Strategic Analysis of TK Maxx

This document provides a strategic analysis of TK Maxx, a subsidiary of TJX Companies. It discusses the changes in the UK fashion retail industry and suggests strategies and tactics that TK Maxx can use to maintain its competitive advantage. The analysis covers political, economic, social, technological, legal, and environmental factors, as well as the micro environment and competition. The document also highlights the importance of partnerships, innovative product development, e-commerce, and efficient distribution systems.

Running head: STRATEGIC ANALYSIS OF TK MAXX
STRATEGIC ANALYSIS OF TK MAXX
Name of the Student
Name of the University
Author Note

1STRATEGIC ANALYSIS OF TK MAXX
Table of Contents
Introduction to retail.......................................................................................................1
Introduction to the company..........................................................................................1
Key relevant changes within the UK fashion retail.......................................................2
Relevant changes within the micro environment...........................................................5
Suggest and discuss strategies and tactics that could be used........................................5
Recommendations..........................................................................................................7
Conclusion......................................................................................................................7
References......................................................................................................................9

2STRATEGIC ANALYSIS OF TK MAXX
Introduction to retail
According to Aghazadeh (2015), retail can be defined as the process that is
implemented for selling the consumer services or goods to the customers with the help of
different channels based on distribution in order to earn high levels of profit. The retailers are
able to satisfy the demands of consumers with the help of their effective supply chain. The
fashion retail sector is considered to be the largest employing private sector in the United
Kingdom based on around three million workers who are a part of the industry. The high
profile based organizations that are a part of the industry are able to affect the revenues that
are provided and contribution that is made to the economy of the country (Baumgartner and
Rauter 2017).
Introduction to the company
TK Maxx is the subsidiary of American apparel based organization named TJX
Companies. The organization is based in Framingham Massachussetts. The name that is used
by the TK Maxx is slightly different from that which is used by the American organization TJ
Maxx. The stores of TK Maxx have been opened in different parts of the United States,
Ireland, Australia, Poland. TK Maxx currently operates more than 500 stores all over Europe
and 35 stores are present in Australia. TJ Maxx was established on in Framingham.
Massachusetts in the year 1976 and had changed its name to TK Maxx in the year 1994 in
order to develop its international operations in Europe (Tkmaxx.com 2019).
The opening of new stores of TK Maxx in United Kingdom was reduced in the year
2007. The main focus was thereby placed on the ways by which the company can revamp and
renovate the stores in an effective manner. The old inner city based stores were improved and
revamped in order to improve the experience that is provided to the consumers. The
organization further expanded its operations to other countries like, Netherlands, Germany.

3STRATEGIC ANALYSIS OF TK MAXX
The e-commerce based site of TK Maxx was launched in the year 2009 which had started
initially with the sales of handbags and selling many other accessories as well (Tkmaxx.com
2019).
The pricing policy of TK Maxx is lower in comparison to the competitors that are a
part of the competitive fashion retail based industry (Theguardian.com 2019). The huge
number of stores that have been developed by TK Maxx in Europe are also considered to be
an important factor that can have an impact on the operations and relationships that have been
developed by the consumers. TK Maxx has developed its position in the industry as a
discount store that is able to provide major bargaining options to the customers (Tkmaxx.com
2019). The upmarket based shoppers in UK have also started saving money in the different
fashion products that are offered by a company like, TK Maxx. The success levels of TK
Maxx are mainly based on the levels of discounts that are provided based on different
products (Alyoubi 2015).
Key relevant changes within the UK fashion retail
As discussed by Chernev (2018), the changes that have taken place in the fashion
retail based sector of the United Kingdom will have an impact on the effective operations of
TK Maxx in the future. The company will be able to maintain its operations in the UK retail
sector in a sustainable manner with the help of revenues that have are generated in its future
operations (Theguardian.com 2019). The operations of TK Maxx are based on the physical
stores and the e-commerce platform that is influenced by the changes that take place in
external environment. The PESTLE framework can be implemented in order to analyse the
external macro environment based factors that affect the operations of TK Maxx (Daspit et al.
2017).

