International Marketing Strategy of Harrods: A Comprehensive Analysis

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INTERNATIONAL MARKETING

Table of Contents
Introduction 3
LO1 3
LO2 Assess an organisation’s internal environment and capabilities 7
LO3 Evaluate and apply the outcomes of an analysis using Porter’s Five Forces model to a given
market sector 9
LO4 Apply models, theories and concepts to assist with the understanding and interpretation of
strategic directions available to an organisation 10
Conclusion 12
References 13
Introduction
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It is important to maintain dynamic interactions of organisations with environment and also
provide designs for competitive advantage. The marketing importance strategic management
function used in all areas of business activities. The international marketing involves application
of principles of Marketing required for satisfaction of needs and ones of people settled across the
national border. International marketing undertake activities of marketing which is spread over
more than one Nation. The study will analyse the macro and micro environment of Harrods. The
department store is world leading brand dealing with designer clothes, luxury gifts, fashion
accessories, food and wine and so on.
LO1
The Strategic Context:
Missions, visions and objectives
the mission statement of Harrod explains that the company aims to be number one department
store in the world in the field of luxury branded Merchandise and also maintain retail standards
at unprecedented level can provide expertise and profitability. The objective of Harrod is to drive
the company in an inspiring and always pushing towards excellence.
Strategy
Strategy is defined as plan design to achieve long-term objectives. Strategy is defined as plan
design to achieve long-term objectives. Strategy involves methods or plans that have been
chosen by the organization in order to achieve desired future results and obtain goals and
solution to the problem. Strategies identified as the science of planning and locating resources
for efficient for efficient and effective use (Adisa et al. 2017).
The role of strategy
The role of strategy in achieving the business objective of Harrods detailed plan that can be
applied understanding the resources such as people money power and material is required for
achieving Vision and Mission of the organisation. It also helps to identify the barriers and
strategic intent it of the organisation (Akhtar et al. 2016)
Different strategic planning techniques
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The strategic planning technique refers to a process for developing strategy and planning for
execution of goals and Mission of the organisation (Bal and de Jong, 2017). The strategic
planning techniques involved-
● Benchmarking
● budget planning
● business analysis
● financial analysis
● Goal planning
● market analysis
● Risk identification
● structure planning and decision making
● SWOT analysis
Analytical frameworks of the macro environment:
Stakeholder analysis matrix and stakeholder mapping
The stakeholder’s analysis involves identification of stakeholders of the organisation. Prioritising
the means of the stakeholder is one of the important stakeholders Matrix.
The stakeholder mapping involves representation of stakeholder analysis and also organises key
criteria for managing them during the project. The stake holder analysis involves interest,
influence, emotional and financial stake (Bratton and Gold, 2017).
The matrix allocates the position to stakeholder in the grid and analysis the high power only
interested people which must be managed closely and high power less interested people which
must be kept satisfied. The matrix involves low power highly interested people which must be
kept well informed and low power less interested people which must be monitored. the process
also involves understanding of key stakeholders who have the potential to influence the opinions
and also motivate them.
Environmental analysis:
PESTLE
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Political - Harrods benefits from political stability and national and international regulations.
The directives impact upon the employment and legislations along with impacting upon the
consumer rights and Taxes (Brewster, et al. 2016).
Economic environment involves pay level cost of credit pressure from competition supply and
demand of river which impacts upon the pricing strategies of the company.
Social environment involves the celebrity following, designer collaborations and the population.
These factors impact the marketing strategies of Harrods for developing new products and
services and develop segmentation strategies.
Technology involves the use of innovations and technological field such as mobile apps and
collaboration with online services. The big Supermarket chains including Harrods are working
constantly to make use of Technology in their favour (Brewster, 2017).
Environmental factors involve undertaking green economy policies and reducing carbon
footprint and hazardous waste. Harrods is undertaking all the steps for operating in
Environmental friendly manner for demonstrating a sustainable practicing company.
Legal environment assured that Harrods are abiding by all the rules and regulations of the
operational country.
Porter’s Five Forces model
The Porter five forces model is analysis to determine the intensity of competition in the industry.
Threat of entry
Harrods faces threat from new entrants and may lead to low customer loyalty. The cost of
switching customers are low (Bromiley and Rau, 2016).
Bargaining power of suppliers
There are very few suppliers of designer products and many buyers. The bargaining power of
suppliers is higher and directly affects the firm's profit.
Bargaining power of buyers
The buyers have lower power to demand prices since the products are of high quality and
switching cost tour the suppliers are low.
