Strategic Analysis of Wilko: Blue Ocean Strategy Framework Report

This report provides a comprehensive strategic analysis of Wilko, a major UK retailer, assessing its current challenges and opportunities within the competitive retail landscape. The analysis begins with an executive summary that highlights the core issues faced by Wilko, particularly in relation to its strategic approach, and whether it leans towards traditional or Blue Ocean strategies. The report then delves into a detailed internal and external analysis, examining Wilko's strengths, weaknesses, and the broader market dynamics, including competition, technological advancements, and economic factors. It employs the Four Action Framework and the Eliminate-Reduce-Raise-Create (ERRC) grid, core components of the Blue Ocean Strategy, to propose strategic recommendations for Wilko to achieve value innovation and sustainable competitive advantage. The report suggests that Wilko should consider the Blue Ocean strategies to identify new areas of growth and gain a competitive edge. The report also discusses Wilko's operations, marketing, and customer service, proposing improvements. It identifies areas for improvement within the company's support activities, including firm infrastructure, human resource management, technology, and procurement, as well as primary activities, such as operations, outbound logistics, marketing and sales, and customer service.

Running head: BLUE OCEAN FRAMEWORK OF STRATEGY
Blue Ocean Framework of Strategy
Name of the Student
Student ID
Name of the University
Author Note

1BLUE OCEAN FRAMEWORK OF STRATEGY
Executive Summary
The aim of this report is to comprehend the current issues faced by the strategic systems of one
of the UK's driving retailer, Wilko, by concentrating on whether it tends to seek after
conventional strategies or blue ocean strategies.
In conclusion the majority of the retailers, to some degree, have blunt separation centre and are
cost conscious. Competition is likewise observed as a positive sign which promote the retailers
possess business. Be that as it may, the way that larger part of retailers is in a development stage,
the cost decreases appear to be less evident. Be that as it may, to seek after Value Innovation and
wind up plainly fruitful, the retailers should begin considering the blue ocean strategies

2BLUE OCEAN FRAMEWORK OF STRATEGY
TABLE OF CONTENTS
Introduction......................................................................................................................................3
TASK 1............................................................................................................................................3
Discussion........................................................................................................................................3
Internal Analysis..........................................................................................................................3
Support Activities....................................................................................................................4
Primary Activities....................................................................................................................5
External Analysis.........................................................................................................................5
TASK 2............................................................................................................................................6
Blue Ocean Strategy........................................................................................................................6
Using the Four Action Framework..............................................................................................7
Eliminate- Reduce-Raise- Create (ERRC) Grid..........................................................................8
Conclusion.......................................................................................................................................9

3BLUE OCEAN FRAMEWORK OF STRATEGY
Introduction
Wilko is one of the known commercial organization which us successfully running a
chain of business of retail location in the different state in United Kingdom. The association
retails have extraordinary varieties of several products including the excellence, wellbeing,
nourishment, office, garden and many more home decor items. Now days the organization has a
vase amount stores which included almost 500 which offers at least 25,000 products in all over
the United Kingdom. Though they have a large numbers of stores they are still having future
plans for adding more quality of stores which may extend 800 by the year of 2018. It also offers
a best online stage where they are offering almost 800,000 products. The business of the online
home décor has already ranked at top 10 businesses in UK's best retailer. Be that as it may,
Wilko has encountered challenges from competitors in recent times and expected to battle this
opposition and recognize new zones of development (Corporate.wilko.com, 2017).
This report tries to examine Wilko’s development procedure through Internal and
External Analysis of key strategic issues and make proposals on how the organization can
accomplish promote development through Blue Ocean Strategy.
TASK 1
Discussion
Strategic management is one of the known administrative duties where it helps to
demonstrate several dangers through a streaming line assess when they are accomplished with
several outside circumstances. The important requirement for the strategic management it should
contain a proper structure, an arranged and planned targets with positive mission, vision and
other required operational arrangements. When the authorities create the perceiving route, the

4BLUE OCEAN FRAMEWORK OF STRATEGY
characteristics of the outer aggressive condition become more affective in the execution of the
given techniques which will help to make more benefits for the organization.
Internal Analysis
The conditions that are internally situated are vast in numbers and keeps on fluctuating,
which depends upon the organization. The administrative department needs to have control so
that they can manage the conditions that may arise within the organization. It acts as a mind map
for the administrative department so that it will help in reducing the shortcomings and the
qualities within the organization. This chain will help in supporting the activities such as the
primary ones so that it can help in identifying each segment (Fisch and Wilkinson-Ryan 2013).
So the case of Wilko,
Support Activities
 Firm infrastructure: Wilko is led by the third generation of Wilkinson family and
granddaughter of the Founder of Wilko (Corporate.wilko.com 2017).
 Human resource management: Wilko has a rich history of 80 plus years in the retail
industry and has been effective at implementing and embedding skills that are required to
be successful as an employee at Wilko but in recent times due to huge changes in the
industry it has been hard for Wilko to cope and implement proper HRM (Grant 2016).
 Technology: Wilko has various technologies in use at every step of the over business
process, be it form the POS machines at the retail counters, the online retail store and
supply chain. The only weakness is that the technologies used are not developing as fast
as its rivals be it Wal-Mart or Amazon (Jones Comfort and Hillier 2016).
 Procurement: Wilko has a very good portfolio of assets be it from over 500 stores and 20
retail parks, in context of its inventory Wilko has huge a inventory to fulfill the needs of
the stores and being in the industry for so long Wilko has a very intensive and a wide

