Strategic Analysis and Management of ASOS PLC

This report provides a strategic analysis of ASOS PLC, including difference between descriptive and prescriptive schools of thought, approaches to strategic management, key models and tools of strategic management, SWOT and PESTLE analysis, and key features of classical perspective on strategy.

Strategic Management

Table of Content.
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Difference between Descriptive as well as Prescriptive school of thoughts in association with
strategic management...................................................................................................................1
Approaches to the strategic management:...................................................................................2
Describing key models and tools of strategic management as well as identifying the key
features of classical perspective on strategy................................................................................3
key features of classical perspective............................................................................................7
Explaining the drivers of internationalisation along with presenting different options available
to enter into external marketplace................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The main purpose of every business organisation is to earn profit and achieve the set
goals and objectives. So to achieve this, the management of the business need to make and
implement different strategies. Here, the strategic management refers to the process of attaining
the competition by making proper decisions and plans (Wunder, 2019). The main aim of the
strategic management is make proper utilization of the available resources effectively and
efficiently in order to remain for the long term in the market. Along with this strategic
management also helps the firms to reduce the risk by adopting different action. In this report,
ASOS PLC is a global firm dealing in fashions and cosmetics products through digital mode.
The respective firm provides the customers with various products such as menswear, women
wear, footwear, cosmetics and many more. The particular report is going to deal with the
difference between prescriptive , descriptive and configuration schools of thought in association
with strategic management. Along with this different approaches to strategy is also highlighted.
This report will also deal in key features of classical perspective on strategy as well as key
models. Furthermore, evaluation of PESTLE as well as SWOT model for framing business
strategies is also discussed. The respective report also identify and analyse the international
drivers as well the various entry options for entering into international market.
MAIN BODY
Difference between Descriptive as well as Prescriptive school of thoughts in association
with strategic management.
Basis Prescriptive school of thought Descriptive school of thought
Overview In order to attain the
competitive advantage, this
approach focus on analytic as
well as planning thought
process with the purpose to
implement the business
strategies (Herazo, Davin and
Sagre, 2019).
In the descriptive approach, it
focus on the strategic theories
which evaluate the real life
situation so that firm can
assess how to put the
strategies in the practice so
that real life business problem
can be solved.
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Strategic decision making Here the strategic decision are
made and implemented by the
top level management instead
of lower level management.
In this approach lower level
managers can participate and
influence the strategic decision
as the decision making
process flows from bottom to
top level managers (Javidaneh
and Karimipour, 2020).
Desired outcomes In order to attain the high
performance suitable strategy
are formulated which is the
main objective of Prescriptive
strategic managers.
But for descriptive strategic
managers efficiency also
matters along with the high
performance (Desai, 2019). In
order to survive in the real
market conditions they give
more focus on developing
strategies .
Process of content vs strategy
formulation
The strategy developing action
and process are the main focus
of the firms who adopts this
approach (Sahu, Padhy and
Dhir, 2020).
On the other hand, necessary
attentions are paid towards the
decisions instead of giving
attention on making the
decision by the descriptive
manager.
Approaches to the strategic management:
Deliberate or adaptive approaches can be classified as the strategy development process
but the actual outcomes is to enhance the profits levels which the most ordinary among the
strategic development process (Miroshnikov, 2019). ASOS PLC company adopts four
approaches in order to make the strategy which are mentioned below:
Classical:
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The classical approach is considered as a deliberate process in order to formulate the
strategy to maximise the profit. With the purpose of meeting the organisational goals and
objectives, this approach helps the firm in identifying and analysing the internal as well as
external factors of the business environment. This also directs in utilizing the resources in a
productive manner.
Evolutionary:
As the economic environment is very difficult to predict so this approach of strategic
management process is formulated so that firm can operate function accordingly. This approach
also allows the firm to effectively react to the pressures created by the macro environment so that
the company can maintain profit and can grow gradually.
Systematic:
In order to understand the importance of local cultural as well as social values the
company take the help of the systemic approach (Liu and et. al., 2020). Maintaining and
balancing the sufficient amount of earnings by gathering the cultural and societal needs and
desires is the main purpose of respective company.
In accordance to the ASOS PLC, the firm uses classical approach of strategic
management process that permit the firm to make the suitable strategies that are based on the
results by identifying and analysing the internal as well as external factors of the business
environment. Through this the respective company can achieve the competitive position in the
target market.
Describing key models and tools of strategic management as well as identifying the key
features of classical perspective on strategy
Porter Generic strategy:
The strategic business model allows firm to achieve the competitive position in the
market by allowing the classification of behaviour as well as driving behaviour (Kukartsev and
et. al., 2022). On context to the ASOS PLC, they adopt porter generic model which has four
element. The model is discussed below:
Cost Leadership:
In order to reduce the cost structure the firm adopts the cost leadership which can be
effective for the middle class people also to buy the products and services. By adopting the lower
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price strategy the organisation can gain support in achieving the competitive advantage in the
market by attracting large number of customers.
