Strategic Management Report: Debenhams Case Study - Strategic Analysis

This report provides a strategic management analysis of Debenhams, a multinational retailer, focusing on the application of Porter's Five Forces model. The introduction establishes the importance of strategic management in organizational planning and achieving objectives. The main body compares strategic theory with practice, specifically examining how Debenhams operates within the context of Porter's Five Forces, including the threats of new entrants, the bargaining power of suppliers and buyers, the threat of substitute products, and competitive rivalry. The report assesses the impact of these forces on Debenhams and suggests strategies to mitigate risks and enhance its market position. The analysis includes market capitalization and a discussion of how Debenhams can address challenges related to suppliers, buyers, and competitors. The report concludes with a summary of findings and references supporting the analysis.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Compare theory and practice......................................................................................................1
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
In any organisation there is a proper planning formulation are required to run any
activities regarding the organisation. Its basically the ongoing process of continuous
planning ,monitoring the activities, analysis all the needs and requirement related to the company
to meet its objectives and targets .strategic management is a process or intent of any organisation
with a motive of achieving vision mission and objectives,in which SWOT analysis and proper
strategic plans are made by senior level management (Bindra, Parameswar and Dhir, 2019). Its
consists of strategy implementation and evaluation, organisation will make sure about there plan
to be successfully implemented all the procedure, project related work, resources to be needed,
organisation structure, and behaviour approach are also included in that management .evaluation
involves analysis and assessment of the action that an organisation put in the market. The below
report is based on a company Debenhams,its a multinational retailer having their departmental
stores in UK and other countries as well , a private limited company with a 178 number of
operating location across the countries .This company deals in product like furniture ,any type of
household products or items and clothing product line as well, Debenhams having different
segment of catering their customer as well with kids ,men and women .
MAIN BODY
Compare theory and practice
As according to the viewpoint of Ovidijus Jurevicius, 2013,Porter five forces model :
This model indicates the industry or a company threats in respect of the market external factor,
basically how the company get affected by different forces are considered under porter five
forces model ,their competitors threats , bargaining power of both the suppliers and buyers in the
market ,it also describe how well an organisation or industry will survive on the basis of the
comparison with competitors and any new entrant threat are clearly mentioned in the
model ,threat of substitute product, the motive of this model is to define the risk and threats
involves by external forces exist in the market (Teece, 2019). An industry or a company have to
change their strategies according to the different forces. Threat of new entrant: This model shows how difficult and easy for a new entrant firm
or industry to enter into the market and through that how they put an impact on existing
companies , basically this force indicates a threat of new company which will going to
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enter in to the market, risk involves in entering into the market all basic barriers are the
forces for new entrant itself .The threat of new entrant is high when low amount of
capital of funds are required to enter into the market, if there is lack of customer loyalty
in market, if there is no government regulations are followed in a particular market. Bargaining power of supplier: This model indicates the power of suppliers in respect of
selling their product is that raw materials on higher price and of low quality to their
buyers this will happen when a suppliers is in a strong position in bargaining, and this
will directly affect the buyers company in respect of its profits because they will buy on
higher price with low quality raw material as well (Okumus and et.al 2019). Bargaining
power will be strong if few substitute raw material are exist, if switching cost is even her
then that of existing suppliers. Suppliers having many choices if resources are minimum
or there is lack of substitute product are exists buyers has restrict themselves to switch on
another product this will leads to stronger the position of suppliers and yet to stay wit this
external forces . Bargaining power of buyer : In this force buyers will demand for a lower price with high
quality of product from their suppliers when there is a power of bargain with them this
will affect the supplier because higher quality products need higher cost to produce it this
will impact the production of supplier and cost of production are usually higher , buyers
are strong when only few buyers exist in the market ,when there is many substitute of
same product are exists. Suppliers are affected when switching cost is low with
comparing to existing suppliers. Buyers will having buying capacities in large this will
leads to generation of more customer tends to show strong buying power. Threat of substitute : This force occur when buyers are having power of buying the
substitute product with ease having attractive price and cost lower than that of existing
suppliers if there is a flexibility of switching from one product to another with having
lower price this will affect the suppliers profitability and not many options are exist for
them (Bell and et.al 2018). Substitute products increasing the chances of threats for
suppliers to survive in the market they have to bear losses sometime because buyers will
switch to new supplier any time , so they will have to make sure about the pricing and
quality to remain in the market .