Threat of substitute
The substitute products with tractor prices can lead to switch on the buyers from one product to
another. The presence of number of Supermarket stores poses a huge competition.
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Rivalry among competitors
The major determinant of competitive and profitability is determined by the competitive
industry. Harrods faces huge competition from other Supermarket brands such as Asda.
Structure-conduct-performance model
Strategic positioning: Ansoff’s growth vector matrix
Market penetration
The strategy helps the organisation with existing product and need for growth strategies in that
market (Buur et al. 2017). The Harrod can explore the market and look for other segment or
consumers for increasing its revenue base and also expand its operations.
Market development
Market development is a growth strategy which is used for targeting new markets with the
existing products. Harrods can expand its market to other areas with its existing products.
Product development
The development involves introducing new products expansions in accordance with the needs of
customers (Cardy and Leonard, 2014). Harrods pen look for the effect of development needed
by the company for building a good customer base and understanding the fact that existing
product has reached saturation.
Diversification
The diversification strategies involve switching to completely new product to be introduced into
a new market. Diversification can be undertaken by Harrods by introducing new products and
looking forward for new market.
Organisational audit: SWOT analysis
Strength
● designer collaboration and fashion accessories which see commissioned
● great location for easy accessibility
● unique and luxurious merchandise with well-known brands
Weakness
● high maintenance cost
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● cost of materials which are highly volatile
● high rate of substitution of the costume jewellery
● high competition rate among E-Commerce retailers
Opportunity
● increase in the sale of designer good and accessories in leather segment
● increasing partnership with established designers for focus in one Limited editions
● Collaborating with designers were young and innovative
● expansion in the availability on online platforms
Threat
● Difficulty in finding the brand
● price tracking which are inconsistent
● online presence which is limited
● app functionality which is restricted
LO2 Assess an organisation’s internal environment and capabilities
Organisational internal environment:
McKinsey’s 7S model as a management tool
● Strategy is the plan required by Harrods for maintaining and building competitive
advantage over the competitors.
● Structure refers to the organizational working pattern and reporting system. Harrods
follow a hierarchical system of organisational working (Cascio, 2018).
● Systems which require daily activities and procedure for engaging the staff members
● Shared values which defines the four values of the company and the corporate culture and
general working of ethics
● Style influences leadership adopted for organisation working.
● Staff includes the employees and the general capabilities. The staff in Harrod see capable
and competitive 2 follow the company goal diligently.
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● Skills involve competencies and skills required by the employees for working of the
company.
Analysis of strategic capabilities using the VRIO/VRIN framework
● Valuable
The valuable goods are of high demand in the market and command competitive pricing
(Ogunyom and Ojikutu, 2014).. Harrods resources that can be competitive advantage to the
business and designer resources and accessories are not easily obtainable
● Rare
resources available are there and provide an competitive advantage to the business of Harrods.
● Imperfectly imitate
Resources of Harrods not be imitated and it commands are high brand value.
● Non substitutable
The resources are not substitutable and cannot be substituted with any resources. This helps in
providing an edge to the company and also enhances the value of the product.
Benchmarking strategic capabilities and value chain analysis
The value chain analysis helps in identification of strength and weaknesses of each elements in
way and also give the series of activities that perform performs in order to provide customer
satisfaction. Value chain analysis involves primary and support activities.
● primary activities involved inbound logistics, operations, outbound logistics, marketing
and sales and services. The primary activities of Harrods provide advantage in the
marketing and sales activities and also providing a customer satisfaction for improving
and maintaining the value of the product (Sheehan,2014).
● support activities involves recruitment of raw materials, technological development,
Human Resource Management and infrastructure. Harrods provide the best in class
requirement of Machines and materials and also has invited technological development in
a good way. The management system and the whole organisation are well organised in
which includes planning finances information management quality control and so on.
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Cost-benefit analysis
the first benefit analysis is required in the process of Business and analyse decision. the
business analyst sums the benefit of situation attractions and detects the cost associated with the
action. This has to reach on the opportunity cost and evaluate potential cost and revenues the
company may generate. The cost benefit analysis of Harrods determined the feasibility of
operating in international markets and should pursue this project because of the potentiality to
generate additional revenue for the company (Taylor, 2014)..
LO3 Evaluate and apply the outcomes of an analysis using Porter’s Five Forces model to a
given market sector
Analytical tools and models of analysis:
The Balanced Scorecard to align organisation vision and strategy.
