Strategic Leadership: Analysis of External Environment of M& Co. Group in Clothing Retailing Industry

This report analyses the microenvironment of M& Co. group in clothing retailing industry using strategic tools such as PEST analysis, Porter's Five Forces Framework, and VRIN framework. It includes survival and success factors, Porters Value Chain, Business canvas model, and conclusion. The subject is Strategic Leadership and the document type is a report.

Strategic Leadership

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Contents
....................................................................................................................................................0
Introduction................................................................................................................................2
Internal and External Analysis...................................................................................................2
PEST Analysis...........................................................................................................................2
Porter’s Five Forces Framework................................................................................................3
Survival and Success Factors.....................................................................................................4
Porters Value Chain...................................................................................................................4
Primary Activities...................................................................................................................4
Secondary Activities...............................................................................................................5
Business canvas model...............................................................................................................6
VRIN framework.......................................................................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................11

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Introduction
Strategic Leadership refers to utilising the strategy to manage the activity of employees. It is
required for the companies to manage the activities of employees in order to achieve the
success. It is significant to analyse the environment before managing the activities of
employees. The main purpose of this report is to analyse the microenvironment of the
company. In this report, the case of M& Co. group has been taken into consideration to
analyse its external environment with the different strategic tools. M& CO. is a Scottish
chain store which is operating under the retailing industry of clothing. In this report, the
analysis will be done on cloth retailing industry to identify the external factors which affects
the growth of the organisation.
Internal and External Analysis
PEST Analysis
Political
It has been seen that the industry contribute in development of GDP that is why government
support the industry. The companies adopts the dual sourcing policy in which at least one
supplier being located relatively close at hand. It is necessary to follow the environmental
policy which is developed by the government. As per the case, the large retailers invest large
amount in product lifecycle management.
Economical
As per the case study, it has been seen that this industry major contribute in GDP of different
countries such as Bangladesh, Turkey, Portugal and Italy. The growth of industry is totally
depending on the purchasing power of consumer. Different countries have different GDP rate

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like in China, the luxury brands much grow in the market due to high purchasing power of
consumer.
Social
The clothing industry is growing with the rate of 4 % per year and this is varies by region. It
also has been seen that the luxurious fashion brands cannot afford by low income consumers
(Haberberg, 2015).
Technological
Technology helps in manufacturing the products as it is mature and readily available.
Different countries have different advantages like Hong kong have advance material
technologies and IT technologies.
Porter’s Five Forces Framework
Bargaining power of suppliers
The company have low bargaining as the fashion retailer have many choices to import the
textiles and to cut and sewn the cloth.
Bargaining power of consumers
The bargaining power of consumers high as there are many companies offer the similar
nature of product. It is a threat for companies because the chances of losing the customer are
high (Haberberg, 2015).
The threat of new entrants
According to the case study, it is not easy for the company to open a new clothing brand in
the market due to high cost requirement. It is also required to enter the market with the new

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ideas and tools which is difficult for any company that is why the threat of new entrants is
low.
The threat of substitute
The company have low level of threat of substitute because fashion retailers provide the
similar type of services to the consumers.
The threat of competitors
The company have the high level of threat of competitors as there are many retailers operate
under the fashion retailing industry such as Zara, H&M and Primark. These are the top
brands that have high market share in the market. As per the case study, Zara took the shares
from several retailers such as Primark and Topshop (Owler, 2019).
Survival and Success Factors
It is require for the company to build the strong relation with its stakeholders in order to
provide the quality of services to the consumer. It also has to adopt the faster and cost
leadership strategy which helps to beat the competitors in the market and attain the large
number of customers.
The financial condition of M& CO. is strong which indicate that it can invest in technology
and research and department so that it can develop the unique designs. Investment in research
and development department helps to analyse the consumer preference and taste from which
it can develop the products and achieve the success in the market (Belton, 2017).

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Porters Value Chain
Primary Activities
Inbound logistics
M& Co. is a chain store which offers the women, men, children and home wear products. As
per the case study, there are many suppliers in the market because the material used by the
company is rare available in the market.
Production
The company provides the similar nature of product in different size and pattern such as
women wear, men wear and children wear (Tools hero, 2019).
Outbound Logistics
The company have 300 stores in the market which provide the services to the customer.
These 300 stores establishes in the different countries such as Scotland, Australia, Ireland,
Poland and many others.
Marketing and sales
The company participated in the Sunday Times “ Best companies” survey to promote its
services. It also provides the discount to the consumer during occasions such as Christmas
and Black Friday.
Service
As per the analysis, it has been seen that the company reduce its debt level and invest in
research and development to analyse the customer preference. It indicates that it provide the
quality of services to consumer. It also provides the online services to the consumer in which
it is growing successful in the market.

