Business Strategy Report: Business Environment and Strategies

This report offers a detailed business strategy analysis, focusing on a shoe manufacturing company's mission, vision, and corporate objectives. It examines the company's year-by-year performance, including key decisions related to compensation, training, internet marketing, and facility investments. The report includes a thorough business environment analysis utilizing PESTLE and Porter's Five Forces models to assess political, economic, social, technological, legal, and environmental factors, as well as competitive dynamics. Furthermore, it applies McKinsey's 7S framework to evaluate the company's internal structure, strategy, systems, shared values, skills, style, and staff. A SWOT analysis is presented to identify the company's strengths, weaknesses, opportunities, and threats. The report concludes with a review of functional strategies, particularly marketing strategies, including product, place, promotion, and pricing, to gain competitive advantages in the footwear industry.

Business strategy

EXECUTIVE SUMMARY
Business strategies are set of plan and procedure that are used by business in order to attain its
objectives or enhance its overall profitability and market share. Several models such as pestle
and swot are used to conduct market analysis to know about existing trends and decide key
strategies that would be fruitful in gaining competitive advantages. Therefore this report has
covered mission, vision, corporate objectives, business environment analysis and functional
strategies that helped company in gaining competitive advantages.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
MAIN BODY..................................................................................................................................1
Mission, vision and values...........................................................................................................1
Corporate objectives....................................................................................................................1
Year by year evaluation...............................................................................................................1
Business environment analysis....................................................................................................2
SWOT Analysis...........................................................................................................................5
Functional strategies....................................................................................................................6
RECOMENDATION......................................................................................................................8
REFERENCES..............................................................................................................................10

MAIN BODY
Mission, vision and values
Mission-
To grow in dynamic market with best shoes design
Vision
To become world’s fair price footwear company
Values
We value each customer
Corporate objectives
To gain market share of 8% in shoe industry within 2 years.
Year by year evaluation
Week 11
Under this week the familiarisation with the game was maximised and the major decision
which were take was of compensation and training and to increase the base wages. All these
decision were assistive for the company in order to manage the working and operations of the
company. This is particularly because of the reason that when the good training is being provided
then this assists the company in getting more effective and efficient working and this assist
company in improving the overall performance. Further in addition to this another major
decision taken was of the internet marketing and under this they tried to experiment with help of
internet marketing and discovered a lot of new combinations of good performance. in addition to
this the bad decision was also made of buying the unnecessary new facilities as there was not
much demand and due to this new loan was also taken.
Week 12
The major type of discussion in this year was having a major focus of financial and cash
flow of the business. This also included the clearance of the previous loans and it also took the
new loan for 5 years of duration. Further the major decision taken in this was of involving the
branded production and they decided to produce the more pairs at the lower quality which
resulted in reduction in production material and the label cost. Further the company decided to
buy the two new facilities in Europe- Africa and the Latin America. This further resulted in the
increase in the production level of the company.
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Week 13
The major highlight in this year was that the business purchased the new facility which
extended the business in and purchased the new equipment in LA and EA and also purchased an
additional space in order to produce the 1000 pair of shoes. the major decision taken in this year
was buying the equipment which in turn increased the working efficiency of the company and
further increased the working efficiency of the employees and the overall company. Another
major decision made was to use the wholesale marketing and the internet marketing. This
decision resulted in the better coverage of the market in order to promote the product and
services of the company.
Week 14
The major highlight of the year was that there was a cut of all the bonus of the workers
which affected their productivity. This resulted in negative manner as when the bonus was
reduced then this will de-motivate the employees and they will not work in effective manner.
Another decision taken was the private label production wherein the contract is being accepted
by the consumers and retailers and profit has been generated from it. Further another major
decision taken is of the celebrity endorsement wherein the 3 celebrities assisted in improving the
image of the company among the consumers by advertising the brands. Thus, this will have a
good impact as this will attract majority of the consumer and this will increase the operations of
the company.
Business environment analysis
Macro- Environment- PESTLE Analysis
 Political factors: this factor illustrate extent till which government participate within
investment within shoe manufacturing company (Chaouk, Pagliari and Moxon, 2020). It
includes trade policies, trade barriers, tax policy, labour law, export tariffs, environment laws
and many more. From the simulation results it has been identified that shoe manufacturing
company has not been influenced by these factors at all the four main reasons that are: North
America, Europe Africa, Asia pacific, and Latin America market.
