Strategic Management

Strategic management

Table of Contents
INTRODUCTION...........................................................................................................................3
Vision, mission and values of BACHI Barcelona.................................................................3
Internal analysis of organization ...........................................................................................4
SWOT Analysis of the organization.......................................................................................6
External analysis ( Micro environment and macro environment of organization).................7
Different strategies for marketing. ........................................................................................9
BSC Matrix...........................................................................................................................10
Application of Michael porter's strategy on company..........................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy is a therm which is having a relation with usage if various competitive
forces which are used by organisations so that they can attract more customers and this can
strengthen their performance. This is very helpful in getting of a competitive advantage in the
organisation (Rugma and Verbeke, 2017). This report is based on organisation BACHI
Barcelona which is a company dealing in accessories and handbags. This is a project which was
started by two friends Nuria and Meritcell and is based on a idea that they wanted to create
comfortable accessories and do not wanted to sacrifice on innovative designs of such accessories.
This report consists of overall mission, vision, internal analysis of organization, Vrio analysis,
external analysis, and finally swot analysis has been done so that the basic motive of this
organization can be fulfilled in a effective manner.
Vision, mission and values of BACHI Barcelona
Vision: vision of this company is to maximize the satisfaction level of their customers and
acquire larger share in market through their innovative designs.
Mission: To create comfortable accessories and at same time they do not want to sacrifice
innovative designs. They want to acquire larger share of market by usage of a differentiation
strategy in their products.
Objective: there are some objectives which have been made by BACHI Barcelona to be achieve
in the coming time period:
 To expand their functions on online medium.
 Have prices which are competitive enough to survive with other competitors of market.
 They are willing to expand their business with help of various digital media platforms.
Values: Value of this organization is to satisfy their customers and make customized products
which are innovative and comfortable at same time.

Internal analysis of organization
Resource based view of firm is related with firms resources and is helping them in
achievement of competitive advantage. There are many different types of resource such as
tangible and intangible which play a very important role in achievement of organization
objectives in organization.
Tangible resources: these are related with physical resources such as land, products,
capital which are helping in achievement of competitive advantage. In case of BACHI
Barcelona the capital and infrastructural resources available with this company is categorized in
these type of resources.
Intangible resources: These are resources which is having no physical value. This can
be trademark, reputation or intellectual property rights (Higgins, Omer and Phillips, , 2015). It
can also be related with competence, potential and skills of employees in the organization. Such
resource provided actual competitive advantage to a organization. In case of BACHI Barcelona
the innovative idea of both entrepreneurs us a tangible and most important resource which is
giving this organization a competitive advantage as compared to other competitors.
Heterogeneous resources: this is a assumption which is based on capabilities, skills and
resources which vary from one organization to another. If all the organization will posses same
set of resources then they will not be able to form different strategies which can help them in
competing with each other. In case of Barcelona the different resource is their innovative idea on
which whole company is based.
Immobile resources: This is second assumption of Resource based view of firm in this it
is assumed that all the resources are immobile and can be moved freely from a particular
organization to another organization (Pisano, 2015). This is reason why a particular organization
can replicate its resources of rival organizations and implement various strategies. Intangible
resources are more mobile as compared to tangible resources in BACHI Barcelona.
VRIO Analysis:
This is a analysis which is related to assessment of of various immobile and
heterogeneous resources which are very crucial for the success of organization. There are four
resources which are used in this analysis such as innovative idea, competent employees, quality
maintenance and cost strategy.

Valuable: There are some resources which are very valuable for every organization and
they help in achievement of objectives for such organizations. In case of BACHI Barcelona this
company is having most valuable resource that is innovative idea of providing comfortable and
innovative accessories to their target segment of customers (Thompson, Strickl and Gamble,
2015). Apart from that other three resources such as competent employees, quality maintenance
and cost strategy are also very valuable for this company.
Rare: All resources available with a organization are not rare there are only some
resources which are present in this category, in case of Barcelona the company is having three
resources as rare in comparison with availability of resources with other similar companies,
which are dealing in accessories and hand bags. The three resources are innovative idea,
competent employees and quality maintenance.
Imitability: This attribute is related with the extent to which a particular resource of the
organization can be used by another rival organization. In present case in BARCHI Barcelona
the resources which can be imitated by any other organization includes innovative idea,quality
maintenance which is rare combination found in case of accessories. Hence, these two are the
most valuable resource which is present with BARCHI Barcelona.
Organization: It is necessary for all organization that they have to properly maintain an
organized all resources which are available with them as each resource plays a very crucial part
in achievement of organizational objectives (Shuen, 2018). In present scenario it is said that all
four above discussed resources play a very important role in achievement of objectives and
mission which has been set by this organization. The major resource which is very important for
achieving the objective is the innovative idea which is not with any other competitor of this
company.
Resource valuable Rare Inimitable Organized
Quality
maintenance
Yes Yes
Cost strategy Yes
Competent
employees
Yes Yes yes

