Understanding Business Landscape : Kingfisher Plc

Understanding Business
Landscape

Table of Contents
1.0 INTRODUCTION.....................................................................................................................3
1.0 Background of the company.............................................................................................3
2.0 Current strategic planning................................................................................................4
3.0 The three stage approach..................................................................................................6
4.0 External assessment..........................................................................................................7
4.1 External factor Evaluation Matrix....................................................................................7
4.2 Competitive profile matrix...............................................................................................8
5.0 Internal assessment...........................................................................................................9
5.1 SWOT analysis.................................................................................................................9
5.2 Internal factor evaluation matrix....................................................................................10
6.0 Strategy formulation.......................................................................................................11
6.1 Alternative strategy........................................................................................................11
6.2 Porters five generic strategies.........................................................................................12
7.0 Strategic analysis and choices........................................................................................13
7.1 Quantitative strategic planning matrix (QSPM).............................................................13
8.0 Conclusion...............................................................................................................................13
9.0 References................................................................................................................................15

1.0 INTRODUCTION
In the present scenario, the company faces many difficulties and challenges to survive in
this competitive era. In the same way, the report is also gathered the competitive or business
landscape they need to conduct internal or external analysis in order to meet the requirements of
the market as well as the company. The report is also based upon the Kingfisher Plc which is one
of the top retail trading company in UK. Report will provide the strategic planning of the quoted
firm and three stage approach. Therefore, the report will be discussing the current strategic
planning with company's financial performance. Study also supported the critically analyse that
how company's strategic planning is effective or its impact on its performance as well. Further,
by using different theories and model, report will be analyses the alternative strategies which will
assist company for their better performance and growth.
1.0 Background of the company
Kingfisher Plc is one of the British Multinational retailing company whose headquarter is
in United Kingdom. The company is consider one of the largest home improvement retailer in
Europe and the third largest company in a world. Currently the company have more than 1300
stores in more than 9 countries. Further, the company is a third largest commercial property
developer in UK who have more than 1200 own buildings that varies from apartment to hotels.
The company provides home improvement products such as home appliances, tools, home
furnishing, hardware and garden supplies etc. at reasonable rates to their customers.

2.0 Current strategic planning
Kingfisher plc believes on the sustainability and also equitable growth that is helpful in
order to create the long term value for their stakeholders as well. For the same reason, The
company's announce the plan in 2016 such that this plan will leverage the scale of a business by
creating a integrated company in which the customers needs are always comes first. Thus it
creates positive impact upon the business performance such that it helps in the company's
progress as well.
The company strategic planning is also based upon the three key pillars such as creating
a unified, leading home improvement offers, driving the digital capabilities and then optimizing
the operational efficiency. As the company's main ambition is to become the leading home
improvement company and that is why it chooses best strategic plan as well.
Illustration 1: Kingfisher current performance
(Source: Kingfisher current performance, 2017)

As, The company provide the customers best technical solutions with good operational
support by best professional services and capabilities as possible. Kingfisher Plc focus on the
design, development and delivery of the IT system, solutions. To provide a broad range of
professional capabilities and support to customers that are necessary for the customers in order to
optimize company's operational success.
Illustration 2: Kingfisher Plc strategy
(Source: Strategic planning of Kingfisher PLC, 2018)

3.0 The three stage approach
Basically there are three stages in a strategic management process which are as
mentioned below:
Strategy formulation: In this stage, the organization establish its mission and objectives
and then chooses the best alternative strategies for better planning. The objective is to increase
the sales of the company up to 20%. And for this reason, the Kingfisher also uses situational
analysis as a market strategy in which the make market research so that it helps to identify
whether the strategy formulation is good for improving the business performance. Further, using
Illustration 3: Road map of Kingfisher PLC
(Source: Road map of Kingfisher PLC,Screenshot from 2019-04-17 14:14:36 2018)

