Strategic Management Portfolio: Key to Business Success

The report highlights the importance of strategic management portfolios in determining business strategies and investment priorities for organizations. It provides a comparison of two companies, John Lewis and H&M, and discusses the issues that affect their business practices. The report also includes references to various books, journals, and online sources that support its findings.

Strategic Management
Portfolio

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Organization introduction ..................................................................................................1
2. Strategies in market positioning ........................................................................................2
3. Success criteria ..................................................................................................................2
4. Strategic issues ..................................................................................................................3
5. Strategies used to attract target customers .........................................................................5
6. Target customers ..............................................................................................................5
7. Recognize as a brand .........................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
The term strategic management portfolio is a decision making and analysis process
regarding with making of planned choices and investments for a business. The aim of this
process is to determine the strategies and investment priorities for the business or product
portfolio of an organization (Hill and Schilling, 2014). The present report will help to understand
the concept of strategic management portfolio. In this context, two companies namely; John
Lewis and H&M are considered. Further, this report will help to understand strategic choices and
its impact on both companies. This report also includes the concept about strategies which are
used by them in market positioning to attract target customers of UK and international market.
1. Organization introduction
Both John Lewis and H&M organizations come under retail industry. Vision, mission
and objectives of both companies are described below:
John Lewis- It is a department store which is a chain of supermarket operating in the Great
Britain.
 Vision- To lead the market by enhancing the firm's position.
 Mission- Fulfils the need of target customers for the happiness of customers
 Objective- To provide better services, quality products and values to the customers and
for this purpose firm has made a unique promise “Never knowingly undersold” to target
customers (The John Lewis effect, 2015).
H&M- It is a multinational Swedish retail clothing company which is famous for fast fashion
clothing for person of every age.
 Vision- Business operations should run in a sustainable way so that they can fulfil need
of both present and future generation individuals.
 Mission- To increase the number of stores per year by 10-15% and in the same time in
comparable units as well.
 Objective- To provide both quality and fashion at the best price to target customers.
2. Strategies in market positioning
For the market positioning in domestic UK market and international market, both
companies uses different market positioning strategies which are described below:
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John Lewis
To run the business practices efficiently, John Lewis used partnership approach in their
strategies. In this approach, cited firm's employees are known as partners not the shareholders
and these partners also own the business of John Lewis. To meet the objectives, company has use
the price matching policy in their market positioning strategy without setting the low prices. For
positioning the brand name at the forefront of target customer's mind and to build loyalty, cited
firm has also uses the emotional branding (Klingebiel and Rammer, 2014.). The purpose of this
strategy is to create touching connection with the target customers because this is about putting
the customers and their needs first in the priority. The firm’s strategy also includes targeting the
high class customers and earners by offering them best quality of products.
H&M
Cited firm has used the product characteristics and pricing as a market positioning
strategy. Firm has promised to its target customers to provide new designer clothes in market
with the best price. Basic concept of their business is the fashion and quality of clothes at the
best price. With the help of this concept, cited firm is able to attract customers at both domestic
and international market. To maintain their promise, H&M has special team of designers. They
collect fashion designs from different fashion shows and patterns from different country's
culture. The firm always tries to create a good balance among fashion, cloth quality and best
price (Hitt, Ireland and Hoskisson, 2012). To fulfil the need of customers, H&M creates products
for men, women, kids and teenagers according to their taste and styles.
3. Success criteria
With the help of market positioning strategies, both companies are able to increase their
size of customers. They are also able to attract more customers towards their products.
Success criteria of John Lewis
By implementing the strategy, cited firm is maintaining their promise that customers will
not find quality products with better price elsewhere. To attract the customers, company is
providing full high quality products to their customers. With the help of partnership strategy, the
annual bonus which is based on the enterprise’s performance is calculated in the form of
percentage by using employee’s wages. John Lewis always tries to satisfy their employees and
this strategy lead the cited firm as an outstanding retailer. It is also awarded as a “First clothing
retailer, 2015”. To build the positive feeling in target customers, this company offers their
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products through creative advertising method. With the help of this medium, firm create
excitement in their customers to speak about the advertisement and product (Eden and
Ackermann, 2013).
Success criteria of H&M
Basically, H&M is attracted by the modern youngsters and cost conscious customers
because company is offering them new, fashionable and designer clothes in good quality with
best prices. With the help of positioning strategies, H&M is able to influence more customers
towards their product. Through this strategy, they become 21st best clothing retailer across the
worldwide. With the environmental concern, H&M is continuously working to make their
products better in quality. For this purpose, Company manufactures their products in good
working condition with the less impact on the environment. To meet the demand and
requirements of customers, firm produces variety of clothes with attractive designs and patterns.
In the context of fashion, they are inspired from the latest trends to sustainable classics through
this customers can wear clothes season after season. In the success criteria of H&M,
differentiation method helps the cited firm to separate them from the competitors. In this context,
company utilizes natural resources, offers recycling option of garments and reducing the energy
consumption in stores. With the increment in sales, company also increases number of their
stores in various locations (Killen and et.al., 2012).