Differentiation leadership:
With the purpose of improving customer loyalty, differentiation leadership helps the
company to take advantage of scale of economies in effective manner (Dathe and et. al., 2022).
Here, the firm decides to achieve competitive advantage in domestic as well as in international
platform by launching differentiated products.
Focus strategy
Cost focus:
In respect to draw attention of large customers, the firms adopts this strategies which
mainly focus on making necessary changes as well as reduction in the cost structure.
Differentiation focus:
With a focus to gain new market advantage for higher growth and success, the firm give more
focus on launching new range of final goods and services. Through this, the firm is able to attain
high market share.
Recommendation:
With reference to ASOS Plc company, cost leadership strategy should be adopted by the
firm as large number of customers can be attracted through this strategy. Along with this, it also
assist the firm to explore new markets so that competitive position can be achieved in domestic
as well as foreign market.
Ansoff's matrix of growth:
Ansoff matrix is a tool that helps the organisation to formulate possible growth strategies
to gain the competitive advantage in the market (Landmann, Stolz-Römmermann and Günther,
2020). In context to ASOS Plc, in order to achieve the growth as well as success, this tool helps
the firm to select best possible choices in effective and efficient manner. The elements of Ansoff
growth matrix model are discussed below:
Market Penetration:
This element of market strategy refers to the existing range of product within the existing
market place. By adopting this strategy, the company can attract more and more customers in the
domestic market so that current market share can be increased. In opposition to this, this strategy
does not seems to be that effective in enhancing the competitive advantage within the market.
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Market Development:
This market growth strategy of the Ansoff model deals with existing products ranges by
targeting the new customers that are present in foreign country. This strategy allows the
company to target the new customers needs which leads the company to increase their customer.
However this strategy is considered as one of the riskier option as favourable result may not be
provided by customers for the products and services.
Product Development:
This element give focus on developing new products to an existing market. The firm who
poses higher base of customer within the domestic market can effectively increase their market
position by introducing new products or services in the market. By providing customers with the
different range of products, the company can gain loyalty of the customers through which the
needs and wants are also satisfied of buyers. In contrast to this, strategy may not lead the
company towards growth, if the firm don't have good market position within the domestic
market.
Diversification:
This element of Ansoff matrix refers to the process of entering new market with new
products and services (Almutairi and et. al., 2022). This strategy is basically a riskier option for
the firm as they don't know about the uncertainties that are present in particular market. Here the
firm decides to explore the market by launching the new products in new market in order to gain
competitive advantage. If proper research and survey is not conducted by the firm in the market
then this affects the sustainability.
Recommendation:
With reference to ASOS Plc company, they should adopt market development strategy
that will assist them to provide with best ranges of products to customers which will lead in
gaining new market share. Through this the respective company can understand the needs and
wants of the customers that will attract large number of customer and gain competitive position
in the market.
SWOT and PESTLE analysis:
In order to examine the micro and macro environment of the business, SWOT and
PESTLE analysis are the frameworks considered by the organisation.
SWOT ANALYSIS:
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This strategic tool help the company to analyse and identify the internal factors that helps in
achieving growth and success. In context to ASOS Plc, strategy are made by focusing on internal
factors.
Strengths
 By focusing on providing good quality
products, the ASOS Plc company are
able to create good brand image among
the customers and markets. The respective company adopts
different marketing strategies such as
social media, advertisement which
leads in accomplishing the goals and
objectives.
Weaknesses
 In order to improve the customer base,
the company doesn't focus on adopting
new and innovative machinery.
 During the time product return free
shipping policy can negatively affects
the profit margin.
Opportunities
 The company can adopt different
software that helps them to be more
competitive within the market. The firm have the opportunity to
expand their business in the
international market (Papazov and
Mihaylova, 2019). This can be done by
conducting effective surveys that helps
them in increasing their target market
area.
Threats
 Due to the intense competition within
the fashion industry the firms
profitability as well as the market share
are being affected.
 Cyber attack are increasing day by day
which is being considered as the
biggest threat for the firm. This not
only affect the company's productivity
but also impact their goodwill in the
market.
PESTLE framework:
This framework helps the organisation to make the strategy by evaluating and identifying
the macro environment with the purpose of achieving targeted goals and objectives. In context to
ASOS Plc company, this tool can help in knowing more about the external factor in order to be
more effective and efficient. The elements of PESTLE analysis are mentioned below:
Political factors:
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Political factors includes political stability, government rules and policies, trade laws etc.
that can impact the growth strategy of the firm. As the political environment of the UK is stable
and government also doesn't make frequent changes in the laws which leads the ASOS Plc to
explore more opportunities. But in contract to this, Brexit decision can impact the sales and
revenues of the firm.
Economical factors:
Inflation rate, interest rate, unemployment rates etc are involved in this factor (Atherton,
2019). With reference to ASOS Plc, the firm have benefit of high GDP growth in the economy
due to which they can provide customers with the low cost products and services without
compromising the quality of the products.