5BLUE OCEAN FRAMEWORK OF STRATEGY
sourcing network, but due to the recent economic condition in UK the sources are
dwindling as there us decline in retail sales in the country (Pollitt 2017).
Primary Activities
 Operations: The operations of Wilko are base on the basic retail model and have not
changed since 1930. Lately it has opted for franchises to decrease the operational load.
 Outbound logistics: Wilko has intensive process of shipping, warehousing and inventory
of products as the 500 plus stores need supply every day (Fisch and Wilkinson-Ryan
2013).
 Marketing and sales: Wilko has been a key player in the UK retail industry and has made
itself a prominent brand and has identified the student market as a new opportunity of
sales.
 Service: Wilko has a lacking customer service policy as many customers after their
purchases has not been able to resolve their problems as the staff are lacking training and
judgment.
External Analysis
It has been found that the internal analysis is much affective and has complicacy rather
than the organized internal analysis. The external analysis is helped organization in many ways
like they way of checking and examining, measuring the outlooks and breaking or separating the
outer conditions. Those are:
 Markets (customers): After BREXIT the retail market has been struck hard as the market
is very tough with less buyers that before. Wilko is also facing subsequent lack of
business and customer.

6BLUE OCEAN FRAMEWORK OF STRATEGY
 Competition: The retail industry in UK is very saturated and Wilko is facing huge amount
of competition from local and international brands like Wal-Mart, Tesco and Amazon
UK to name a few.
 Technology: Wilko is has a quite successful online presence with good sales output and
has also implemented lasts tracking and delivery technology to improve customer service
and supply chain management. (Lewrick et al. 2015).
 Supplier markets: Due to the current economic condition in UK there is lack of supplies
in the market and the more larger international retailer have an extensive supplier market
overseas and thus creating huge problems for Wilko.
 Labor markets: As Wilko is a local brand in the UK it has adequate grip on the labor
market through unions and local politicians and accruing talented individuals is not a
issue for Wilko though it is hard to hire people for Wilko as they are not able to provide
the pay scale that they used to before BREXIT (Amin and Broadbent 2015).
 The economy: The current economy in UK is not suitable for any retail firm as after
BREXIT the buying power of the citizen has decreased dramatically and there has been a
huge increase in public debt in contrast to UK’s GDP (Pollitt 2017).
 The regulatory environment: Sales Taxes as retailers are charged with sales tax while
online retailers are not. This makes a very disadvantageous situation for Wilko in respect
to Amazon and other online retailers in UK. Retailers need to manage a regularly
developing reiteration of labor laws and contract limitations with representatives. (Yu
Ramanathan and Nath, P 2014).

7BLUE OCEAN FRAMEWORK OF STRATEGY
TASK 2
Blue Ocean Strategy
The Blue Ocean Strategy is defines the vase business opportunities for the every products
or items which has no different or opposite or less rivalry in the marketing business plan. The
system helps to roaming around for the searching of the business which is not found very
affective in the firm business and these businesses has no particular estimation weight.
However, in recent days it also found that most of the organization is facing the consequences of
extreme rivalry where they are also required to grab ever possible things and important issues in
the overall industries. When the products are facing the underweight values they become more
dependant rather than the association’s activities regarding the works which will go under
danger. Therefore a particular circumstance is necessary when it is offering the saturated market
for running the business which is known as Red Ocean (Joshi, Saxena and Tarkas 2015).
At the point when there is restricted space to develop, organizations attempt and search
for verticals or roads of finding a new business where they can appreciate an uncontested piece
of the pie or Blue Ocean. (Kim and Mauborgne 2017). The methodology plans to catch new
demand and to make competition immaterial by presenting an item with unrivalled components.
It enables the organization in make tremendous benefits as the item to can be priced steeply as a
result of its exceptional components (Burke van Stel and Thurik 2016).
Using the Four Action Framework
This system was acquainted all together with split the exchange off between ease and
separation to clear a path for a formation of a new value curve. Organizations ought to have the
capacity to answer the four core questions, so in the case of Wilko these questions provide key
elements to provide recommendations on how Wilko could able to change the marketing
strategies and every challenging issues which affecting the current industry paradigm in a