 Economic factors: it shows how business operate, decision that would be taken by analysing
economic growth, interest rates, exchange rates and the inflation rate. Simulation results
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helps in explaining exchange rate affects cost of exporting products as well as price of
importing products. From year 11 to 17 wholesale rate of products did not fluctuate much.
 Social Factors: Shoe manufacturer company was not involved in any kind of charity or CSR
activities in year 11. From year 13 they started investing in ethics training, they started
investing in child care in Year 12
 Technological factors: Shoe manufacturer company know importance of technology and
have focused upon investing on technology for example from year 11 to year 17 they have
invested in Search Engine advertisement at all the four locations
 Legal factors: these are different kinds of laws that can impact overall business of an
organization as it helps in defining boundaries of a company.
 Environmental factors: they have focused upon reducing their overall wastage by adopting
TQM or Six Sigma so that overall waste production can be reduced.
Competitive environment-Porters five force
There are various kinds of models that can be used for evaluating competitive environment. One
of them is Porters five force model (Liu, Zhu and Zhang, 2018). This model will be used to
evaluate competitive environment of Shoe manufacturing company.
 Threat of substitutes: Threat of substitute product for this is high and in order to reduce
impact of this factor they provide rebate offer to customers per pair of shoes. This rebate
offer does not vary much from year 11 to year 17. Rebate offer helps them in reducing
changes of return or exchange on products.
 Threat of new entrants: Threat of this factor is low because entering into this industry
require high value of investment due to which it becomes difficult for them to enter into this
industry for establishing business.
 Bargaining power of buyers: Threat of this factor is high because there are various
competitors who can provide high quality of products at lower price. In order to reduce threat
of this factor they invest more on brad advertising that has only increased from year 11 to
Year 17 from $7,500 to $13,958 due to threat of this factor. In order to further attract
customers they try to maintain TQM and Six Sigma strategies so that overall quality of
products can be maintained further they offer Rebate offer to customers in order to retain
their customers.
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 Bargaining power of suppliers: it is a low factor as number of suppliers in this industry are
increasing so its threats for company reduces. But due to increasing number of suppliers they
developed a supplier code of conduct from year 14 so that its negative impact can be
reduced.
 Competition among existing companies: Competition in this industry is extremely high.
Threat of this factor is also high. Their S/Q rating lies between 4 to 6 from at all the four
regions that clearly explains that competition of shoe manufacturer is high. In order to reduce
threat of this factor, they focus upon enhancing their overall product quality though TQM,
Six Sigma. They have focused upon reducing their delivery time period. They have further
focused upon continuously reducing their overall time period for delivery from 3 weeks to 2
weeks from year 11 to year 17.
Micro environment-McKinsey’s 7S framework
There are various kinds of micro environment analysis tools (Petitprez and et. al., 2018).
One of them is McKinsey’s 7S framework that has three hard and four soft elements. It is a
thematic framework that can be used for analysing Shoe company simulation results
 Strategy: This explains strategy developed by organization for gaining competitive
advantage. In order to gain competitive advantage they are focusing upon investing in brand
adverting in order to increase awareness about brand, enhancing overall quality of product,
focusing upon reducing delivery time period, providing rebel offer to attract more customers.
 Structure: Organization has divided their all operation in four regions that are: North
America, Europe Africa, Asia pacific, and Latin America market. All of their operations are
divided into these four regions. They also focus upon providing training to employees to gain
competitive advantage.
 System: It includes daily activities and procedure that staff members go though. Show
manufacturing company focus upon adverting, manufacturing, production, packaging,
marketing, transportation etc.
 Shared value: these are core values of the organization. Core value of this organization to
sustain within global competitive environment by increasing brand awareness and
manufacturing high quality shoes products. In order to sustain and maintain their competitive
advantage their provide Rebel offer to customers as well.
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 Skill: they have adopted transformational leadership style. This can be said that they focus
upon motivating their employees by providing them incentives and many other kinds of
benefits. They focus upon involving all of their employees in this decision making.
 Style: in order to enhance overall skills of workers they focus upon training of their
employees. Training helps employees in enhancing their current knowledge and skills. This
helps them in increasing overall production skill of employees and provides them with
competitive advantage.
 Staff: in order to motivate employees along with basic wadges, incentives, Fringe Benefits,
and best practises pay are provided to employees. All the employees are trained from time to
time for enhancing overall production capacity.
SWOT Analysis
It is a model which helps in finding out internal factors that is impacting on growth of
company. The factor exists within business and is easily controlled. Likewise, shoes
manufacturing company. SWOT analysis is as follows
Strength
 The company is having a strong brand image in market and at global level.
