Strategic Decision Making at ASOS PLC: A Fashion Industry Analysis

This report provides a strategic analysis of ASOS PLC, a prominent online fashion retailer, examining its operations within the fashion industry. It begins with an introduction to strategic decision-making and its application to ASOS PLC, followed by a detailed stakeholder analysis, identifying key groups such as suppliers, buyers, customers, shareholders, lenders, and government agencies and their respective roles. The report then applies SWOT analysis to assess ASOS PLC's internal strengths and weaknesses, alongside external opportunities and threats, highlighting its brand image and supply chain operations, as well as areas for improvement. Furthermore, it utilizes Porter's Five Forces model to evaluate the competitive dynamics of the fashion industry, focusing on the threats of substitute products, new entrants, bargaining power of buyers and suppliers, and rivalry among existing firms. The report concludes with recommendations for improvement based on the analyses, offering a comprehensive overview of ASOS PLC's strategic position and the factors influencing its performance.

Strategy and Decision
Making

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Stakeholder of company..............................................................................................................1
SWOT analysis............................................................................................................................3
Porter’s Five Forces Model.........................................................................................................4
Measure to Improve.....................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic decision making refers to process in which organisation identify long term vision as
well as long-term goals for organisation (Al Moussawi, Fardoun and Louahlia-Gualous, 2016).
These helps company to use various tools that helps to analysation of various factors which
create negative impact on working, profitability as well we market share of company. This
project report includes study of fashion industry in which there are various fashionable clothing
are providing by companies and attracts young customers. This project report include study of
ASOS plc is k based online retailing company which is providing fashion and cosmetic to their
customers. Company established in the year 2000 by Nick Robertson. This project discusses
values different stakeholder of company which include suppliers, buyers, customers, government
agencies, lenders and shareholders. It includes assessment tool like SWO analysis which include
identification of strength and weakness to overcome of opportunity as well as threat and porter’s
five forces model which include discussion of various factors including competition within
industry power of supplier and customers, entry of new firm. It also includes measurement of
improvement on basis of analysis of different parts of industry.
MAIN BODY
Stakeholder of company
Stakeholder’s analysis refers to a process for identification of people before starting of project
and group them for participation, influence as well as interest of project which determine way in
which involve as well as communicating different stakeholders (Aliasghari, Mohammadi, Ivatloo
and Abapour, 2020). The stakeholder group include shareholder, customers, competitors,
government agency, suppliers and other parties who has interest as well as power to affect
operation of enterprise. ASOS company also conduct stakeholder analysis as it includes helps
organisation, identify conflict in early stage, allow company to align with stakeholder for goals
of company. Stakeholder of ASOS plc are as follows:
 Suppliers: Suppliers refers to those people who sell raw material to business and depend
on organisation for earning profit by selling their products to company (Ocampo,
Deiparine and Go, 2020). There suppliers are providing necessary things like material as
well as factor of products to company which are important for operating business.
Relation with suppliers is one of important aspect for company and is related to survival
1

for business. It is important for enterprise to build good relation with company which is
required to smooth running of business. ASOS Plc has various suppliers in market which
helps them to follow pat of growth and success as suppliers of company are providing
good quality material to their customers.
 Buyers: Reason behind existence of any company is satisfying needs as well as wants of
their customers. Enterprise is putting efforts in order to convincing their customers and
for earing profit by selling their products to their customers (Berman and Dalzell-Payne,
2018). Focus of any organisation is providing best quality products as well as service to
their customers at prices which generate demand for products of company in market. If
organisation fails to provide good quality products to their customers, it results in loss for
company. ASOS Plc is one of organisation which are focusing on increase experience of
their customers by providing high quality products to their customers.
 Customers: Customers are those who buy products of company and work as
intermediaries in industry. These intermediaries include retailer, wholesaler, general store
and many more. ASOS is not depending intermediaries as they are directly providing
their products to end consumers.
 Shareholders: Shareholder are those people of company which are not only investor but
also own share of enterprise. In this way, shareholders are actual owner of any
organisation and has power of affect operation of company. Shareholder get return on
amount they have invested in company. Enterprise earn profit provide benefit for their
shareholder and also generate wealth for them. ASOS Plc is providing sufficient return to
shareholders which helps to build good relation with shareholders.
 Lenders: Lenders are those who provide funds to company for conducting their
operation in smooth manner. These funds are utilised by organisation for expansion of
their business (Gabler, Landers and Reynolds, 2017). But these leaders create burden of
interest for firm as they need to provide interest on amount, they borrowed from different
leaders. ASOS company is raising funds for their operation form different leaders which
helps them for smooth running of their business.
 Government Agencies: Government agency are those which create impact on business
as the has power for formulating different rules or make changes in existing rules and
2