situational analysis, the company also help to lower down the cost of the products offering and
help in trade off as well.
Strategy Implementation: It refers to the decision that are taken in order to install new
strategy or reinforcing the existing strategy. In this stage, the strategy is implemented by
analysing environment using SWOT and PESTLE. Thus, it helps to determine the effectiveness
of the strategy which is used by Kingfisher plc in its working area (Ravi, 2016).
Strategy Evaluation and Control: It is the final stage in the strategic management
where all the strategies are evaluated by using different key performance indicators such as
Benchmarking and Balance Scorecard. Therefore, proper controlling and monitoring should also
be done at regular basis in order to determine the outcomes and the price of the product offering
should also be lower in order to provide advantages to the customers.
4.0 External assessment
4.1 External factor Evaluation Matrix
To determine the external environmental of the company, PESTLE analysis is used for
Kingfisher Plc which is as mentioned below:
Political Factor: Kingfisher plc operating at global level and to achieve the success, it is
required to have political stability. Further, the company should require to make market research
in order to stablish its unit at new country, this is so because due to political instability the
company financial performance also drops (O'Reilly, J. E., 2016). On the other side, if
government of UK raise the tax rate then it creates negative impact upon the company's overall
performance. At that time, the firm has to make strategies to overcome this situation.
Economical factor: This factor also affect the business in both positive and negative way
such that this includes inflation rate and interest rate. If the economic condition of the country is
stable then it helps to create positive impact upon firm but on the other side, due to inflation rate,
the customers are not able to spend much on the products and this leads to affect Kingfisher plc
in negative way (Fozer and et.al.,2017).
Social Factor: Society's culture and the way of doing things creates impact upon the
environment of the company. Thus, Kingfisher has to understand the needs of customers and also
design the products as per their need.
Technological factor: It is quite essential for the firm to use all advance technologies
into the working area because it helps to minimize the cost. A firm should not only do

technological changes of a industry but it also increases the speed, because a slow speed will
give more time while fast speed of technological disruption provides time to cope and be
profitable as well. Thus, firm should adopt all new techniques (Team, 2018).
Legal factor: Kingfisher Plc should follow all the laws such that Company law,
employment act, Data protection act into the working area because it helps to create good
reputation in market. Further, a firm should also evaluate the legal factors carefully before
entering into market so that it helps to create better competitive advantages as well.
Environmental factor: This also affect the business such that different markets have
different norms or environmental standards which also impact upon the profitability of an
organization. Therefore, a firm should follow sustainability act and laws that also regulates the
environmental pollution. This will help to cope with such factor.
Opportunities Weight Rating
Ease of shopping 0.14 4
Internet shopping 0.14 4
Recovery of global market 0.12 3
Free trade 0.08 2
Threats Weight Rating
Local community critics 0.12 3
Technology making products 0.6 2
Regulation compliance 0.06 2
No Union 0.92 2
4.2 Competitive profile matrix
This is a strategic analysis tool which helps the company to compare its working with the
competitors in such a way that the company is able to identify the relative strengths and the
weaknesses. The major advantage of using the competitive profile matrix is that it allows the
company to rank itself against the competitors against some common factors. There are mainly
four components of the competitive profile matrix. These are as follows-

 Critical success factors- they refer to some key attributes which determines the success
of that company within the whole industry. It includes both internal and the external
factors and varies from the industry to industry. Some common success factors are like
marketing, quality, price, technology etc.
 Weighting- each and every critical success factor is weighted from 0.1 to 1.0. This is
done so because different factors affect the business success in different quantum.
 Score- after weighing all the success factors then the company assigns scores to each one
of the success factor to show how well the company is doing in respect of each factor.
After scoring the company needs to multiply the weight of each attribute by the score
given to each competitors.
 Total score- the final step to complete the CPM is to add values of all critical success
factors for each competitors. By doing this the company will give a total score for each
competitors.
5.0 Internal assessment
5.1 SWOT analysis
SWOT analysis is an analytical tool which helps the company to analyse its competitive
position in the environment (Foss and Saebi, eds., 2015). Kingfisher plc is a leading firm because
it continuously and carefully review its SWOT analysis from time to time.
Strengths
 The Kingfisher Plc has numerous the outlets in almost every state and country.
 It has a very low cost structure which helps the company in producing low cost products.
 It also has a strong and cordial relation with its suppliers and the dealers.
Weaknesses
 The current ratio of the company is very low which shows that company is not able to
meet its short term obligations.
 There is lack of financial planning.
Opportunities
 There has been a huge increase in the internet users which is an opportunity for
Kingfisher Plc to expand their presence online.
 The inflation rate is low and is expected to remain low which is an opportunity for the
company because the cost of inputs will remain low.

