Fit and Fashion: Global Expansion Strategy and Competitive Advantage

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Business Strategy
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Table of Contents
Introduction......................................................................................................................................3
Vision-Mission Statement along with Corporate Objective............................................................4
Situational Analysis.........................................................................................................................5
Internal Analysis..............................................................................................................................8
Marketing strategy implementation:................................................................................................9
Analysis of performance:...............................................................................................................11
Corporate social responsibility:.....................................................................................................13
Recommendations:........................................................................................................................14
References:....................................................................................................................................16
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Introduction
Fit and fashion is the organisation engaged in manufacturing and selling of footwear globally,
especially athletic footwear for the people of all the ages. There is strong competition amongst
the industry faced by our company as there are many companies engaged in manufacturing and
selling of athletic footwear. Our company wants to gain a competitive edge in the different
regions of the world namely North America, Europe-Africa, Asia-Pacific and Latin America.
Our company is having factories for the production of footwear and meet the needs of customers
around the world. Our factories are situated in Asia and North America from where the footwear
is sent wherever required. Our company is also planning to develop online selling and the
wholesale market for footwear. For this, we will be making different strategies that will enable
and help our company to develop. Analysis has been made by us and the result states that there is
a positive response on the long term growth of athletic footwear as more individuals are having
interest in participating and playing sports. After the analysis was done by us of the financial
statements, it can be seen that the company is showing an increasing trend in the sale of footwear
and there is a lot of scopes for our company to grow in the coming period as the company is not
that well developed in Asia-Pacific and Europe region. Our company was also engaged in the
private label segment but the same was not successful for the company thus business strategies
will not be made based on the same.
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Vision-Mission Statement along with Corporate Objective
The vision of our business is to become the market leader in providing the unique athletic
footwear which will help in performance improvement of the person wearing such footwear in
four regions globally including North America, Europe-Africa, Asia-Pacific, and Latin America.
Our company desires to achieve the vision made by developing high-quality shoe models which
provide with desirable improved performance along with providing with the enhanced features,
latest designs and different colors which attract customers to buy the quality product. Our
company will develop different control strategies which focus on the quality control in the
production department to achieve the vision along with maintaining a sustainable work
environment which helps in bringing best efforts of employees in every shoe made. The mission
of our company will be to reduce or lower the use of non-renewable materials and optimizing
end-of-life outcomes. The overall objective as a strategist of the company is to make a strategy
for the business which helps in attaining the competitive advantage in the industry globally.
Also, the objective of our firm is to produce a good overall performance thus competing
successfully in the industry with the other competitors. There is a differentiation in the business
strategy of our company which focuses on the careful shifting of a company's competitive
advantage. Also, strategies and plans relating to various management models which could be
applied to achieve the overall objective of our company will be included in the vision and
mission of our company.
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Situational Analysis
Macroeconomic analysis is an overall analysis of the environment which affects our company
and the strategies for the company is made by us accordingly. There are different ways of
conducting environmental scanning for making decisions and strategies for our company. Some
of them are as follows:
PESTLE Analysis- Pestle analysis for our company has been done to analyse and monitor the
macroeconomic factors of our environment which could affect the strategies and performance of
our company. PESTLE Analysis includes analysis of factors including political, legal, economic,
social, environmental and technological factors. Political and legal analysis of our company
indicates that the same is in favor of our company as the policies of the government supports
globalisation thus making it favorable for our company (Woodruff, 2019). Also, our company is
planning for adopting new technologies by conducting an analysis of the available technologies
which will help in the improvement of production for our company. Issues relating to employees
are also considered by our company and strategy is determined which leads to satisfaction of
employees thus providing greater efficiency. Legal and economic conditions are also analysed so
that our company can keep track of financial issues and issues related to inflation in the global
market.
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Figure: PESTLE Analysis
Source- By Author, 2019
Also for formulating the strategy for attainment of sustainable success of our company analysis
is to be made for the business life cycle of our company which focuses on the procurement of
raw material to the selling of shoes by our company. Any change in the business cycle which
benefits the company has to be made by us to help to gain competitive advantage. Analysis
relating to exchange rates and setting up of manufacturing factories will be done and
implemented in the strategies made by us for our company.
Also, industry and sector analysis has to be done by us to implement the same in the strategies.
Porter’s Five Forces Model provides a sufficient platform for the industry in which we are
competing. The overall industry of shoe manufacturing has been very competitive and needs the
observation of all the five models for our company (cgma, 2019). Following results and analysis
of the models have been conducted:
Bargaining power of suppliers- Our Company kept a check on the price of the material and
adjustments were made accordingly. The focus was on taking advantage of cheap labor in
specific regions. Suppliers are to be approached accordingly.
Bargaining power of customers- Our strategy involves the creation of best product and selling
the same at the competitive prices in the market. We made sure that there was a customer
satisfaction with the provision of after-sales services by our company.
Threats of substitutes- As there is intense competition in the market and many industries are
engaged in the same business thus we should choose a strategy that will help in maintaining the
market share. Strategy relating to competitive pricing for private retailers is the reason that our
company is able to maintain its advantage over other competing firms.