regulation. ASOS plc is following all riels and regulation developed by government
which create positive image of company in minds of their consumers.
SWOT analysis
SWOT analysis is strategic tool used by organisation for identification of strength, opportunity,
threat and weakness of company (Garg and Eisenhardt, 2017). This analysis is used for decision
making in company and also allow to identify various internal as well as external factors which
analyse which fact is favourable for enterprise and which are not. SWOT analysis of ASOS Plc
helps company to identify strength and take advantage of opportunity in market and
identification for weakness to overcome of threat occur for company in market. SWOT analysis
of AOSOS plc is mentioned below:
Strength:
 ASOS Plc has strong brand image in market as company has partnered with LGBT
Community’s voice that is GLAAD. Organisation is also emphasis on their corporate
responsibility which create good image of company in minds of their customer.
 ASOS Plc has various design as it focused with their customers to help them find best fit.
Company is providing around 30size and also providing all types of size for same price.
Organisation take different fashionable products from varying brand and combine them
with company’s own brand.
 ASOS plc has unique view to understand and implementing supply chain operation.
Company is planning for local expansion and investment on their supply chain.
Weakness
 ASOS Plc is investing below on research and development and this does not allow
company to compete in terms of innovation. Company enter into market as mature firm
which bring their products on their websites (Hu, Leopold-Wildburger and Strohhecker,
2017).
 Company is offering shipping of their products to different parts of world to access to
international market and international buyers. But its global business increase cost burden
on organisation. Free shipping policy of company decrease gross margin of company.
 ASOS Plc require to invest in innovative technology as it helps company to improve their
customer experience. Organisation also require to maximise use of data analytics which
3

helps them to improve their sales growth. For expansion of operation of organisation
need to more invest on different technology.
Opportunity:
 There is new trend in different industry including fashion industry which result in
changing in buying behaviour of customers. These changing behaviour results in op up
new various new market for ASOS Plc. Company is offering diversifying products in
market which helps them to satisfying needs of consumer (Ionescu, 2016).
 ASOS Plc is increasing their marketing efforts in order to increase traffic of customer
base. Company is using real time data which is access form social media, websites and
blog and also using insights for pricing and marketing decision which helps them for
improvement of customer base.
 ASOS plc can expand their operation in different way like by expanding range of
products, expansion in different categories and expansion with increase numbers of
brands. Core business of company is fashion but it is expanded to beauty products.
Threat:
 There is increase competition in fashion industry as there are many market players
providing their service in this field. Company need to work on their position as well as
USP of company to overcome for competition in market.
 Brexit is another problem for company as due to this skilled labour need to move form
company which create impact on their efficiency. Also, political as well as economic
factor create impact on business of ASOS Plc.
Porter’s Five Forces Model
Porter’s five forces model is one of tool which provide understanding of competitiveness of
business environment and also identify profitability of strategy (Kaul, 2019). This is one of
analysis model for business which is introduced by Michel porter in the year 1980 which is used
for analysation of industry as well as competitors. This model is used by companies for
assessment of company’s structure and corporate strategy. ASOS plc is operating their business
in fashion industry and to increase their market share they need pt understand strategy of other
market player operating in this industry. There are various factors which include competition
within industry, power of suppliers and buyers, threat of entry and substitute products. Porter’s
five forces model in context of ASOS plc are mentioned below:
4