 It manufacture high quality shoes for both men and women at cheap price.
Weakness
 There are already many shoe brand which also offers high quality shoes so, it is giving
tough competition to shoes manufacturing company in market
 Company has not been able to capture large market due to ineffective marketing and lack of
awareness of shoe brand (Kitsios and Kamariotou, 2017).
Opportunity
 They can utilise technology in doing marketing on social media platforms. this will help in
attracting large number of customers and increasing sales and revenue
 Shoes manufacturing company can enter in emerging market where there is vast opportunity
for growth. It will enable in competing with other brands and sustaining in market for long
term.
Threats
 Due to covid 19 there has been high decline in GDP of many countries. So, it may take a
long time for shoes manufacturing company to recover from it.
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 Many new entrants can enter in market and give stiff competition to firm.
Functional strategies
Marketing
It is necessary to develop an effective marketing strategy so that shoes manufacturing company
is able to promote products in market. Also, it provide insight that what is to be done,
how, etc. thus, strategy consists of 4 P’s that is as follows
Product- This P refers to the products which are being sold by company in market. Here, shoes
manufacturing company products are shoes of various types such as sports, casual, formal,
etc. also, they produce shoes for men, women and kids (Wahyuni, Fahada and Atmaja,
2019).
Place- The P refers to place where organization products are available in market. Shoes
manufacturing company has stores in all countries of north America, Europe, Africa, etc.
Also, it provides shoes online as well. Thus Shoes manufacture company make product
according to taste and preference of people prevailing in the environment (de Oliveira and
et.al., 2017). Organisation focuses on quality of product so as to maintain the name of the
brand.
Price - It refer to pricing strategy that is followed by firm in market. It is found that shoes
manufacturing company is selling shoes at competitive pricing strategy. In this company has
reducing cost of their products. It has enabled in selling more goods. Company also focuses
on price, providing best quality at reasonable rate to overcome the competitors in the
market. As pricing play a major role in attracting the good deals from the market.
Promotion - It is an important P in market mix. This refers to way of promotion that is used to
advertise products and services. Thus, there are various promotional strategies is being used
by shoe manufacturing company. They do internet marketing which has led to attracting
more customers (Bentley-Goode, Omer and Twedt, 2019). Besides that, they do digital
marketing but only one limited social sites that is Facebook. Company tries to promote it
products true different channels of market Such as; wholesaler, retailer, storekeeper.
Company open its store on the prime location to make its products easily available in the
market.
Company follows different marketing mix strategies in different region of the globe store as
to adapt the changes which are prevailed in the environment. Following of different marketing
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mix strategy is just because people and conditions vary from boundary to boundary of the globe
(Ike, 2017). Marketing strategies are framed while keeping government policies and competitors
in the mind. Firm always study the local market which is being run as small private company of
shoe.
Operations: It refers to production of shoes in order to fulfil market demand. Thus, here shoes
manufacturing company have managed their production with help of TQM. This has enabled in
maintaining quality of shoes but not optimizing cost. Moreover, team decision on using TQM
was supporting as they said that using TQM will help in reducing cost. It will help in gaining
customer satisfaction as well as company manufacture shoes according to the demand of the
market (Weinrich, 2017). As weather changes from time to time in many parts of the globe and
these need changes are need to be fulfilled by changing the product design as studied by the
marketer. Firm provide better quality product at good price so as to capture the market from the
competitors. Company always get updated to new technology and design so as to increase the
sales volume. This updating in the technology and design gives an competitive advantage to the
product and in the brand name. Organisation uses its resources in a way where more quality of
product can be obtained at low cost and with no wastage.
Supply chain management: Shoes manufacturing company always distribute its product
through a proper channel of management which is being previously decided while framing the
supply chain. Distributing of product from manufacturer to customer is done through a
systematic channel or modes. Company installs its manufacturing unit at different parts of globe
so as to reach the demand of the market. This installing of manufacturing unit provides the price
advantage to gain in the market and which is capable to fight with the competitors (Chelliah and
Swamy, 2018). A manufacturing of unit of the company can supply its product at nearby places
at reasonable price. This also helps in reaching the customer demand in the limited period of
time. Every company goes through a supply chain: manufacturer, supplier, Wholesaler, retailer
in the market. Company has set price of the product according to the pocket of the people
prevailing in the market. Price of the product maybe from country to country in the world.