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 Rivalry among existing competitors : This model consists of competitive nature in
market and having a cut throat competition among the existing industry is that companies
are trying to compete with each other in respect of staying longer in the market with quit
e strong market from another company comprises of goodwill and brand importance this
will leads to low profit for them cause each company will try with something extra to sale
their product (Agwu, 2018). Competitors are to be more specify with their product or
services pricing strategies and have to check the target market on the basis of practises
follow by the them .If competitors are of equal in size having relevant funds and
resources will leads to tough competition in the market like retail stores of Debenhems
and stores of Tesco having a same product line and target market so this will leads to
generation of competition in the international market as well.
In accordance of Debenhem porter five forces: On the other prospect, by applying this
model on a leading retail company of UK strategic management plays an important role in
distinguish the industry situation and external forces manager will use this model to obtain the
certain result which pointing out the threats and external forces moving in the international
market of UK in respect of retailing sector, because of the high competition and risk involvement
in this retailing industry the flow of external forces are maximise time to time ,manager will try
to analysis the market scenario to develop the proper strategy management and enhance the long
run of the industry as well. Debenhems is listed in London stock exchange and have a market
capital of $685.07million (USD).
Threats of New Entrants:
In retailing industry there is always a chance of something new can be enter into market
in respect of product and services that are provided by retail sector , new entrant or a firm will
put pressure by contributing in new ways of innovative product and services through lowering
the price of their product and reducing the cost and initiating the proper strategy against the
existing firm like Debenhems. Forces like this will generate challenges for the retailing industry
like Debenhem through new entrant (Grant, and Baden-Fuller, 2018).This industry will tackle
this situation of new entry forces through by proper formulation of strategic plan In the context
of creating difficulty for the new entrant to enter into the market .
 By analysing the market through identify the customer needs and requirement on the
basis that activity Debenhem will go for new innovative product and services by that new
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customer will try to take interest and buy the product this will leads to generation of fresh
customer in respect of product and customer will retain for the industry as well. By adopting research and development strategies in the industry to cover all the weak
point of industry by spending money on researchers .
Bargaining power of Suppliers:This force depicts that almost every retail industry
having their r own appropriate suppliers in respect of purchasing raw materials at a specific
price suppliers with strong position will going to decrease the margins or profit of the
company .suppliers will take an advantage of their negotiation power and sale their product to
their buyer in higher price this will affect the retail firm profitability (Cescon, Costantini, and
Grassetti, 2019). Debenhem will tackle the situation of this threat of supplier bargaining power
 By adopting the effective supply channel with multiple suppliers.
 By try to focus or deal with those suppliers whose business are depends upon the
buyers.
Bargaining power of Buyers : Higher the bargaining power customer buyers will leads
to more reach in the customer and will achieve the profitability ration of the company as well.
Buyers will always goes for the best offering which are available in the supplier market by pay
minimum price and try to reduce the purchasing cost in order to sale more product in and reach
more customer ,with smaller group of customer having strong base Debenhems will have a
strong buying power is that :
 By generating the customer base in large this will helpful in reduce the bargaining power
of the buyer that will provide an opportunity to the industry to focus more on sales and
enhance their productivity process in the international market (Phillips, and Moutinho,
2018).
 Debenhem by generating innovative product and services rapidly with the changing flow
of market in the context of retailing process, customer will go for new discounting offers
so if Debenhem will going with continuous innovative product this will reduce the limit of
buyers bargaining power.
 By new product Debenhem will catch the focus of customer towards their product and it
will affect their competitor as well .
Threat of substitute product or services:The threats of substitute products and service
offering in an international market will leads to generate more competition and become a threat
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for a retail company like Debenhems ,so to tackle this situation of threat this retail industry will
try to gain the profit of service oriented rather than product oriented approach ,by increasing the
switching cost for the existing customer.