Innovative idea Yes Yes yes Yes
From above VRIO analysis it can be said that the resource which will provide BARCHI
Barcelona a competitive advantage is innovative idea which has been developed by its two
entrepreneur and this will help them in acquisition of larger share in market. This is reflected in
mission and vision of organization and also in all the objectives are based on this sole motive.
SWOT Analysis of the organization
In order to analyze the weakness and strength of the company, the higher uses SWOT analysis
framework which are as follows:
Strengths:
 The company have a high presence on social media which increases its market position
and also increases its market share.
 The two women's have high knowledge of market trends as well as of fashion industry
which leads to customer satisfaction (Cortimiglia, Ghezzi and Frank, 2016).
 The company maintains a good relation with suppliers which helps them to gain
competitive edge at market place.
 BACHI Barcelona is renowned for its unique designs which helps them to compete with
its rivals and increase their sales.
Weaknesses
 The company have limited number of suppliers as they are totally depend on this
suppliers for raw materials.
 The suppliers charge high amount which sometimes declines its profit level.
 The company believes in providing innovative products to its customers which
sometimes higher the cost of production.
 Sometimes the company is not able to match with the demand of customers which
develops negative mindset of customers.
Opportunities:
 BACHI Barcelona has the opportunity to increase its business in other countries and earn
high profits (Baumgartner and Rauter, 2017).
 The company can contact to suppliers of other countries and thus declines the power of
suppliers.

 BACHI Barcelona can enter into new product segment such as clothing and this increases
its profitability and market reach.
Threats:
 The biggest competitors of BACHI Barcelona are Afortunadas and Zubi which
sometimes reduce the profitability of company.
 The company is basically focuses on making its online presence which declines its offline
market and thus the customers shift to other brands.
 The bargaining power of suppliers is high is the major threat of the company as their cost
raise which declines profitability level of BACHI Barcelona.
External analysis ( Micro environment and macro environment of organization)
External analysis is a tool that helps a company to analyze its potential opportunities as
well as Threats (Bettis, 2016). With this, it assist the companies to reduce the level of risk within
the changing trends. In order to conduct external analysis the company chooses to use PEST
framework which are as follows:
PEST Analysis
It is a method which is used by associations to evaluate as well as organize those factors which
impacts organization current conditions and can also effect in future. This framework mainly
involves four forces such as technical, social, political and economic as well. With reference to
BACHI Barcelona, the company uses PEST analysis to identify macro environmental factors or
o find out the future opportunities and threats. The PEST analysis is described in detail with
relation to company are as follows:
Political: These factors involves the level of government interference in an economy.
The two factors which is concerned in political factors are political stability and government
policy. With reference to BACHI Barcelona, the political stability of Spain is good and the
government supports companies to innovate or expand their businesses (Rosenberg Hansen and
Ferlie, 2016). This helps company to increase their market and raise sales.
Economic: These factors have high affect on activities and the profit of a company. It
consist of both micro economical & macro economical factors. Micro economic involves the
buying behavior and willingness of customers whereas Macro economic involves he demand of a
particular country. The two elements of Economic structure are interest rates as it affect the cost
of a company and also the level a firm can expand and grow. The second element is Exchange

rate as it impacts on the export and import cost of goods which a company supply to other
country or borrow from other company. In context to BACHI Barcelona, if the company
increases its operations in other countries. An extra cost is added which is the cost of export of
goods to other country.
Social: It is also termed as socio-cultural factors. It involves the attitude as well as beliefs
of people. The two factors involve here is population growth and demographics . A company
demand and activities can be changed as per the trends and culture of societies (Rees and Smith,
2017). Sometimes the companies changes its strategies in order to meet with the value an
opinions of people of society. With reference to BACHI Barcelona, the population of Spain
consume the products as per the trends as it will raises the sales of a company. In addition to
this, the people of Spain are skilled and talented which increases labor cost of the company.
Technological: Nowadays, people like to use those products which is innovative as well
as creative in market. Technology impacts on the way a company market its services as well as
products. The four elements of this factor are Intellectual property, advancement in technology,
emerging technologies, research & innovation as well. In context to BACHI Barcelona, the
company believes in providing new design of accessories to its customers as it attracts large
audiences and increase its profitability. In addition to this, the company uses various applications
of social media to promote its product and raises its market reach. The company have its online
website on which customer can see the product with proper information and then order it. This
will increase its customer base and sales also.
Porters five force analysis:
Bargaining power of suppliers: Herein, the company have limited number of suppliers
as they have near 20 suppliers who provide them the raw materials. Therefore, the suppliers have
high bargaining power to charge according to them which increases the cost of company.
Bargaining power of Buyers: As the company offers unique and classic design to
customers in the market. Herein, the buyers have low power of bargaining as they purchase those
products which are creative and of good quality (Peppard and Ward, 2016). This strategy helps
company to charge amount according to them and earns high profit.
Threat of substitutes: These are those goods which is consume by customers in place of
a particular company products. If the companies have close substitutes there is a high chance that
customer will shift to other bands. If there are few substitutes the the companies have the