8BLUE OCEAN FRAMEWORK OF STRATEGY
particular order for ensuring about new and uncontested marked opportunities (Kim and
Mauborgne 2015).
1. Wilko has been focusing on the same stagnant market of household goods and hardware
retailing. Wilko is only focused on the fact that it has to keep its market to itself and not
looking beyond the current market Wilko is in. Wilko is more focused in competition
with other bands.
2. Wilko is pushing to hard to stay relevant in the stationery retail industry but it is having
no or little gain as the completion are brands which only specialize in stationery and are
manufacturing their own products for cheaper rates that Wilko. Development of retail
parks is an expensive endeavor and the profits are not in par with the development and
investment costs.
3. Wilko has a lagging customer service program and must raise it not to industry standards
but beyond as customers are the backbone of any retail chain without returning customers
there is no other alternative to keep a retail business running (Phillips et al. 2015).
4. The retail industry in UK is very old fashioned and follow trends that has been there for
decades. Wilko must take notes from international retailers and introduce self checkout
service checkout like Wal-Mart and Kiosks shopping inside stores and in different
location across the operation areas.
Eliminate- Reduce-Raise- Create (ERRC) Grid
It is a basic matrix like apparatus that drives organizations to concentrate at the same time
on taking out and lessening, and in addition raising and making while at the same time opening a
blue ocean market. This method is known as the Four Actions Framework. It helps in pushing
the organizations in an exclusive manner so that the Framework can help in adding value to the
brand by posing the inquiries postured in the Four Actions Framework. Additionally, the tool
also helps to follow up on every one of the four to make another value bend, which is basic

9BLUE OCEAN FRAMEWORK OF STRATEGY
requirement to opening another blue sea marketing strategies (Kim and Mauborgne 2014.). The
matrix gives organizations four quick advantages where it helps in pushing the brand and at the
same time seeks the separation, which will help in easing out to sever the value cost exchange.
It instantly signals organizations that are centered just on raising and making, in this way
lifting the cost structure and regularly finished designing items and administrations – a typical
predicament for some organizations. It is effectively comprehended by managers at any level,
making a high level of engagement in its application (Mebert 2017). ERRC applied to Wilko
ELIMINATE
Focus on only retailing household and hardware
items.
Focus on only competition.
Outdate and un profitable policies
RAISE
Customer service standards.
After sales service.
Advertisement standards
REDUCE
Focus on only stationary products to compete
with specialised retailers.
Development cost of retail parks.
Unnecessary stock loss.
Daytime power consumption.
CREATE
Kiosk shopping in-store and external.
Allow franchises to gain more profits.
Customer involvement through self checkout
services.
Customer feedback Kiosk

10BLUE OCEAN FRAMEWORK OF STRATEGY
Conclusion
The fluctuating business sector presents proceeding with difficulties to the retailers. It is
getting to be noticeably difficult to catch all clients with one operation or a system; however they
are offered a wide decision of shopping encounters. In this way, the retailers should first
recognize the solid ramifications of another purchaser advertise, characterize their market space
and direct their qualities to explain the particular market issues, for example, making rivalry
immaterial.
Success, which has been changing as indicated by business sectors, level of rivalry,
innovation, customer states of mind and socioeconomics and so forth, will be contingent on the
level of retailer's understanding about the value addition, purchaser needs and desires. Along
these lines, so as to wind up noticeably a retail industry pioneer, Wilko needs to make another
market space by leaving the opposition, and concentrate on the purchaser needs, qualities and
desires.

11BLUE OCEAN FRAMEWORK OF STRATEGY
References
Agnihotri, A., 2016. Extending boundaries of Blue Ocean Strategy. Journal of Strategic
Marketing, 24(6), pp.519-528.
Amin, A. and Broadbent, D., 2015. Importance of Green Service Offerings for French, Dutch,
Swedish and UK Retailers in their Selection of Transport Operators: A study of French, Dutch,
Swedish and UK companies operating in the retail industry.
Burke, A., van Stel, A. and Thurik, R., 2016. Testing the Validity of Blue Ocean Strategy versus
Competitive Strategy: An Analysis of the Retail Industry. International Review of
Entrepreneurship, 14(2).
Corporate.wilko.com. (2017). Wilko | Corporate | Our History. [online] Available at:
http://corporate.wilko.com/stories/ourhistory.php [Accessed 14 Aug. 2017].
Fisch, J.E. and Wilkinson-Ryan, T., 2013. Why Do Retail Investors Make Costly Mistakes; An
Experiment on Mutual Fund Choice. U. Pa. L. Rev., 162, p.605.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Jones, P., Comfort, D. and Hillier, D., 2016. Materiality in corporate sustainability reporting
within UK retailing. Journal of Public Affairs, 16(1), pp.81-90.
Joshi, S., Saxena, S. and Tarkas, J., 2015. Analysis of the Innovative Strategies for Value
Creation in the Smartphone Market: A Case Study Approach Using Blue Ocean
Framework. SAMVAD, 8.
Kim, W.C. and Mauborgne, R., 2015. Blue Ocean Strategy (pp. 51-81). Boston, MA: Harvard
Business School Publishing Corporation.