Strategic Issues Faced by High Flyers Limited and SCH

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06th July, 2018

Scenario 1
High Flyers Limited (HFL) which is a famous United Kingdom based company which
specialise in manufacturing and wholesaling of high quality gymnastics wear and the
associated products for this sport. There are certain strategic issues which the company or
the whole industry is facing, it is important that such issues are discussed in details so that
proper strategy can be drafted for the future of the company (Scholes, 2015). There are set
of both internal and external issues which company need to look into so that a proper
future growth plan can be chalked out for the company. For ease of understanding we are
dividing the issues under two different heads.
External Issues
These set of issues are the one which impact the industry in which HFL is operating.
These are set of conditions which are impacting the industry as a whole and as a major
player HFL need to look into the same with precision. If one evaluates this in proper
perspective one can see that UK sports market is expected to grow as seen from external
factors, with some minor disturbance from the tax perspective. The exports of UK sports
good are expected to raise substantially post BREXIT (Grant, 2016).
Existence of Competition and Parallel Low Quality Market
There are around 6 companies which operate in the same segment as HFL. These are
the ones who provide similar products as HFL and work in organised sector. Couple with
these there are some 100 other small companies which focus on low quality fashion market.
As the case suggests, the average price of HFL product is somewhere in range of $65 while
that of its low quality rivals is around $25. This price difference is huge; however the

branding strategy of the HFL product focusses on premium quality offering and this is the
primary reason why the brand positioning is designed in such a manner.
Status of the Gymnastics a sport in United Kingdom
The Government in United Kingdom has been very proactive and have a very strong
positive outlook towards sports as a whole. There are number of sports related initiatives
taken by the government and that is one of the prime reasons behind the rise of sports
apparel sales in the country (Scholes, 2015). On this external factor one can say that things
look pretty strong. The number of sports initiatives taken by the Government has helped in
promotion and youth of the country has taken this up in a positive manner.
Recent Changes in the taxation structure and impact of BREXIT
This is one of the main factors which are of important consideration for HFL. The
United Kingdom Government has suggested recently that they will impose VAT of 22% on all
sporting goods (Grant, 2016). This is done so that additional tax receipts can be generated in
the country. As per the industry experts, if the proposed VAT increase goes ahead than this
would lead to shrinkage of market by 5%. However one must note the fact that post BREXIT,
the cost of imported products in country has increased dramatically and export demand for
products made in UK is expected to rise. So 5% shrinkage in the market locally due to
change in taxation structure will be covered by growth in exports. This decision is more in
line with external conditions, however internally if HFL can reduce the prices by some
amount in such changing industry conditions they might be in position to capture larger
market share from the competition (Nagle, 2017).
Internal Issues

Recruitment of skilled designers
In the industry under which HFL is operating there is a huge challenge of over hauling
design conditions from time to time. HFL has 150 employees; however they find it very
difficult to recruit able designers from time to time. In fashion industry market share can
drop sharply if one does not keep improving from time to time. The supply chain in the
industry is very well developed, however difficulty in finding suitable designs is very difficult
and a very big challenge for the company.
Supply chain concerns
There are some minor supply chains concerns which HFL needs to tackle. These are
more internal but some of the concerns which are discussed above also impact the same.
The company has invested heavily in technology and this goes in long way in addressing
supply chain concerns. Some of the initial cutting stages are already been automated and it
is good to see that stress on automation exist in the corporation. The whole process is
labour intensive and hence keeping proper management of the same is very important for
the organisation.
New Initiatives taken by the company
HFL has taken up some new initiatives such as option of designing costumes whereby
sports club can create whereas bespoke items and which can then be submitted for final
price quotation. This is where HFL is trying to move to customisation product operation
mode whereby they would be able to serve end customers and charge premia. The focus on
technology and providing customers options to customise will only provide better margins
to the company.