opportunity to charge high prices from the customers within the market. In context to BACHI
Barcelona, the company biggest competitor is Zubi which creates the high threat of substitutes.
Threat of new entrants: In these industry the threat of new entrants is high. In order to
enter in this market, the new entities does not need high amount to invest as they can start their
business with their homes also. In addition to this, nowadays people start their business online
and have no particular outlets to sell its product. It does not occurs high cost or consume high
time of new entrants (Ferlie and Ongaro, 2015). With reference to BACHI Barcelona, the
company have high threats of new entrants which affect the overall functions as well as
profitability of the company.
Rivalry with competitors: The major competitor of the company is Afortunadas and
Zubi which undercuts the profit of BCHI Barcelona. This will decline the profit of company if
they did not develop effective strategy to compete with its rivals.
Different strategies for marketing.
 Defensive strategy: It is a tool that aid organization to engage its valuable customers
which is taken by rivals. The organizations increase their advertising which helps
company to attract its existing customers and develop new customers. The main motive
to use this strategy is to enhance value of a product as well as services. The drawback
of this strategy is it sometimes lead to product innovation which incurs the cost of
company.
 Offensive strategy: Herein, the companies takes action towards market leader in order
o gain competitive advantage. It can be achieved as a differentiation, cost and resource
advantage. It involves development of creative designs, reduction on prices, increase in
advertising and many more. This strategy helps company to gain competitive
advantage and maintain good relations with their customers (Bao, 2015). The
disadvantage of using this strategy is it develops conflicts among entities if the new
advertisement approach negative comments on competitors.
 Survival strategy: Here, the companies cut down their cost and laying off workers in
order to generate profit an sustain in the market for longer period. The companies tries
to attract more customers with their existing product in order to survive in market. In
addition to this, the organizations review their strategies in order to meet with the new

trends of market. The new ways of marketing goods and services is developed in order
to create more awareness which leads to increase in market position as well as shares.
 Reorientation Strategy: This strategy is used by organization to maintain a strong
relationship with customers. The main motive here is to regain market position and
shares as well. Most of the organization take help from consultants to facilitate their
product in market.
BSC Matrix
This matrix is developed Boston consulting group with an aim to help company to design
strategic planning. This matrix attains companies to where to spent amount, when to develop
products or when to discontinue its offerings in market (Holloway, 2018). It consist of four
quadrants which are as follows:
Dogs: In this, the products have low market share as well as low growth.
Question mark: Herein, the products have high growth rate but have low market share.
Stars: The product have high market growth and shares in the market.
Cash Cows: At this stage, there is a high market share of a product with low growth.
Application of Michael porter's strategy on company
 Cost Leadership: This strategy mainly focuses on offering low price to customer with
a good quality. The companies sells its goods at average price in order to earn high
profit against competitors. With this, companies sells its product below industry price
in order to maintain market share. Herein, the companies can earn profit when its sells
its product in bulk or if it targets broad market. With reference to BACHI Barcelona,
the company maintains an average price so that they can earn high profit. As if they
lower down the prices it impacts negatively on quality which leads to reduce in the
number of loyal customers who purchase its product because of high quality it serves in
market.
 Differentiation Strategy: The organizations uses this strategy to offer creative and
unique features in the market as compare to rivals. it helps companies to attract large
audience with its differentiate product and gain competitive edge (Ruff, 2015). This
uniqueness allows companies to charge higher prices and gain profit. In context to
BACHI Barcelona, the company offers design accessories in market which is unique

from its competitors. This attains company to charge premium prices and enhance its
profit level (Cook, 2015).
 Focus Strategy: This strategy basically focuses on either cost leadership strategy or
differentiation strategy (Barca, 2017). In cost focus the firms target narrow markets
and minimize its price of products as possible. In differentiation focus, the company
emphasis to offer unique product in order to remain in competition. With reference to
BACHI Barcelona, the company uses this strategy to develop unique design of
handbags as well as accessories for its customers. As it helps company to build loyal
customers and raise its reputation in market.
CONCLUSION
From the above study it has been stated that companies uses various frameworks to do
internal and external analysis. This includes VRIO analysis, PEST analysis, Porters five forces
and many more. This methods help companies to analyze their weaknesses, opportunities, threats
so that they can develop strategies and reduce the level of risk in future. This also assist company
to reach its potential customers and builds customer loyalty. In addition to this, the companies
lower down their price to sustain in market as it also helps company to increase their customer
base also.

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