Threats
 More technological developments have lead to more competitors which is a great threat
for the company.
 The exchange rate keeps on fluctuating and this effects the company's sales in the
international markets.
5.2 Internal factor evaluation matrix
This is a matrix created by Fred R. David which is used as a tool for strategic
management and is a tool which is used to identify the key internal factors which affects the
business organisation. It is also used to study the impact of the internal factors on the business.
Internal factors which affects the business are the strengths and the weaknesses of the
organisation which may affect the efficiency, productivity and the profitability of the business
(Shenkar, Luo and Chi, 2014). Strengths are the traits or characteristics which improves the
productivity of the firm whereas weaknesses are the factors which hampers or stops the company
to grow. With help of internal factor evaluation a company can analyse its strengths and the
weaknesses and after the analysis the firm can take corrective measures and actions with it can
convert its weaknesses into the strengths of the company.
For creating and formulating the IFE matrix the Kingfisher Plc uses a process of a series
of steps which is as follows-
 Firstly the company will list its all the strengths and the weaknesses into a table format.
According to the matrix for best result the company should take 10- 20 strengths and
weaknesses.
 Next step is to match the characteristic with the appropriate weights that is ranging
between 0.00 to 1.00. The weight assigned indicates the relative importance of the above
listed factors. The factor whether a strength or weaknesses which have the greatest effect
on the organisational performance are assigned the highest weights.
 The company assigns 1 to 4 ratings which indicates
Rank Meaning
1 Major weaknesses
2 Minor weaknesses
3 Minor strengths

4 Major strength
 The ratings are based on the company whereas the weights assigned in the second step is
by industry as a whole.
 Next step is to multiply the weights by the ratings of the strengths and the weaknesses to
determine a weighted score of each factor.
 Last step is to total the weighted score of each factor.
6.0 Strategy formulation
Strategy formulation is defined as a process with help of which the company chooses the
best and most appropriate course of action out of a variety of options available to achieve the
organisational goals (Kristiansen and Rasmussen, 2014). It is one of the major steps in the
process of the strategic management. It allows the organisation to analyse and examine its
resources and provide for a financial plan and to establish a appropriate action plan to increase
efficiency and profitability.
The different types of strategies formulated by the Kingfisher Plc are as follows-
Unique and unified offer- with help of above internal and external assessment it is possible for
the company to know that the customer needs are more similar even across all the markets. So
the company is trying to deliver unifying offers with same products available everywhere.
Operational efficiency- the biggest opportunity for the company is to unify around 90 % of the
goods. This programme is a combination of cost savings and opportunity to work in a simpler
way.
6.1 Alternative strategy
These refers to some alternative strategies which are developed and formulated to set a
direction for the company to use if the strategy fails to achieve the pre determined objectives.
When we make a strategy it is not cent percent sure that the strategy formulated to apply is
successful in accomplishing the goals. So for minimising the risk of failure of the strategy the
company before handedly makes alternative strategies which can be used is the strategy earlier
adopted fails to accomplish the goals and objectives of the business.
The alternative strategy made by the Kingfisher Plc is as follows-
Driving the digital capability- this strategy consists of the two programmes-

Firstly investing in the core e-commerce platforms by leveraging the company's Screw fix best in
class capabilities.
The another programme is to build capability to provide to its customer with digital services that
helps the company with more stages in their home improvement projects (DaSilva and Trkman,
2014). This strategy also provides a significant opportunity with a stronger digital offer for the
customers which will substantially increase the sales of the company.
If the strategies adopted in the strategy formulation stage due to any reason fails or does
not become successful then the company must have a on time ready alternate strategy. This is
because of the reason that it takes a lot of time to formulate a strategy. Once the formulated
strategy applied then it takes a lot of time to develop the new strategy. Till this time the
competitors may take over the market base of Kingfisher plc (Carney and Jaskiewicz, 2015). So
if there is already available alternate strategy then it is very easy for the company to directly
implement and execute the available alternate strategy.
6.2 Porters five generic strategies
The Porter's generic strategies are a combination of different strategies which describes
how a company employs and uses competitive advantages across the chosen market. The
position of the firm within the whole industry determines that whether the company's
profitability is below the industry average or above the industry's average profitability. In the
year 1980 Michael Porter stated that the strategy is based on the either the cost leadership or the
differentiation strategy or the focus. These are known as Porter's generic strategy.
 Cost leadership strategy- by using this strategy the Kingfisher sets itself to become a
low cost producer in the whole industry. This may include the use of strategies like the
preferential access to raw materials, economies of scales etc. Being a low cost producer
the company is able to find and exploit and utilise all the sources and factors which leads
to cost reduction. The cost strategy is good and efficient for only big organisation
because they have an opportunity and option to have economies of scale and larger
production volume and also a big market share. The small scale business cannot be a cost
leader because their scale of business is very low.
 Differentiation strategy- this strategy helps the company in the development of the new
product or the services which offers unique characteristics and attributes which are more
valued by the customers and they prefer the products and the services over the

