to cater the existing market which attracts existing as well as new
customers. This can be use by Debenhams by investing in R&D to develop new products,
merging resources for creating new product and creating strategic partnership with other firm
which will help to extend the distribution channel by adding new and existing customers.
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Diversification – In this, a business firm uses this strategy to extend the company's
product line and operate business in several different market which helps to increase the sales
volume and maintain the profits. This strategy can be adopted by Debenhams organisation can
sustain growth for long term by delivering quality of products in different market segment
(Rosenbaum, More and Steane, 2018).
From the above strategy, Debenhams is adopting market development strategy is suitable
and appropriate strategy will help in growth of business by providing products and services in
new market. This will help to increase the sale of products and services ans retain their existing
customer.
4. Steps needs to be taken in order to develop the company over next 5 years in UK and
international market
From the annual report 2018 of Debenhams it can be understand that organisation is
running its business successfully in UK by facing many challenges which give positive outcome.
It has adopted new technology which strength in digital sales growth and it focus on changing
demand of customers in order to provide products accordingly. The main object of such
organisation is to build successful future against changing background. For the above discussion
it has recommended that for developing the Debenhams business over 5 years in UK and
international market management need to make strategic plan which will helps to know what
action should be taken. With the help of market development strategy Debenhams can enter in to
new market or globally where it introduce from products and services which attracts customers
and encourages them to buy the products.
To face the competition it should digital technology, self checkout and online website
facility which will help to increase the sale of business organisation and sustain the growth of
business industry in UK and international market. Management need to focus on different factors
such as political system, buying capacity of people, code of conduct of suppliers, advance
technology and lifestyle of people which influence people and make buying decision. Proper
budget should be prepare where they can get idea of their spending and outcome that helps to
develop the business in other areas and maintain higher profits.
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CONCLUSION
From the above report it can be concluded that strategy is a plan which is prepared by
management in order to run their business and maintain the profits on continuous basis. If
organisation has proper plan and strategy then only it can sustain in global market. Ansoff,s
Growth matrix should be used by organisation which helps to develop the business by selecting
appropriate strategy. PESTLE analysis is consider as external analysis which is done by
management to know the impacts where as SWOT analysis is used to know the strength and
weakness of business industry. Organisation should select the appropriate strategy which helps to
increase the business activities and business performance.
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REFERENCES
Books and journals:
Cacciolatti, L. and Lee, S. H., 2016. Revisiting the relationship between marketing capabilities
and firm performance: The moderating role of market orientation, marketing strategy
and organisational power. Journal of Business Research. 69(12). pp.5597-5610.
Ciocoiu, L., Hubbard, E. M. and Siemieniuch, C. E., 2018, June. Implementation of remote
condition monitoring system for predictive maintenance: An organisational challenge.
In Contemporary Ergonomics and Human Factors 2015: Proceedings of the
International Conference on Ergonomics & Human Factors 2015, Daventry,
Northamptonshire, UK, 13-16 April 2015 (p. 449). CRC Press.
Enya, A., Pillay, M. and Dempsey, S., 2018. A systematic review on high reliability
organisational theory as a safety management strategy in construction. Safety. 4(1). p.6.
Hernaus, T., Vuksic, V. B. and Štemberger, M. I., 2016. How to go from strategy to results?
Institutionalising BPM governance within organisations. Business Process Management
Journal.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Rosenbaum, D., More, E. and Steane, P., 2018. Planned organisational change management.
Journal of Organizational Change Management.
(Cacciolatti and Lee, 2016) (Ciocoiu, Hubbard and Siemieniuch, 2018) (Enya, Pillay and
Dempsey, 2018) (Hernaus, Vuksic and Štemberger, 2016) (Johnson, 2016)
(Rosenbaum, More and Steane, 2018)
Online
Challenges faced by Debenhams. 2019. [Online]. Available through:
<https://ir.debenhams.com/static-files/32bcca3d-8332-4a15-bfbe-08398fc595f1>
Ansoff Matrix. 2019. [Online]. Available through:
<https://corporatefinanceinstitute.com/resources/knowledge/strategy/ansoff-matrix/>
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