4STRATEGIC ANALYSIS OF TK MAXX
Political factors - The political condition that is currently prevalent in the United
Kingdom is based on huge levels of turmoil in the year 2016. The exit of the UK from the
European Union is considered to be a major reason behind the political unrest that has taken
place in the country. The Prime Minister of the country had resigned after the implementation
of Brexit in UK. The unstable political condition is considered to be a major factor that has
affected different industries and organizations that are currently operating in the country
(David and David 2016). The fashion retail based organizations like, TK Maxx have faced
huge issues in the revenues and operations due to high levels of political unrest. The
weakness of currency has been able to affect the revenues that have been earned by TK
Maxx. The exit of UK from the European Union has affected the tax tariffs in country. This
has led to the increase in production based costs. The profit margins of TK Maxx have been
affected in a negative manner by the increase in production based costs of the organization
(Durand, Grant and Madsen 2017).
Economic factors – The value of Pound had gone to the lowest against Dollar after
the implementation of Brexit. The financial turmoil had increased in the last few years due to
changes that have taken place in the economy. The status of London in the fashion retail
industry has been influenced negatively due to the reduction in the power of its currency in
comparison to the other developed countries (Engert, Rauter and Baumgartner 2016).
Investment levels in the country had also decreased and this has an impact on the ways by
which organizations can operate in the competitive fashion retail based industry. The levels
of uncertainty that have been created in the financial markets and business environment are
considered to be highly important factors which have reduced the strength of Pound. The
organizations have not been able to attract consumers in an effective manner due to the
economic downturn that had taken place in the country (Ethiraj, Gambardella and Helfat
2017).

5STRATEGIC ANALYSIS OF TK MAXX
Social factors – The social condition of the United Kingdom has also gone huge
number of changes in the last few years. The organizations that are a part of the industry have
to take into consideration the changing demands and needs of the consumers. A survey that
had been conducted by NHS had stated that the United Kingdom is now known as the “fat
man of Europe” as seven out ten British men and almost six out of ten women have been
identified as overweight or obese (Gans and Ryall 2017). The mainstream retailers like,
Topshop and Zara have taken this factor into consideration and have designed plus size based
products that are offered to the customers. A huge gap has been created in the market due to
increase in levels of plus size based customers in the fashion industry. The clothing retailers
need to develop the products that are required by the customers (Hanson et al. 2016). The
ageing population is also an important factor that is able to affect the fashion choice in a huge
manner. The age of majority of the UK population has started increasing since the year 2014.
The levels of disposable income have started increasing and this has an impact on the ways
by which the shopping based needs have started increasing (Hitt, Ireland and Hoskisson
2016).
Technological factors – The growth and levels of development that have been
experienced in the e-commerce based activities in fashion retail sector have an impact on the
physical or brick and mortar stores. The industry of UK retail based clothing has been
affected in a negative manner by emerging online organizations like, Amazon. The major
retail organizations like, Primark, Topshop and Zara have been able to shape the retail based
environment of the United Kingdom (Kenworthy and Verbeke 2015). The technological
developments in the industry are important parts of the operations of an organization like, TK
Maxx. The organization has not been able to develop its position in the e-commerce market
in an effective manner. Although TK Maxx has recently developed an e-commerce website,

6STRATEGIC ANALYSIS OF TK MAXX
the organization has not been able to provide huge variety of products to the customers
(Morschett, Schramm-Klein and Zentes 2015).
Legal factors – The regulations that been recently developed by the government of
the United Kingdom based on the Workplace Pensions based legislations have an impact on
the policies that are formed by the retail organizations. The legislations that are based on
workplace pensions are able to affect the levels of eligibility of the British employees
(Rosenbaum-Elliott, Percy and Pervan 2015).
Environmental factors – The trends in external environment are able to affect the
retail based sector of the United Kingdom. The consumers in fashion retail industry have
started becoming highly conscious based on the effects of environment and ethical concerns
as well. The retail organizations like H&M have started developing products that are
environment friendly in nature (Shujahat et al. 2017). The pressure that has been provided by
the government are considered to be major concern that is based on the ways by which waste
disposal based operations are conducted by the organization. TK Maxx has faced issues based
on the ways by which its operations are developed with the help of proper environmental
regulations (Wheelen et al. 2017).
Relevant changes within the micro environment
The micro environment or industry in which TK Maxx operates is considered to be an
important of its operations. The costs based on switching the brands are quite low as well.
This is considered to be major that has an impact on the market fashion retail based industry.
The supplier base of the organization is also highly competitive due to the presence of huge
number of similar companies in the industry (Rosenbaum-Elliott, Percy and Pervan 2015).
The major competitors of TK Maxx in the retail based industry of the United Kingdom
include, Secret Sales, Cocosa, Brand Alley, Ross, Macys Inc., Nordstorm, Target and Kohl’s