Threat of substitute products: There is availability of substitute products within industry which
make competitive environment more challenging for ASOS Plc. These threat for substitute
product includes availability of cheap products in market. Switching cost for customers to switch
to another products is very low. Substitute product of ASOS company are of superior quality and
providing competitive performance. Threat of substitute for ASOS plc is low when stitching
cost is high and substitute product is not providing same performance as well as quality to
consumer. Company can overcome these factors by emphasising that how organisation is
providing better products than substitute. Company also need to focus on loyalty by providing
them better experience and also need to focus on differentiation (Laureiro‐Martínez and Brusoni,
2018).
Threat of new entry: Threat of new entry reflect in which way entrant create impact on existing
organisations within industry. If industry in which company is operating is profitable, then there
is low barrier on firm to enter in industry. While entering within industry, enterprise require
substantial capital and investment for resources. If differentiation of products of ASOS Plc is
high and customers of company is imposing on high values for unique as well as special
experience then threat of new entry for company is low when new companies are entering into
market. New entrance required to follow strict time, regular demand which discourage new
entrant within industry. So, it is important for ASOS Plc to generate brand loyalty as well as
customer relationship among target market.
Bargaining Power of Buyers: Bargaining power of consumers create pressure on organisation
to provide quality products to their customers at affordable prices. There are some factors which
contribute to increasing bargaining power of customers including concentrated customers base
which create impact on ASOS plc. If there are less numbers of customer present in organisation,
it increases bargaining power of customers of company. Low switching cost for customers as
well as price sensitivity increase power of buyer in market. To overcome of issues of bargaining
power of customers, company need to diversify their customers as well as market base. This can
be done through introduction of new and innovative products in market, new target market and
adoption of different diversification techniques (Maritan and Lee, 2017).
Bargaining power of Suppliers: Supplier’s bargaining power is resulted from pressure of
suppliers by reducing availability of products, reducing quality and increasing products. If
supplier of company has high bargaining power, it results in increase competition and decrease
5

growth as well as profitability of ASOS Plc. If suppliers have less bargaining power than it
results in increase profitability as well as attractiveness within industry. Supplier’s bargaining
power is higher for company if supplier is only focused on particular area. This threat creates
more impact on business if switching cost for ASSOS Plc is high as it increases their total cost.
Power of suppliers within industry are higher if there are less numbers of suppliers. If any
organisation does not have market knowledge and has limited data for price of these suppliers,
then it increase position of suppliers (Rossi, 2016).
Rivalry within existing firm: ASOS plc is facing competition in market as there are various
market players providing their products and service within fashion industry (Mei and Xie, 2019).
This competition creates negative impact on prfotialbility as well as growth of industry. If there
are less numbers of competitors within industry, then rivalry within enterprise is low. In growing
industry, there are less competition which make that industry more attractive. There are various
factors which decrease rivalry in industry including high switching coast, market leader,
differentiated products and service. There is high rivalry within industry if different market
player is offering differentiation but targeting same products for selling their products and
service.
Measure to Improve
From above mentioned project report, it can be recommended to ASOS plc to assess business
environment and industry in which they are preparing as it allows them to identify various
factors that can create negative impact on business. To overcome of these factors business is
suggest to build good relation with their customers. This relationship between company and
customers can be improve by understanding changing needs of customers and satisfying them in
effective manner. Enterprise can interact with their customers by actively involve in promotional
activities. There is various mode of promotion which helps ASOS Plc to communicate their
message to their customers.
It is also suggested to ASOS company to offer differentiation in organisation as there is increase
competition within industry in which organisation is providing their good and service. Company
can differentiate their products in theirs of prices, quality, uniqueness, feature, colours and many
more ways. For differentiation in market, organisation need to invest on research and
development activity which helps to bring innovation and differentiation in enterprise and
products and service offered by company. ASOS Plc also recommended to emphasis on social
6