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Secondary Activities
Firm Infrastructure
The company is well organised with its departments such as finance department, marketing
department and many others.
Human Resource Management
It hires the employee as per the requirement vacancy of people. It can be said that it hire
people at the right place at right time. The company split their employees in different stores
as per their capabilities such as 3500 in stores and 400 in head offices (M & Co., 2019b).
Technology development
Scotland is the melting pot of technology innovation which helps the company to develop the
new styles and patterns. As per the case study, it has the opportunity to expand the business
in Honkong as it is famous for fashion technology (Scotland, 2019).
Procurement
As it is require for the fashion retailers to develop the strong relation with the supplier’s in
order to attain the raw material in the short notice. Suppliers of the company have the right
information that poses as a challenge for it.
Business canvas model
Key partners
Carol Bokuniewicz,
Liz Trovato
Suppliers
Key Activities
Distributed
services-
Consumer
services,
Value
Proposition
One of the
largest brands of
fashion retailers,
Customer
Relationship
Customer
loyalty by
providing
Customer
segments
Women’s ,
Men’s, Children
are the main

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Marketing and
sale-
Marketing
campaigns and
participated in
different
activities
Unique designs
and price,
300 stores in
different
countries
quality of
services,
Brand value
customer
segments
Families who
have high
income (M &
Co, 2019a).
Key Resources
Employees,
Suppliers,
Finance,
Research and
development,
Marketing
department
(Best
companies,
2018)
Channels
Social media is a
source form
which it
develops the
strong relation,
Customer care
agency,
Marketing and
sales team
Cost structure
Marketing expenditure
Pension scheme
Depreciation
Research and Development
Revenue streams
Fashion Events
Retailing clothes
Trade shows
Selling to customer (Antikainen,

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and Valkokari, 2016)
VRIN framework
This framework is used to analyse the competition in the market. It is classified in the four
categories such as valuable, rare, imitable and Non-Substitute.
Resources Valuable Rare Inimitable Non-
substitute
Competitive
Advantage
Machines Yes No No No Temporary
Advantage
Unique
Designs
Yes Yes Yes Yes Strong
Advantage
Employees
and suppliers
Yes Yes No No Temporary
Advantage
Customer
Loyalty
Yes Yes No No Strong
Advantage
Brand image Yes Yes No No Strong
Advantage
Competitive Analysis
From the above table, it has been seen that the company have rare and valuable machines that
helps it to attain the competitive advantage in the market (M & Co, 2019a). Brand image, and

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customer loyalty are the intangible assets of the company that are beneficial for it because it
also help to gain the strong competitive advantage.
By reviewing the business canvas model, VRIN framework, and porter’s value chain, it has
been seen that M& CO. has the opportunity to expand the business from the competitive
advantage.
Cost savings
It has been analysed that the company reduce its debts and invest in research and
development department to analyse the customer preference. As per the trading results of
2015, it is observed that the company invest large amount in the marketing. It has to save the
money and invest in the important areas from where it can achieve the success (Mckay & Co.
2015).
Relation with stakeholders
As per the case study, it is necessary for the fashion retailers to build the strong relation with
their suppliers. The company has strong relation with the suppliers that is why they get the
services in the short notice. Partners and employees are also rare and valuable for the
company in the market which helps to achieve the success in the market (Fashion Network,
2019).
Conclusion
From the above analysis, it has been seen that the industry is growing with the continuous
rate that is beneficial for the company. It has been seen that the company has high threat of
competitors as there are many companies offer the similar nature of product with the different
price rate. As per the porters value chain, the company is well organised in the terms of

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employees and activities that can be used as a strength to achieve the objective. The company
have the strong relation with its partners as well as suppliers which help to getting the funded
the business. As per the analysis, it has been seen that the company can survive in the market
for long time as per its resources and capabilities.

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References
Antikainen, M. and Valkokari, K. (2016) A framework for sustainable circular business
model innovation. Technology Innovation Management Review, 6(7).
Belton, P. (2017) Competitive Strategy: Creating and Sustaining Superior Performance.
Macat Library.
Best companies. (2018) About M&Co. [online] Available from:
https://www.b.co.uk/company-profile/?m&co-62108 [Accessed 2/3/19].
Fashion Network. (2019) M &Co bucks the trend with sales. [online] Available from:
risehttps://uk.fashionnetwork.com/news/M-Co-bucks-the-trend-with-sales-
rise,1009669.html#.XHuHzLjhXIU [Accessed 2/3/19].
Haberberg, A. (2015) The World Clothing Industry in 2015. [online] Available from:
file:///C:/Users/SYSTEM~1/AppData/Local/Temp/3105416_1657114135_TheWorldClothin
gIndustryin2015-1.pdf [Accessed 2/3/19].
M & Co. (2019a) Our Products. [online] Available from:
https://www.mandco.com/corporate/our-products/our-products/our-products.html [Accessed
2/3/19].
M & Co. (2019b) Recruitment. [online] Available from:
https://www.mandco.com/corporate/recruitment/recruitment-and-careers/recruitment.html
[Accessed 2/3/19].
Mckay & Co. (2015) Interimreport 2015. [online] Available from:
https://www.mckaysecurities.plc.uk/PDF/Interim%20Report%20-%2030th%20September
%202015.pdf [Accessed 2/3/19].

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Owler. (2019) M&Co's Competitors, Revenue, Number of Employees, Funding and
Acquisitions. [online] Available from: https://www.owler.com/company/mandco [Accessed
2/3/19].
Scotland. (2019) Legends | Technology. [online] Available from:
https://www.scotland.org/business/conferences-and-meetings/legends/technology [Accessed
2/3/19].
Tools hero. (2019) Porter’s Value Chain Analysis. [online] Available from:
https://www.toolshero.com/management/value-chain-analysis-porter/ [Accessed 2/3/19].