Organizational Strategy and Leadership

This document discusses the impact of organizational strategy and leadership on the fashion retail industry. It analyzes the competition, buyer power, and supplier power in the industry. The document provides insights into the strategies employed by market leaders and the changing dynamics of the industry.

Running head: ORGANIZATIONAL STRATEGY AND LEADERSHIP
Organizational Strategy and Leadership
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1ORGANIZATIONAL STRATEGY AND LEADERSHIP
Introduction:
The modern business conduction is seen to experience notable amount of changes
over the years and with the increasing competition of the market, the needs of the changes in
the various aspects of the business are becoming notably visible. The impact of the intense
business competition on the retail industry is pretty significant. The companies operating in
the mentioned business industry are facing the detrimental impact of the intense market
competition which is seen to force them to try different strategies for the effective
management of the impact of the competition (Robinson and Hsieh 2016). The increasing
number of new entries into the market is considered to be a major reason for the significant
increment in the intensity of the competition. As a result, majority of the organizations are
seen to employ the strategies such as the competitive pricing policy or the improvement in
the quality of the products for gaining the much required competitive advantage over the
competitor organizations (Baker and Saren 2016). However, there are few organizations that
are capable of applying both the strategies. With a precise focus on the competition, it is
pretty visible that the organizations are trying their level best in achieving the preferences of
the customers through the design of the products or the services that they offer to the
customers. Hence it is evident that the key changes in the business industry are significantly
influencing the business conduction of the organizations operating in the mentioned industry.
As a result, the organizations are focused in the identification of the changes that have
the potential to improve the sustainability of the business that they are conducting. The
conceptual definition of the retailing states a business process that includes a range of the
business activities that are to be conducted for selling a product directly to the end users
(Pantano 2014). The fashion retailing includes selling of the products like clothing and
fashion accessories. The paper is focused in the elaboration of the various aspects of the

2ORGANIZATIONAL STRATEGY AND LEADERSHIP
fashion retail industry. The paper includes an analysis of the Porter’s five forces for the
effective portrayal of the level of competition that the organizations operating in the
mentioned business are facing. Adding to this, the paper also includes a brief discussion
regarding the changes that the mentioned industry is expected to face in the 5 different
aspects of the mentioned model.
The chosen business industry is the fashion retail industry. The mentioned industry is
facing considerable amount of changes and that is one of the main reason of the fact that the
mentioned industry is termed as ever changing. As the fashion industry is significantly
influenced by the comments of the customers, the business conduction of the organizations is
changing in a notable manner in an attempt to achieve the preferences of the customers. The
Porter’s analysis is significant in delivering the sense of the competitiveness that the
mentioned industry is facing.
Competitive Rivalry:
The mentioned industry is seen include notable number of the existing organizations
such as Blueberry, Next Plc, Mark & Spencer along with ASOS which is significant in
stating the high level of competition that the mentioned industry is able to experience. The
fashion retail industry has a market share of 7% which defines the notable craze of the
customers in purchasing the products of the mentioned industry in repetitive manner
(Fashionunited.uk 2019). In addition to this, the chosen industry is seen to be subjected to a
growth of 1.6% over the he time span of 6 years staring from 2014 to 2019 (Ibisworld.co.uk
2019). The chosen industry is observed to include 11859 number of business organizations
which is significant in specifying the competition of the market. Apart from this, the
mentioned industry is observed to generate 60.7 million euro in the year 2018 along with 24
billion US dollars as revenue in the clothing and the footwear e-commerce industry in the