Social factors:
Social factors includes demographic change, attitude change, lifestyle change etc. As the
customers needs and wants keep on changing so the respective company needs to adopt the
strategies accordingly in order to gain the revenue.
Technological factors:
In this factor development and change in the technology can be taken into consideration.
Here the ASOS plc keeps on updating the machinery that helps them to gain competitive position
in the market.
Legal factors:
Employment law, Consumer law, health and safety law etc are included in the legal
factor. Here the ASOS plc follows all the legal rules due to which the company have to face less
legal consequences due which they can give more focus on achieving goals and objectives.
Environmental factors:
This factor include change in climate, pollution level, waste disposal etc (Erbas, 2019). In
context to ASOS Plc the firm provides the customer with the environmental friendly products
and services with can be easily be recycled. Due to which they ensure smooth functioning of the
operations.
key features of classical perspective
Classical perspective is one of the oldest approach of management that focus more on
organisation structure and behaviour. Key features are mentioned below:
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 Productivity level be enhanced by giving proper attention which is the main aim of the
classical perspective.
 By providing proper guidance, this concept gives more preferences for deploying formal
structure of the organisation about who will report to whom.
 Monetary incentives are provided in this approach in order to motivate and encourage the
workers in best possible manner.
 This concepts also says that workers should be fitted into the right structure according to
the needs of the machine.
Explaining the drivers of internationalisation along with presenting different options
available to enter into external marketplace.
Globalisation is becoming one of the important factor in the business environment which
determine the firms profitability after launching the products in global platform. With respect to
ASOS Plc, in order to know more about the necessary forces of external markets the company,
needs to study and evaluate the mentioned drivers of globalisation which are as follow:
Technological drivers:
Technology plays a crucial role that helps in setting path towards the globalisation. By
adopting the machinery according to the needs and demands according to the requirement of the
customers can help in increasing the revenues (Jin and Cho, 2018). If the firm uses new
technology then they can increase the higher base of customers.
Political drivers:
Political factors plays a significant role while entering the international market. As the
company has to know about the laws and stability of the government in order to be more
productive. So the ASOS Plc can choose the economy which has liberalised trading rules and
policies as well as political environment is stable. It can help the firm to remove uncertainties
regarding trading.
Market drivers:
As the globalisation is the process where the company tap into the international platforms
where the explore the new markets. In order to gain the success in such market the company
needs to understand the customer base as well as different marketing strategies that can be
adopted effectively and efficiently.
Cost drivers:
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In order to provide customers with the reasonable price of products and services, the firm
need to adopt low cost strategies. Hence the ASOS Plc needs to do proper study and survey in
order to the cost strategics adopted by the competitors in the global platforms.
Entry options for entering into international market:
ASOS Plc can adopt various entry options which are available to enter the international
market. Some of them are discussed below:
Export:
By adopting this method, the company can exports its products and services directly to
the foreign markets in order to start the operation in international platform. Through this the
company can expand its production capacity. In context to ASOS Plc the company can get wide
variety of opportunities by boosting export through the help of internet platforms. In contrast to
this trade barriers and process of trading can be very hectic to the firm.
Licensing and Franchising:
By licensing and franchising option, the firm can enter into the international platforms. In
this option, the firm give permission to sell the products to other business entity in exchange of
fixed amount of profit share (Ye and et. al., 2020). This leads the firm to ensure the steady
income flow and exposure to the limited finance. Hence, in this method the company may face
loss due to the leakage of confidentiality in business due to which may result in loss of
competitive advantage.
Joint ventures:
This method can be adopted by the firm in order to enter the international market by
joining hands with the other business enterprise. By investing lower the business can avoid the
financial risk which can benefit the firm in an appropriate manner. In order to improve the
efficiency the company can adopt the various technological resources of the other company. But
in contrast to this different opinions, strategies can create disagreement between the parties that
can hamper the relationship between them. In addition to this, the company might faces problems
in finding the correct business partners. As wrong business partners can lead to the loss of the
firm due to which the goodwill of the firm can also be affected.
Recommendation:
In respect to ASOS PLC, the company should adopt exporting method while entering into the
international markets. As this can be better option for the company as this method leads in
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protecting confidential information of the firm. This will help the organisation to gain the
competitive position in the market in effective and efficient manner. In addition to this the firm
can also take advantage of the lower price strategies through this method by attracting large
number of customers in global platform.
CONCLUSION
From the above report it can be concluded that strategic management is one of the
important concepts that help business organisation to utilise the resources in an appropriate
manner in order to achieve the organisational goals and objectives. This assists the firm to
formulate the plans and policies according the mission and vision which provides right direction
to the company. By adopting low price strategy, the company can gain competitive advantage
within the market. This report has also covered the difference Prescriptive and Descriptive
school of thoughts in relation to the strategic management. In addition to this, different
approaches are undertaken for the strategic management. As the firm are recommended to adopt
cost leadership strategic as well as market development in order to gain the success. There are
various international drivers which can be adopted by firm in order to enter the global market
and exporting is considered as one of the best option.
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