media marketing as it helps them to increase awareness of their products. Company is also
required to develop new ways to reduce cost of company as company is facing burden of cost
due to free shipping in different parts of world.
CONCLUSION
From above mentioned project report, it can be concluded that strategies are developed by
organisation which helps them to overcome of problems faced by company. These strategies of
company help organisation for decision making and planning for different activities of business.
There is different tool used by company which helps in identification of factors which create
impact on their organisation. Company conduct stakeholder’s analysis which helps to identify
group of people who has power to influence business and their profitability and also has interest
in business. These stakeholders include shareholders, competitor, customers, suppliers and
employees. There is some other tool in business which like SWOT analysis which helps to
identify strength and weakness, opportunity as well as threat within business which provide
opportunity to overcome of problems and issues occur in business. Organisation also use porter’s
five forces model which helps to analyses competitiveness in market as well as industry
environment. These five forces include threat of substitute, bargaining power of buyer and
suppliers, competition within industry and threat form entry of new firm. Al these factors create
impact on profitability and market share of industry which helps company to analyse compete
strategies of market player within industry.
7

REFERENCES
Books and Journals
Al Moussawi, H., Fardoun, F. and Louahlia-Gualous, H., 2016. Review of tri-generation
technologies: Design evaluation, optimization, decision-making, and selection
approach. Energy Conversion and Management, 120, pp.157-196.
Aliasghari, P., Mohammadi-Ivatloo, B. and Abapour, M., 2020. Risk-based scheduling strategy
for electric vehicle aggregator using hybrid Stochastic/IGDT approach. Journal of
Cleaner Production, 248, p.119270.
Berman, S. and Dalzell-Payne, P., 2018. The interaction of strategy and technology in an era of
business re-invention. Strategy & Leadership.
Gabler, C.B., Landers, V.M. and Reynolds, K.E., 2017. Purchase decision regret: Negative
consequences of the Steadily Increasing Discount strategy. Journal of Business
Research, 76, pp.201-208.
Garg, S. and Eisenhardt, K.M., 2017. Unpacking the CEO–board relationship: How strategy
making happens in entrepreneurial firms. Academy of Management Journal, 60(5),
pp.1828-1858.
Hu, B., Leopold-Wildburger, U. and Strohhecker, J., 2017. Strategy map concepts in a balanced
scorecard cockpit improve performance. European Journal of Operational
Research, 258(2), pp.664-676.
Ionescu, L., 2016. Has China’s Anti-corruption Strategy Reduced Corruption or Purged Political
Rivals?. Contemporary Readings in Law and Social Justice, 8(1), pp.245-251.
Kaul, A., 2019. Culture vs strategy: which to precede, which to align?. Journal of Strategy and
Management.
Laureiro‐Martínez, D. and Brusoni, S., 2018. Cognitive flexibility and adaptive decision‐making:
Evidence from a laboratory study of expert decision makers. Strategic Management
Journal, 39(4), pp.1031-1058.
Maritan, C.A. and Lee, G.K., 2017. Resource allocation and strategy.
Mei, Y. and Xie, K., 2019. An improved TOPSIS method for metro station evacuation strategy
selection in interval type-2 fuzzy environment. Cluster Computing, 22(2), pp.2781-
2792.
Ocampo, L., Deiparine, C.B. and Go, A.L., 2020. Mapping Strategy to Best Practices for
Sustainable Food Manufacturing Using Fuzzy DEMATEL-ANP-TOPSIS. Engineering
Management Journal, 32(2), pp.130-150.
Rossi, F.M., 2016. Conceptualizing strategy making in a historical and collective perspective.
In Social Movement Dynamics (pp. 15-42). Routledge.
8