The threat of new entrants- As all the new entrants in the business finds it easier and attractive to
get into the industry and is ready to keep the prices of the product low. Our company has kept the
cost of production low to reduce the price, also maintaining the S/Q rating hand in hand.
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New Entrants
Threats Substitute
Products
Threats
Competitive
Rivalry
Bargaining
Power of
Supplier
Bargaining
Power of
Customers
Competitive Rivalry- There is a lot of competition in the market but the other companies are not
following strategies as we are following. Our company has invested in advertising and retail
support to gain the loyalty of customers thus making a place in the market amongst the
competitors.
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Internal Analysis
The internal analysis will also be conducted to analyse the microeconomic factors which could
be helpful in strategy formulation or strategy implementation for our company. The internal
analysis consists of various techniques like value chain analysis, balanced scorecard, operational
management, etc. In Value Chain analysis we focus on the activities of our organisation and
distinguish between primary and support activities (Jurevicius, 2019). Strategies are made by us
based on the value chain analysis and operations management relating to internal activities of our
company from converting inputs into outputs. Also, the balanced scorecard is a method which
helps our firm to formulate strategies and helps in the achievement of mission and vision of our
company (toolshero, 2019). It is a strategic performance measurement model which helps in
formulating the strategies by interpreting the results arrived from such measurement model.
All the internal analysis methods made for formulating strategies will help in SWOT analysis for
our company. Strategies will be made on the basis of strength, weakness, threats, and
opportunities available for our company. It can be seen that there are a lot of opportunities
globally in which the company can expand. Also, there are certain threats relating to the
competitors as seen under porter’s five forces model. Thus it is important for us to conduct a
SWOT analysis of our company to get an overall view undertaken while computing the strategic
matrix and making relevant strategies.
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Marketing strategy implementation:
Marketing is one of the essential factors that should be dealing in the most appropriate way by
Fit and Fashion. According to me, the adoption of 7‘Ps marketing strategy will be most suitable
for the company as it will enable overall improvement in company products and marketing
efforts. F & F can adopt this strategy in the following manner:
 Product
Products that are going to be offered by the F & F should be accountable with consumer needs so
that maximum worth of money can be delivered to customers. It refers to the to the production of
products as per customer expectations (Business, 2018).
 Place
Our company is focused on ensuring enough availability of offered products which will help to
attract maximum customers and maximise the sales.
 Price
Our company is seriously focused on the optimisation of prices to deal with competitive forces.
This strategy will help to maintain the sales volume and cover the maximum part of the market
(Martin, 2014).
 Promotion
Our company is focused on improving the effectiveness of the market strategy, so sales
promotion, social media promotion, advertisement and more are included in the marketing plan
of the company. Diversified use of different media channels will lead to cover maximum part of
the targeted consumer base (Business, 2018).
 People
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People that are associated with the organisation are one of the most crucial assets of the business
so F & F should concentrate on maximising the communication and coordination among
employees and management. It will increase operational efficiency and employee retention.
 Processes
This step is related to improvement and perfection in each business process.
 Physical evidence:
It refers that provided services and products should be delivered with physical evidence to
increase the customer attachment with the company (Martin, 2014).
Designing and quality matters:
F & F is working in the fashion industry so innovative ideas should be implemented in product
designing without hampering the quality. To revoke the quality issues that were recently
identified in our products, management will implement TOM approach so that all problematic
components can be eliminated. This approach refers to continuous improvement in the internal
process to maximise the output from operations. Implementation of Total quality management in
designing and quality maintenance activities will increase the worth of company products for
customers.
Brand value management:
Banding of products is the main concern of marketing activities, and celebrity endorsement is the
strategy that will be applied by our company to enlarge the brand value in the market. Through
promotions with the celebrity will create a positive image of F& F products in the market and the
company will reach to maximum peoples.
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Analysis of performance:
EPS evaluation:
Due to increment in shareholders expectations, our company was focused on improving the level
of earning per share so that maximum profits can be earned to real owners. From the year 2011
to 2015, our company was focused on enlarging the EPS by more than 7% while by 5% for the
next years. Analysis of current profitability is indicating that profitability conditions are not
accountable with benchmarks, so implementation of improvement strategy is required (Fool,
2018).
Particulars 2011 2012 2013 2014
Profits 68240 96008 95911 147115
Outstanding
shares 20000 20000 20000 20000
EPS 3.41 4.80 4.80 7.36
Return on equity
According to the shareholders of the company, ROE should be maintained more than 15% so
that enough profits can be delivered to investors. In 2011, ROE of the company was 28% which
reached 29% in 2012 and decline to 22% in 2013. In 2014 and 2015 it was more than 27%.
These findings are sufficient to say that F & F Ltd is performing well and the same is required to
be maintained in the next years.
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Credit Rating:
Credit rating is very vital for commercial companies because it helps to gather funds from the
market at a low-interest cost. F & F is focused on maintaining the credit rating A or B+ to ensure
the leverage cost minimum. In 2011, the credit rating of the company was A which was declined
to B+ in 2012 and enlarged to A+ in 2013. These conclusions are saying that financing matters
are going to be managed effectively and the same will be maintained in the future.
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