Corporate social responsibilities: Company always follow rules to maintain the social
responsibility by avoiding wastage of resources in the environment so that maximum value can
be delivered to end customers. Organisation promotes its name by fulfilling the social
responsibility in the market or maximise customers requirements. Shoe manufacturing also
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provide dividends and profits to the stakeholder in order to achieve the growth and expansion
(Balashova and et.al., 2018). When the stakeholders of the company are happy they invest more
in the growth of the company to gain higher profit from the market. Shoes manufacturing
company social responsibility is to get best out of the resources which are used in to make the
finished product from the raw material. Stakeholder and social responsibility helps in promoting
the name of brand more in the market in order to achieve the goal of the company.
Finance: Funds are required by each and every enterprise to start and operate its business
operation in order to meet several expense and perform activities so that end objectives can be
achieved. There are two major sources from which capital can be raised that is debt and equity
such as in debt company need to pay certain amount of profit as dividend to debenture holder
while in equity there is no such repayment obligation. At same time debt does not required
portion of ownership of business so shoe manufacturing company has planned to choose debt
option in order to raise fund for meeting its expenses. Company have pay dividend to its holders
that helps in meeting shareholders expectancy as they are also interested in grow of firm as they
have invested capital in organisation (Habib and Hasan, 2017). Yes, different profitability target
has been set by for different market or region so that effective strategies can be planned to meet
them for benefit of organisation. Information technology is used to collect and gathered accurate
information regarding the market condition, preferences or income of individuals to set profit
margin. Therefore, innovative technology has contribute in setting appropriate profit margin that
company can enjoyed by delivering products at specific cost to customers.
Overall performance reviews against investor expectation
It can be stated that overall performance of shoe manufacturing company was as per
expectancy of investors by year on year such as company have decided to increase compensation
and provide proper training to employees that helped in enhancing motivation of employees.
Thus, all such contributed in achievement of goals. Like in week 13 organisation is able to
effectively expand its business operation by meeting expectancy of customers by promoting
products and services through digital technologies. Therefore, overall year by year performance
of shoes manufacturing company has increased in external environment.
RECOMENDATION
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It can be suggested from above analysis that Shoe manufacturing company need to make
more use of digital technologies to market its products and services to millions of customers in
limited time. It should also take steps towards sustainable management of resources so that
maximum value can be delivered to end customers at minimum price possible. At last it would
be suggested that manager of Shoe manufacturing company can make use of information
technology to collect accurate data, fact and figure of external market in order to make correct
decision for growth and sustainability of firm.
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REFERENCES
Books and Journals
Balashova, K.V and et.al., 2018. Formalization and elaboration of a company’s business
strategy. Problems and perspectives in management, (16, Iss. 3). pp.80-91.
Bentley-Goode, K.A., Omer, T. C. and Twedt, B. J., 2019. Does business strategy impact a
firm’s information environment?. Journal of Accounting, Auditing & Finance, 34(4),
pp.563-587.
Chaouk, M., Pagliari, R. and Moxon, R., 2020. The impact of national macro-environment
exogenous variables on airport efficiency. Journal of Air Transport Management. 82.
p.101740.
Chelliah, J. and Swamy, Y., 2018. Deception and lies in business strategy. Journal of Business
Strategy.
de Oliveira, M. C and et.al., 2017. Is sustainability in business strategy factual or
figurative?. Race: revista de administração, contabilidade e economia, 16(2). pp.427-
454.
Habib, A. and Hasan, M. M., 2017. Business strategy, overvalued equities, and stock price crash
risk. Research in International Business and Finance, 39, pp.389-405.
Ike, L., 2017. Business Strategy. Xlibris Corporation.
Kitsios, F. and Kamariotou, M., 2017. Enterprise architecture management for business strategy
modelling. no. September, 25.
Liu, J., Zhu, J. and Zhang, J., 2018. A DEA-based approach for competitive environment
analysis in global operations strategies. International Journal of Production
Economics. 203. pp.110-123.
Petitprez, F., and et. al., 2018. Transcriptomic analysis of the tumor microenvironment to guide
prognosis and immunotherapies. Cancer Immunology, Immunotherapy. 67(6). pp.981-
988.
Wahyuni, L., Fahada, R. and Atmaja, B., 2019. The Effect of Business Strategy, Leverage,
Profitability and Sales Growth on Tax Avoidance. Indonesian Management and
Accounting Research, 16(2). pp.66-80.
Weinrich, T., 2017. Reviewing organizational design components for digital business
strategy. BLED.
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