4. Strategic issues
To analyse the impact of various external factors such as country's economy, law and
culture. on the company, the strategic tool which is known as PESTLE analysis is implemented.
PESTLE analysis of both John Lewis and H&M are described below: Political- These factors include government policies and regulation. Company has to
focus and follow the rules, regulations and policies of government in which they are
operating their business. For example, if government of UK decides to lower the
corporation tax then, it would be beneficial for John Lewis to increase their profits in
future. Economic- Changes in rates like inflation, interest rates and costs like energy and labour
cost will also affect the business operation and practices of company. At the time of
recession, spending of customers also decreases. In this situation, customers will not
prefer to spend their money on the clothes. This situation will also influence both
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companies that their prices of products have to be driven down. The financial crisis of
European Union also has a impact on the global market (PEST Analysis of John Lewis,
2015). Social- The changes in lifestyle, trends, fashion and buying behaviour of customers gives
a huge impact on both companies. To please the customers by meeting their demand,
companies have to adopt the changes of social factors to run the business effectively. By
adopting the changes, both firms will be able to attract more customers towards their
products. To improve the customer satisfaction level, both firm have to provide better
quality product in more fashionable way (Vrande, 2013). Technology- Both companies have to adopt new innovations in the technology because
with the updated technology, both firms will be able to attract customers towards the
company. For example, in the present time e-commerce and internet shopping is a current
trend for retail industry because it directly influence customers towards sales approach.
The advancement in technology mostly encourage customers to purchase the products
online through online outlets. With the help of technology, both companies can improve
their deigns like 3D printing etc. Legal- Both John Lewis and H&M have to follow all laws to run the business practices
legally. In present time the national legislation becomes more stiffen for the health and
safety in respect to both employees and customers.
 Environmental- This factor includes weather, pollution, ethical ad wastage issues and for
this purpose both companies have to do CSR activities for environmental concern. In
production process, renewable sources of resources like cotton and wool are used because
they are environmental friendly. Both companies can reduce the energy consumption and
carbon footprints. The changes in environmental factors may lead to the scarcity of
natural resources which are used in production (Fernhaber and Patel, 2012).
5. Strategies used to attract target customers
H&M is offering standardised clothing line products, so, customers are familiar and
aware about the various range of quality products. To increase the market share and also to
attract more customers, cited firm increase the number of physical stores. In the retail industry
H&M faces huge competition and they are also offering the common products, so, in terms of
product quality the differentiation was not considerable. For this purpose, cited firm focuses on
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both quality and price. In this context, firm attracts the customers by balancing the fashion
trends, design, quality and prices. To meet the current trends of fashion, cited company
introduces their new products in every two or three weeks. To increase the awareness among
customers about the company's product, H&M penetrates in social media like Instagram and
Facebook. With this cited firm performs a significant interaction with customers. To increase the
awareness and encourage the customers about recycling of clothes, cited firm rolled out the
program at all physical store in 2013. In this program they offer the facility to their customers in
which they can bring their old garments in any condition and in return they get the voucher of
money (Turker, 2014).
On the other side, John Lewis offers better services and quality products to the customers
and for this purpose firm has made a unique promise “Never knowingly undersold” to their
customers. The company's proposition is based on the trust that company will not compromise in
the both product quality and services. Through this company's promise and product quality,
many customers are converted in loyal customers. For promoting the product, company also uses
compelling and emotional advertisements to gain the customers attention. Fro example, in one
advertisement a girl from 1925 with a modern man sharing the split screen by conveying the
message that important things of life never changes with the time and it stays same as yesterday.
With the help of this type of creative aids, customers also eagerly wait for the next company's aid
(Brand positioning- Standing out from the crowd, 2011). Through various new aids, John Lewis
convey the message which related to their promise which is never knowingly undersold.
Company never promotes the controversial promotional aids which creates any type of issue
among customers. The cited firm knows very well that how to tap the mind and heart of the
customers towards the company's product and services
6. Target customers
The target customers of both John Lewis and H&M are described below:
Target customers of John Lewis
The target customers of John Lewis are basically from the upper class and high earners.
To meet the demands and requirements of target customers, cited firm produces unique designer
clothes in best quality and also provides best services for the convenience of customers. To
attract the more customers towards the product, cited firm also provides special offers like gift
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cards or vouchers. The company's target customers are high earners and they don not
compromise with the style and fabrics of the clothes. For this purpose, company always try best
to maintain their clothes quality so, their loyal customers do not switch to the other brands or
competitors who care also selling the same products in market. The target customers of cited
firm are kids, men and women in clothes products.