The balance score card analysis is a strategic performance measurement and is translated in
organisation mission and vision. The mission of Harrods is to turn top most retail sector
company and its strategy are aligned by the company helps to achieve this goal. the starting
point of the balance score card activation strategies which provides financial perspective,
consumer perspective, internal business processes and learning and growth (Ylirisku et al. 2016).
Competitive analysis using Porter’s Five Forces model
The competitive analysis helps in devising strategic research that specialises and review
information about Rival firms. The advent of Technology and processes has provided
opportunity to retail firm to reach out for consumers. the competitive analysis also helps in
finding out the threats present in the financial wellbeing of the company..
The strength and weaknesses of potential competitors of Harrods needs to be analysed in order to
evaluate the product and services that can be improved and attract target market
Applying the Ansoff matrix to product/market strategy
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The market strategies involve marketing mix including product, price, place and promotion.
Harrods can focus on developing new products for new emerging markets which will add
additional evidence is the company. The pricing of the product can be modified in order to suit
the emerging markets so that it is able to build loyal customer base. the new emerging markets
provide a golden opportunity to the company to explore new avenues of revenue generation and
promoting products which are high demand. The value proposition of the company and he
marketing messages and information are high level elements that promotes product and market
strategy of the company.
LO4 Apply models, theories and concepts to assist with the understanding and
interpretation of strategic directions available to an organisation
Strategic choices and directions:
The application of Porter’s generic strategies: cost and price leadership
strategy, differentiation strategy, focus strategy and the extended model of Harrods
Bowman’s strategy clock
The Bowman strategy clock explore the options available for strategic Positioning which
includes the position of the product in the competitive position in the market. The Industries
business regarding the position of the product which has two dimensions which includes price
and perceived value.
● The low price and value added thought of competitive position for business and there is
no product differentiation. this is generally bargain basement strategy (Schuler and
Jackson, 2014)..
● The low price positions the low cost leaders in the market and the strategy involved is
cost minimization. competition about business is related to low price position and invoice
price wars.
● Hybrid involves elements of low prices competition but with product differentiation. It
Aims to persuade consumers and also add value to the goods at reasonable price and are
acceptable product differentiation.
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● differentiation strategies provide consumers highest level of perceived added value.
Branding plays a key role and product quality is also a very e important aspect.
● focus differentiation strategies aim to position the product at highest level and the
consumer buys product because of the high perceived value.
● risky high models which is considered as a doomed to failure strategy because of high
prices set for a product without offering anything extra in terms of perceived values.
● Monopoly market is one offering of the product and is generally not concerned about
the value of the customer perception regarding the product. is aware of the fact that is
product is the only choice available for the consumer.
● Loss market share results because of the competitive market and setting of middle range
of standard prices of the product which have low perceived values.
Hybrid strategy
The hybrid strategy is well suited for the business working of the Harrods as seeks to achieve
product differentiation at a competitive prices. the hybrid strategies involves blending of
elements of differentiation of product and competitive prices in a unique way. The hybrid
strategy provides a competitive advantage and enhances organisational performances and
excellence.
Diversification
The diversification strategies help the organisation to adopt development for business.
diversification strategies can be adopted by Harrods for bringing more Investments in order to
diversify portfolio of the business and also minimise risk of capital loss. Harrods can venture
into leather segments with product and diversify its portfolio to other emerging markets to gain
additional revenue. there are three types of diversification strategies which includes concentric,
horizontal and conglomerate.
Vertical/horizontal integration
The vertical integration is a competitive strategy which helps the company to take a complete
control of one or more stages of production and distribution of product. a company can opt for
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vertical integration in order to ensure that supply control of raw materials and product
manufacturing is there business operation ambits. The vertical integration helps to commander
distribution of product. Harrods can undertake vertical integration to undertake the command of
distribution of product Centre emerging markets. Horizontal integration is a competitive strategy
which requires acquisition of business activities and value chain in different industries.
Conclusion
The study safety concludes that it business to undertake analysis of macro and micro
environment of the business in order to develop the market and product for international
marketing purposes. the swot analysis pestel analysis, competitive strategies, market strategies
ansoff matrix are few of the examples of analysis strategies that can be undertaken by a company
to understand its competitive position and need for diversification for generating additional
revenue. The study also focuses on understanding the need for Harrods undertake business
opportunities in the international marketing segment and understand its strength weakness
opportunities and threats to enhance its presence in the international segment.
References
Adisa, T.A., Osabutey, E.L., Gbadamosi, G. and Mordi, C., (2017). The challenges of employee
resourcing: the perceptions of managers in Nigeria. Career Development International,
Vol.22(6), pp.703-723.
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