3ORGANIZATIONAL STRATEGY AND LEADERSHIP
year 2018 (Statista.com 2019). Hence it is pretty evident that the mentioned business industry
is significantly improving in terms of generation of revenue. Apart from this, the revenue in
the fashion segment is close to 24914 million US dollars (Ibisworld.co.uk 2019). The 1.6%
growth rate provides the proof of the significant growth that the mentioned industry achieved
till date and along with that, the industry is expected to achieve a significant increment in the
growth rate which is pretty evident with the CAGR report which claims that the mentioned
industry is expected to achieve a growth of rate of 6.1% over the time span of 5 years starting
from the 2019 to 2023 (Statista.com 2019).
The largest market segment of the fashion retail industry is the apparel industry and
the above mentioned statistics of the growth and the increment in the rate of growth are
significant in specifying the profitability that the industry provides to the organizations
operating in it. Considering the business conduction of the market leaders of the industry, it
can be said that a larger share of the market is notably divided into the companies like
Burberry, Next Plc, Mark & Spencer along with ASOS. There are considerable number of
factors that serve as the basis of the competition such as the application of the pricing policy,
the promotion or the marketing tactics of the organizations, the incorporation of the
technology and innovative ideas into the manufacturing and design or the products along the
achievement of the customer preferences in the design of the products.
The largest company in the mentioned business industry in UK is Burberry in terms of
the market capitalization. The market value of the mentioned organization is close to 10
billion dollars and along with that, the mentioned organization is able to generate a revenue
of 3.8 billion dollars in the year 2017 which signifies the substantial share of market that the
chosen organization is able to capture (Burberryplc.com 2019). Though the concept is retail
fashion, the mentioned organization operates in both wholesale and retail channels where the
retail sales is seen to be significantly larger in comparison to the wholesale sales of the

4ORGANIZATIONAL STRATEGY AND LEADERSHIP
mentioned organization and that is pretty evident with the fact that the mentioned
organization generates 77% of their revenue through the retail channels of the organization
(Fashionunited.uk 2019).
Apart from the mentioned organization, the fast fashion retailer, Next Plc. is
considered to be the second largest organization in the mentioned industry. The current
market value of the mentioned organization is 7.16 billion pounds and with the mentioned
market value, the organization is considered one of the most active retail organization in the
mentioned industry. The company is able to generate a revenue of 4.055 million US dollars in
the year 2018 (Nextplc.co.uk 2019). Apart from this, the excellent product quality of the
chosen organization and the significant reach of the company in the form of 700 stores across
the globe provides significant competitive advantage to the chosen organization
(Fashionunited.uk 2019).
Mark & Spencer is one of the renowned names in the fashion retail industry of UK.
The mentioned organization is seen to achieve a revenue of 10.698 million pounds in the year
2018 (Marksandspencer.com 2019). The organization is seen to achieve a significant edge in
the market competition with the variety in the store formats which include core shops, M&S
Foodhall, Outlet stores along with the online services (Marksandspencer.com 2019). Apart
from this, the significantly strong brand awareness of the organization along with the
operational excellence of the employees of the organization play a crucial role in the success
of the mentioned organization. In addition to this, the increased number of promotional
activities from the part of the organization along with the high profile media campaigns are
capable of providing the much required market limelight to the products and the services of
the chosen organization.

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Apart from these three market giants, ASOS is considered to be the fourth largest
organization in the nation in terms of the sales which is seen to be 1.8 billion pounds
(Asos.com 2019). The company is able to establish a significantly efficient online fashion
store which is observed to sell 850 brands along with the clothing and accessories products
(Asos.com 2019). The international sales of the organization is significantly dependent on the
retail sales of the organization and that is pretty evident with the statistics of 63% of the total
retail sales belong to the international sales category (Fashionunited.uk 2019). Hence, from
the increased business activities of the mentioned organizations, the level of competition that
the chosen industry is experiences, is pretty evident.
Bargaining Power of the Buyers:
The above mentioned organizations that are operating in the mentioned industry are
seen to apply different strategies on the basis of their resources and the business objectives.
Burberry is able to achieve a significant brand which is focused in serving a specific section
of the customers. Under such situation, the mentioned organization is seen to apply the
premium pricing policy for the luxurious products of them (Burberryplc.com 2019). As the
products are designed for the customers who belong to the high class elite zone where money
is secondary, the products are seen to incorporate the best possible quality in the services of
the customers along with highly efficient souring of the materials. This enabled the chosen
organization to serve a period of time in the mentioned industry.
On the other ASOS is seen to concentrate in making sure that they incorporate the
modern technology and innovative solutions to the design of the products. As a result, the
effectiveness of the products is seen to increase in a significant manner (Asos.com 2019).
Adding to this, the organization’s brilliant marketing and promotional strategies along with