7STRATEGIC ANALYSIS OF TK MAXX
(Zehir et al. 2016). The high levels of competition in the industry has an impact on the ways
by which TK Maxx is able to maintain its sustainable advantage. The organizations in the
fashion retail based industry of the United Kingdom are able to affect the competition levels
(Ethiraj, Gambardella and Helfat 2017).
Suggest and discuss strategies and tactics that could be used
TK Maxx has faced major levels of issues based on the ways by which its operations
have been developed in the UK fashion retail industry. The company has been affected in a
huge manner by the external environment based changes that taken place in the last few
years. The exit of the United Kingdom from European Union or Brexit is a major factor that
has an impact on TK Maxx (David and David 2016). The four major issues that have been
faced by the organization based on external changes and the developed solutions are as
follows,
The political unrest and fall in the value of Pound had a major impact on the
revenues and levels of profitability of TK Maxx. The profits that have been
gained by the organization are considered to be important factors related to the
position that has been developed in the industry. The proper development of
dealer based partnerships are considered to be important processes that can
increase the profit levels that can be developed in the retail industry
(Baumgartner and Rauter 2017). The partnerships are able to play a key role in
the ways by which the organization is able to maintain its stable position in the
fashion retail industry of the United Kingdom. The political unrest in the
country can be effectively addressed with the help of proper development of
partnerships by the organization (Rosenbaum-Elliott, Percy and Pervan 2015).

8STRATEGIC ANALYSIS OF TK MAXX
The changes that have taken place in the choices and preferences of the
customers in UK have an impact on the products that are developed by TK
Maxx. The increase in levels of obesity and ageing population are major
factors that have an impact on the operations of TK Maxx. The proper
implementation of innovative products in the product portfolio is an important
process that can be implemented by the organization effectively by the
organization (Theguardian.com 2019).
The technological changes that have taken place in the fashion retail sector
have a major impact on the ways by which TK Maxx is able to increase the
levels of profitability and revenues. The development of the e-commerce
based website of TK Maxx is considered to be an important factor that can
affect the ways by which a huge customer base can be developed (Morschett,
Schramm-Klein and Zentes 2015). The development of secured distribution
based systems is important for the enhancement of e-commerce based
platforms of TK Maxx. The proper use of internet is thereby based on the
formation of a distribution based system that is highly efficient in nature (Hitt,
Ireland and Hoskisson 2016).
The suppliers in UK fashion retail based industry are quite powerful in nature.
This has an impact on the prices of products and services that offered by TK
Maxx to the consumers (Theguardian.com 2019). The process of vertical
retailing can be implemented by TK Maxx in order to develop the products
within lower levels of costs and to offer the products to consumers within
shorter periods of time. The value chain can be developed in such a manner
that can help in reducing the time that is required to provide the products and
services to the customers (Durand, Grant and Madsen 2017).

9STRATEGIC ANALYSIS OF TK MAXX
Recommendations
The major recommendations that can be provided to TK Maxx in order to improve the
levels of operations in an effective manner are as follows,
The development of an efficient supply chain that is based on the reduction of
costs based on the production of TK Maxx. The suppliers need to be
maintained by TK Maxx in order to control the prices of raw materials in an
effective manner.
The formation of a secure distribution system of the organization is also an
important aspect that is able to affect the e-commerce based operations of TK
Maxx. The development of the revenues of the organization in highly
competitive retail industry is based on increasing the levels of presence in the
industry.
The changes that have taken place in the social factors based on increase in
levels of obesity and high levels of ageing population can be addressed
effectively by TK Maxx by the development of a new and innovative range of
products.
Conclusion
The report can be concluded by stating that TK Maxx has started facing major levels
of issues based on the changes that have taken place in the external environment. The
political and economic factors are considered to be highly important for the development of
the operations. Changes that have been experienced in choice and preferences of the
customers have a major impact on the organization and its operations as well. TK Maxx
thereby needs to take into consideration the importance of the e-commerce based website due
to the technological advancements which have started in the retail industry of the United

10STRATEGIC ANALYSIS OF TK MAXX
Kingdom. The recommendations that have been provided in the report are based on effective
increaser in levels of profitability and the revenues that have been developed in the fashion
retail based industry of the United Kingdom.

11STRATEGIC ANALYSIS OF TK MAXX
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[online] the Guardian. Available at:

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