Rivalry among the existing competitors: Competition in retail sector are continuously
growing because of that competitors are developing the same product line of each other with a
different approach to meet the customer by customizing their pricing policies by reducing the
price of the product and by introducing new techniques ta sale their product how can customer
will reach to that product are clearly the statement of existing companies of retailing sector
(Makadok, Burton, and Barney, 2018). This threats will tackle by Debenhem in various ways.
 By growing the structure base of the company with sustainable development.
 Collaborating with the existing competitors having a motive of expanding the market
share will reduce some sort of competition.
Porters five forces is structure of analysing the organization environment. It helps in
observing the capability and weakness of company.
Competitive rivalry : It refers to the number of competitors and their quality to undercut
organization. If rivalry among industry is low then it will show the company is controlled and
maintained very well (Barney, and Mackey,2018). Minimum level of product difference
indicate the high in rivalry. Minimum stitching cost is also indicate high in rivalry customers
are choose product freely because no huge difference of price and quality.
As per Zander henry point of view, 2018 ; competitive rivalry shows the high number of
competitors and Debenham's plc is has tough competition. This company has to face the
pressure from competitor's firm. Profitability of company is low because they target pricing
strategies of each others. The competition will be low if, business have less participant in
marketplace, company develop at fast rate, leadership quality is clear in market , target various
sub-section , high cost of switching for consumers and company can leave the business without
huge loses. Completive rivalry among existing organization if they target same marketplace and
will also be bad if customers are not loyal for exiting firms. If competitors offer same price and
same quality than it reduce the growth of company and it shows the low switching cost to
customers, buying decisions also easy for consumers (Novikov, 2018).
Threats of new entrants : It refers to the new competitors enters in market. In this the
price of product affect the most. governments create major obstacle.
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As per Zander henry point of view, 2018 ; Threats of new entrants shows that if barriers
and profit of industry is low than it attracts the new participant. The new marketers are burden on
exiting marketers.
Some components that cut down the threats of new entrants ; in this business they require
capital and resources. This unit also loses the capability, if both the companies have big
difference between their quality and other factors then customers can focus on one and give
importance if both have similarity then customer confused between both and they can buy other
one it reduce growth also (Buckley, 2018). This company will face low threats of new entrants if
Debenham's plc will focus on improvement and market trends. New competitors have less
distribution channels.
Debenham's plc will be facing new entrants threats in hight numbers if ; existing rules and
regulations help to new marketers, customers can easily switch the brands or they are not loyal
for the brand, starting capital investment is high, if new marketers are easily build relationship
with distributors.
How to over come from threat of new entrants ; build a good relationship with customers
and create brand loyalty, create long terms written agreement relationship with distributors,
Debenham's can invest in development action and get data of customers and provide innovative
products.
Threats of substitutes : It refers to the substitute of product available in market from other
firm.
The demand of product affected by substitute goods in price changes. The substitute products
create more competition in market.
As per Zander henry point of view, 2018 ; Debenham's plc face challenges because of
lots of substitute products (Mintzberg, Ahlstrand, and Lampel, 2020). If in market there is
availability of substitute products is high the n customers can easily use substitute products from
other firm to fulfil their needs they can switch easily.
The threat of substitute products are increase in Debenham's plc when ; cheaper
substitute available in market from other firm. Substitute products provide better quality or same
by he company.
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The threats of substitutes is low in Debenham's plc when ; the switching cost is high.
Provide better quality and services to customers. Build good relationship with customers and
make loyal customers. Improvement and changes regularly in products.
How to over come from threats of substitute; provide better performance and services
than substitute products to the consumers. Develop Strong convincing ability. Loyal consumers
are important for this.
Bargaining power of customers : It indicates the industry are based on customers.
Customers are producing firms.
Buyers are strong if ; they are concentrated towards products. Can threaten to purchase
producing the industry.
Buyers are weak if ; switching cost is high so buyers cannot switch products. Buyers are
different no buyer has any specific choice on price and product (da Silva and et.al 2019).
As per Zander henry point of view, 2018 ; Bargaining power of buyers is challenge for
industry. Industry have to fulfil their needs and wants in affordable price with great services.
Strong bargaining power indicates the lower profitability of Debenham's plc and competition
increases in market. When buyers are weak in bargaining then it has less competition and
addition in growth, profitability and productivity of Debenham's plc.