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the facilities such as free shipping are crucial in increasing the preferences of the customers
towards the organization.
Apart from this, the application of the competitive pricing policy from the part of
ASOS is seen to be crucial in the increased consumption of their premium quality products.
On top of this, the distinctive brands of the company along with the varied designs of the
products is considered to be significant for the mentioned organization in conducting a
profitable business.
Hence it is pretty evident that the UK fashion retail industry includes a number of the
organizations that are capable of meeting the varied requirements of the customers in an
efficient manner. In addition to this, the industry has significantly enabled the customers to
choose the suitable organization in according to the applied pricing policy from a pool of
considerable number of organizations. In addition to this, majority of the organizations
operating in the mentioned industry are seen to employ the suitable tactics for the
improvement of the quality in the products or the services of the organization and along with
that, the organizations are seen to be notably inclined towards the achievement of the
preferences of the customers (Robinson and Hsieh 2016). Hence this provides considerable
number of options to the customers to choose from.
Bargaining Power of the Suppliers:
The fashion retail industry of UK is expanding in a significant manner and that is
pretty evident with the increasing business conduction of the market leading organizations.
The sourcing of the quality materials is becoming an important aspect of the business
conduction of the organizations as the quality of the products is significantly dependent on
the quality of the materials. Hence majority of the business organizations, operating in the
mentioned industry are seen to be focused in the effective and ethical sourcing of the raw

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materials. This notably increases the importance if the suppliers in the mentioned industry.
However, there are considerable number of suppliers present in the UK fashion retail industry
capable of providing quality raw materials which is considered to be notably important for
the success of the organizations operating in the mentioned industry (Purvis, Naim and
Towill 2013).
Majority of the suppliers of the organizations are capable of providing the raw
materials on time along with following an ethical approach to source the materials. Adding to
this, the suppliers of the organizations are seen to charge a feasible cost for their materials
and along with that, the suppliers are observed to have the intention of providing notable
amount of discounts to the customer organizations which are seen to purchase in bulk. This
plays a significant role for the organizations in enabling themselves to not only provide
quality products to the customers of the organizations, but also in increasing their profit. The
changes in the fashion retail industry of UK is significantly visible when it comes to the
reduction of the lead times. The modern customers of the industry are seen to be more
inclined towards the fast fashion which is pretty evident with the varying requirements of the
customers. With the increasing level of competition in the mentioned business industry, the
organizations are facing the detrimental impact of the competition which has the potential to
affect the growth and generation of the profit for the organizations (Khan 2013).
Hence the organizations which are operating in the mentioned business industry are
seen to be focused in the achievement of the varying requirements of the customers of the
organizations in an efficient manner. In the UK fashion retail industry, the customers are seen
to prefer the organizations which have the capability of aligning their products to the
requirements of the customer through the design of the products. The effective alignment of
the customer requirements is seen to be based on the style statement of the customers. The
design of the products of the modern organizations are seen to be notably influenced by the

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nose piercing, ear piercing, tattoos or the hair dos of the customers. Hence it is pretty evident
that the importance of the suppliers in the development of the quality products is notably
high. As the industry experiences the representation of considerable number of new suppliers,
the level of competition between the suppliers is seen to be high. However, with a precise
focus on the number of suppliers in the mentioned industry, the impact of the suppliers is
seen to be moderate.
Threat of new entrants:
The chosen business industry is seen to experience considerable number of new
entries. The statistics from the CAGR report which shows that the mentioned business
industry is expected to expand and grow in the coming years in a significant manner with a
growth rate of 6.1%, is the main influential factor for the new organizations in entering the
market (Statista.com 2019). Apart from this, the increasing revenue of the mentioned
business industry is seen to play a crucial role for the new organizations in deciding to enter
the market. However, the new entries are seen to face notable number of obstacles in entering
the market. One of the prime concern of the new business entries is seen to be the market
share of the leading organizations such as Blueberry, Next Plc, Mark & Spencer and ASOS.
The brand that the mentioned organizations are able to create is a sheer menace for the new
entries in terms of penetrating the market. The new entries are observed to face he necessity
of applying the competitive or low pricing policy for attracting the customers. However, the
application of the low pricing policy has the potential to affect the organizations in the
generation of the profit and in the improvement of the revenue.
Apart from this, the significant need of bulk investment that the new entries face in
case of building the required infrastructure for the effective management of the business