Target customers of H&M
The middle class customers are the basic customers of the company because cited firm
provides good quality cloth products in affordable prices. The main customer of cited firm are
more trendy and fashionable and they look shopping as a social activity. Through this shopping
activity of company's product they feel pleasure in their daily life. The cited firm also proves to
be producing the products which matches the current fashion trends and patterns in the best
prices. With the help of this differentiation, cited is able to create a big brand name and also able
to attract more customers towards their clothes. The company uses the unique selling proposition
to compete their competitors. Through the company uniqueness, more customers are satisfied
with their new design patterns in clothes (Wüstenhagen, 2012). Cited firm offers variety of
product ranges for the broad range of target customers which helps company to increase their
productivity and profits. The customers of H&M are cost concious but more fashionable and
they want to follow current fashion trends without investing or spending lot of money in
garments, so, they prefer cited firm as a first choice because they get best quality products in
their budget. Cited firm produces products for men, women, teenagers and kids.
Basics John Lewis H&M
Price The prices of products are
according to the quality of
products.
Prices are low as compare to
the John Lewis.
Product Both companies provide best quality products with the current
trends to the target customers. But H&M launches new clothes
stuff in every two or three weeks.
Place Both companies uses both physical and online outlets to sell
their products (Martínez and et.al., 2015).
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Promotion To promote the customers,
cited firm uses the emotional
advertisement method to gain
the attention of target
customers.
Company uses the social
media like Facebook and
Instagram to build a strong
connection with their
customers.
Customers The target customers of John
Lewis are high class and high
earners.
The target customers of H&M
are cost conscious and middle
class customers.
7. Recognize as a brand
The first store of John Lewis was opened in mid 1864. The company slogan “Never
knowingly undersold” is in use since the 1925. Year by year company increases their customer
size and also enhance their stores throughout the UK and across the world. The research and
innovations in fashion design of clothes attract many loyal and high class customers such as
Elizabeth ll (John Lewis Marketing Plan, 2012).
In 2011, H&M was the first company who sis a contract relates with fire and building
safety in their international market of Bangladesh. In order to convince the company's partner to
provide the best working conditions for the employees, cited firm initiated a project in
Bangladesh and named it “social dialogue project”. With the help of all strategies which are
mentioned above are key points to make the company successful.
CONCLUSION
With the help of this it is evaluated that strategic management portfolio plays a important
role in the company. The process of strategic management portfolio helps to determine both
strategies and investment priorities for the business operations and product portfolio of an
organization. In this report strategic choices of two companies such as John Lewis and H&M are
described. Further this report includes the issues which affects the business practices of both
company.
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REFERENCES
Books and Journals
Hill, C. and Schilling, M., 2014. Strategic management: theory: an integrated approach.
Cengage Learning.
Hitt, M., Ireland, R.D. and Hoskisson, R., 2012. Strategic management cases: competitiveness
and globalization. Cengage Learning.
Klingebiel, R. and Rammer, C., 2014. Resource allocation strategy for innovation portfolio
management. Strategic Management Journal. 35(2). pp.246-268.
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management.
Sage.
Killen, C.P. and et.al., 2012. Advancing project and portfolio management research: Applying
strategic management theories. International Journal of Project Management. 30(5). pp.525-538.
Vrande, V., 2013. Balancing your technology‐sourcing portfolio: How sourcing mode diversity
enhances innovative performance. Strategic Management Journal. 34(5). pp.610-621.
Fernhaber, S.A. and Patel, P.C., 2012. How do young firms manage product portfolio
complexity? The role of absorptive capacity and ambidexterity. Strategic Management Journal.
33(13). pp.1516-1539.
Wüstenhagen, R. and Menichetti, E., 2012. Strategic choices for renewable energy investment:
Conceptual framework and opportunities for further research. Energy Policy. 40. pp.1-10.
Turker, D. and Altuntas, C., 2014. Sustainable supply chain management in the fast fashion
industry: An analysis of corporate reports. European Management Journal. 32(5). pp.837-849.
Martínez, S. and et.al., 2015. Clothing Industry: Main Challenges in the Supply Chain
Management of Value Brand Retailers. In Enhancing Synergies in a Collaborative Environment.
Springer International Publishing. pp. 69-76.
Online
Brand positioning- Standing out from the crowd, 2011. [Online]. Available
through:<http://www.thestrategydistillery.com/news/strategy-news/brand-positioning-standing-
out-from-the-crowd/>. [Accessed on 27th January 2016].
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John Lewis Marketing Plan, 2012. [Online]. Available through:<http://research-
methodology.net/john-lewis-marketing-plan/>. [Accessed on 27th January 2016].
PEST Analysis of John Lewis, 2015. [Online]. Available through:
<http://www.businessteacher.org.uk/guides/business/pestle/pest-john-lewis.php>. [Accessed on
27th January 2016].
The John Lewis effect, 2015. [Online]. Available
through:<http://www.accaglobal.com/uk/en/discover/cpd-articles/business-management/john-
lewis.html>. [Accessed on 27th January 2016].
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