Some causes that increase bargaining power in Debenham's plc. ; more focused
consumers base increase bargaining power against Debenham's plc . Availability of substitute
products increase the power of buyers. Less cost of switching and Strong Knowledge about
products can also increase power of bargaining. Some elements that decrease the power of
bargaining such as; less knowledge about products, less cost, high cost in switching.
How to overcome; innovate products, create new products and target specific market,
make loyal customers, provide great offers and deals with product.
Bargaining power of suppliers : Industry needs raw material for production such as
workforce, ingredients and other elements. This need leads to seller and buyers bond between
the firm. suppliers are power if they are focused, customers are strong. And they are weak if
competition in suppliers,buy good products.
As per Zander henry point of view, 2018 ; It shows the pressure by suppliers on industry
by accepting various factors such as; cut down availability of products, reduction in quality or
increase price of product . If suppliers have high level of bargaining power than it costs the
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buyers. High level of bargaining power can increase competition in market it show less
profitability and growth. Weak suppliers indicate the high growth and profitability (Ferlie, and
Parrado, 2018).
Bargaining power will be high for Debenham's plc if ; suppliers are focused on specific
area. Suppliers are less but demand of product is high in market. Lots of difference in product.
Bargaining power will be low if ; less cost of switching, suppliers are not focused,
substitute products available in market from other industry.
How to over come; Debenham's plc can fix their place against suppliers by diminishing the
dependency on suppliers. It increase price sense and create written agreement relationship in
long terms with suppliers and it require profit analysis to know about practicability.
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CONCLUSION
It has been concluded from above report that strategic marketing is required for the
business and with this adequate benefits is attained in terms of awareness and market
attentiveness. As it is also be essential for the business under which they have collect adequate
response by which effectual modification is induced with perfection. Furthermore, porters five
forces is used by which strategic formulation of strategy is induced through which long term
success and development is induced with perfection as within the working marketplace.
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REFERENCES
Books and Journals
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Bell, R.G. and et.al 2018. From the guest editors: Opportunities and challenges for advancing
strategic management education.
Bindra, S., Parameswar, N. and Dhir, S., 2019. Strategic management: The evolution of the field.
Strategic Change, 28(6), pp.469-478.
Buckley, P.J., 2018. How theory can inform strategic management education and learning.
Academy of Management Learning & Education, 17(3), pp.339-358.
Cescon, F., Costantini, A. and Grassetti, L., 2019. Strategic choices and strategic management
accounting in large manufacturing firms. Journal of Management and Governance,
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da Silva, S.S. and et.al 2019. The Strategic Management Practice in an Online Experiential
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Ferlie, E. and Parrado, S., 2018. Strategic management in public services organizations:
Developing a European perspective. In The Palgrave handbook of public administration
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Grant, R.M. and Baden-Fuller, C., 2018. How to develop strategic management competency:
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Academy of Management Learning & Education, 17(3), pp.322-338.
Makadok, R., Burton, R. and Barney, J., 2018. A practical guide for making theory contributions
in strategic management. Strategic Management Journal, 39(6), pp.1530-1545.
Mintzberg, H., Ahlstrand, B. and Lampel, J.B., 2020. Strategy safari. Pearson UK.
Novikov, S.V., 2018. Strategic analysis of the development of high-technology manufacturing
facilities. Russian Engineering Research, 38(3), pp.198-200.
Okumus, F. and et.al 2019. Strategic management for hospitality and tourism. Routledge.
Phillips, P. and Moutinho, L., 2018. Contemporary issues in strategic management. Routledge.
Teece, D.J., 2019. A capability theory of the firm: an economics and (strategic) management
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ONLINE
Jurevicius. O., 2020. Porters five forces. [Online] Available through:
<https://strategicmanagementinsight.com/tools/porters-five-forces.html>.
Henry . Z , Debenham's plc porter five forces analysis. [Online] Available through
<https://www.fashioncapital.co.uk/industry/news/326-learning/12874-porters-five-
forces/>
Porter's five forces. [Online] Available through:
<https://www.fashioncapital.co.uk/industry/news/326-learning/12874-porters-five-
forces/>.
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