9ORGANIZATIONAL STRATEGY AND LEADERSHIP
conduction, is seen to be a notable concern for the new entries (Caro and Martínez-de-
Albéniz 2015). In addition to this, the effective maintenance of the quality standards from the
part of the new entries is notable obstacle which the new entries are in need to manage with
the achievement of the appropriate infrastructure. However, majority of the new entries are
seen to face the limitations in terms of achieving the required infrastructure owing to the
apathy of the shareholders in bulk investment. As mentioned earlier, the achievement of the
preferences of the customers is seen to be much needed for the organizations operating in the
mentioned business industry in conducting a sustainable business operations. The urgency of
the organizations in interacting with the customers for the effective identification of their
preferences is a major proof of the fact that the organizations are putting strong emphasis on
the customer requirements while designing their products. Hence, in order to conduct a
sustainable business, the new entries are in need to achieve the varying preferences of the
customers in an efficient manner which is notably difficult for the new entries owing to the
issue of absence of the inventories.
Apart from this, a significant increment in the conduction of the marketing and
promotional activities is prominent in the business conduction of the modern organizations.
The increment in the marketing and the promotional activities is seen to be based on the urge
of the organizations in reaching out to the customers with the products and the services of the
organizations. Majority of the modern organizations, operating in the mentioned business
industry are seen to focus on the increment of the conduction of the promotional activities in
an attempt to communicate the information and the features of the products and services of
the organizations to the customers (McCormick et al. 2014). This plays a crucial role for the
organizations in providing a significant market limelight to the products and the services of
the organizations. Hence the necessity of increasing the conduction of the marketing and

10ORGANIZATIONAL STRATEGY AND LEADERSHIP
promotional activities is pretty evident in an attempt to minimize the detrimental impact of
the intense market competition.
Threat of Substitutes:
As mentioned earlier, the fashion retail market of UK is experiencing the
representation of considerable number of existing market giants along with the participation
of notable number of new entries which is pretty significant in increasing the level of
competition that the chosen industry is facing. The customers of the organizations operating
in the mentioned industry are seen to gain notable amount of bargaining power and that
proves the high threat of substitutes. The industry is seen to have considerable number of
organizations with the characteristics of providing high quality products. Along with that,
majority of the organizations are seen to achieve the preferences of the customers in a
significant manner through the design of their products. More importantly, majority of the
organizations operating in the industry are seen to employ the competitive pricing policy for
attracting larger number of customers (Buccirossi et al. 2013). Adding to this, some of the
organizations are even seen to employ the low pricing strategies for targeting a larger number
of customers with a precise focus on the low income groups.
Apart from the pricing policy, the effective sourcing of raw materials are seen to
provide notable amount of ease in improving the quality of the products or the services that
they offer to the customers. The improvement of the quality enables the organizations to
generate a significant amount of customer loyalty which has the potential to influence the
customers in the repetitive purchasing of the products. Thus the improvement of the quality
has the capability to enable the organization in the improvement of their financial stability
through the improvement of the margin of profit (Fernie and Sparks 2018). The above
mentioned discussion provides the base for the increment of the urgency regarding the

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improvement of the quality of the products amongst the organizations that are operating in
the UK fashion retail industry.
Hence it is pretty visible that the mentioned industry has considerable number of
organizations that are capable of providing high quality products, cheaper products along
with the products that are in perfect alignment with the requirements and the specifications of
the customers. This provides a significantly large pool of organizations for the customers to
choose for the purchases of their products and the services. This reflects a high threat for the
organizations operating in the fashion industry of UK in getting substituted by the other
companies. With the impact of the globalization, the concern of the increasing threat of being
substituted by other companies is seen to affect the business conduction of the UK based
organizations.
Conclusion:
On a concluding note, it can be said that, the UK fashion retail industry has faced
notable number of changes over the years in the form of increment in the social shopping,
improved consideration of the preferences of the customers, increased conduction of the
exhibitions for sales from the part of the business organizations with a precise focus in
achieving the views and opinions of the customers regarding the products along with the
reduction in the cycles of design for the achievement of the varying market trends in a more
efficient manner. In addition to this, it is visible that the mentioned business industry is
expanding in a significant manner and the growth of the industry is providing notable amount
of economic feasibility to the organizations operating in it. However, the concerns like the
absence of infrastructure, the significant market share of the existing organizations along with
the uncertainty regarding their capability of meeting the varying requirements of the
customers are seen to be the major constraints for the new entries into the industry.

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