competitors products and the services (Sharma, Mithas and Kankanhalli, 2014). This
strategy is very appropriate in the case where the customer group is not very price
sensitive that is if the prices changes that is either increase or decrease in the prices does
not affect the customers.
 Focus strategy- this strategy focuses on the narrow segment and it tries to achieve either
the cost advantage or the differentiation strategy. The choice of the offering either the
low price or the differentiated product or the services totally depends on the needs and
requirements of the selected target market and all the resources available for the firm.
7.0 Strategic analysis and choices
The strategic analysis and choices are a part of the strategic management which
concentrates on analysing and evaluating the different types of the alternative strategies and to
determine the best strategy out of the group of different alternating strategies. With help of this
step the company is able to choose the best suited alternative course of action so that the
company can achieve its pre determined goals, objectives, mission and vision of the firm.
Strategic analysis is all about analysing the strengths, weaknesses, position of the firm in the
market, external factors impacting the organisation are taken into consideration.
The company's present strategies, missions, vision and objectives including the internal
audit and the external audit information provides and serves as a basis for the generating and
evaluation of the different feasible alternative strategies (Glova, Sabol and Vajda, 2014). These
alternative strategies help the company in moving the firm from its current position to the desired
future position.
7.1 Quantitative strategic planning matrix (QSPM)
The quantitative strategic planning matrix is a tool of strategic management which is used
to evaluate the different types of alternative strategies. It is a high level strategic management
approach for analysis and evaluation of the possible strategies. It is an analytical which is used
for the comparison of the different feasible alternatives. It is an approach which attempts to
select the best strategy using the input from other management techniques.
8.0 Conclusion
To survive in the dynamic and the cut throat competitive world it is very essential to
understand the business landscape. Understanding the business landscape means that analysing

the overall business and its environment to identify the indirect or the direct competitors. After
the whole report study it can be concluded that the good strategic planning is very necessary for
continuous growth and increase in profitability. It outlined both internal and external assessment
like SWOT analysis, internal factor evaluation (IFE) matrix for internal assessment and
competitive profile matrix and external factor evaluation (EFE) matrix for the external
assessment. Also, it gave knowledge about how to formulate the strategy and the alternative
strategies. Furthermore, it highlighted the process of the strategic analysis using the quantitative
strategic planning matrix (QSPM).

9.0 References
Books and journals
Carney, M. and Jaskiewicz, P., 2015. Six books that have shaped the landscape of family
business scholarship. Academy of Management Learning & Education. 14(3). pp.423-
429.
DaSilva, C.M. and Trkman, P., 2014. Business model: What it is and what it is not. Long range
planning. 47(6). pp.379-389.
Eisenberg, P., 2019. Financial Analysis of Primark Stores Ltd. With Regard to a Stock Exchange
Floatation (IPO). International Journal of Management.7(1). pp.91-112.
Foss, N.J. and Saebi, T. eds., 2015. Business model innovation: The organizational dimension.
OUP Oxford.
Fozer, D. and et.al.,2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS
process alternatives. Journal of cleaner productio. 147. pp.75-85.
Glova, J., Sabol, T. and Vajda, V., 2014. Business models for the internet of things
environment. Procedia Economics and Finance. 15. pp.1122-1129.
Kristiansen, P. and Rasmussen, R., 2014. Building a better business using the Lego serious play
method. John Wiley & Sons.
O'Reilly, J. E., 2016. The length of a pestle: A class exercise in measurement and statistical
analysis. Journal of Chemical Education.63(10). p.894.
Ravi, S. P., 2016. WHAT IS WRONG WITH INDIAN CORPORATE GOVERNANCE?: A
CASE STUDY OF FAILURE OF KINGFISHER AIRLINES. Business Studies
Journal. 8(2).
Sharma, R., Mithas, S. and Kankanhalli, A., 2014. Transforming decision-making processes: a
research agenda for understanding the impact of business analytics on organisations.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Team, F. M. E., 2018. PESTLE Analysis. Strategy Skills.