Strategic Analysis Report: House of Fraser's Administration

This report presents a strategic analysis of the House of Fraser, a major UK retail chain that recently went into administration. The analysis employs SWOT and PESTLE frameworks to evaluate the internal and external factors influencing the company's operations. The report defines the company's purpose, reasons behind its administration, and assesses its strengths, weaknesses, opportunities, and threats. Furthermore, it examines the political, economic, social, technological, environmental, and legal factors impacting House of Fraser. The analysis evaluates the current situation and identifies key gaps that need to be addressed in future strategies, offering insights into the company's challenges and potential paths forward, ultimately providing a comprehensive overview of the company's strategic position and the factors contributing to its decline.

Strategic management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
1.Defining the purpose of the House of Fraser..........................................................................1
2. Reason behind going of House of Fraser into administration.................................................1
3. SWOT analysis of House of Fraser........................................................................................2
4. PESTLE analysis of House of Fraser......................................................................................2
5. Evaluation of current situation and gaps tat are required to be addressed..............................2
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUCTION
Strategic management is a continuous process of planning, monitoring, analyzing and
assessment various aspects of the organisation to achieve the organizational goals and objectives.
In the present report strategic analysis of one of them major retail chain of UK, House of Fraser
is carries out who has gone under administration recently. The evaluation is carries out by
conducting SWOT and PESTLE analysis of the organization to determine the internal and
external factors affecting the operation of the business. With this an evaluation is carried out
with the outcomes of both analysis whether they meet the aims and objective of firm or not. In
the last section of the report a detailed elevation is presented with current situation and gaps are
determined which company needs to fill in its future strategy.
MAIN BODY
1.Defining the purpose of the House of Fraser
Mission: To be at the heart of every celebration and provide heart's desire to every
consumer (House of Fraser, 2018). The organizational Behaviours must
deliver industry-defining standards in everything they do, ensuring our
customers honour them by making Fraser Hart their first choice, each time
and every time.
Vision: To gives shape and direction to the future of the organisation with providing
guiding lights.
Value
statement:
What the organization believe is important in the way they work and behave
and this defines the way thing are get done for the organization in preset of
future times (House of Fraser | Business, 2018).
Objectives: The objective of the organization is to have a single heartbeat for the system
having single window of all the personnel.
2. Reason behind going of House of Fraser into administration
Going into administration means the administration and control of an organisation is
passed on to an appointed administrator by the court. The aim of the administrator is to leverage
to assets of the company and repay the debts quickly. Ernst and Young has appointed as the
administrators of House of Fraser and it will close 31 of its store out of 59. The organization is
1

facing turbulence in its administration and profits for longtime House of Fraser calls in
administrators, 2018). Having 59 stores in UK is a big deals abut with change in time trends and
technology it didn't get updated with and this lead to the fact that lost interest going to the
outlays and store of House of Fraser. Another reasons for the reduced popularity was not
cutting down the stores which were not popular anymore and having too much brands in the
store. The chains were using traditional way to present the products and it did not apply any
methods to make is appealing virtually and physically that attract the consumers.
All these factors lead to a combination of issues such as raise in the costs, poor trading,
lack on investment and inflexible and expensive store estate. This lead to enhance the cost such
as bricks and mortar and lately it has been found that lot of the goods sold in House of Fraser
does not longer to it anymore rather more hasn't 600 third party concession owners were
hawking them (House of Fraser administration, 2018). The brand owned by the chain were
taking back seats. All these factors lead to reduction in profitability and popularity of the
products and brand name House of Fraser with this the liabilities of the house increased and it
started in lagging the payments to the creditors and all theses factors together were responsible
for getting the House of Fraser into administration.
3. SWOT analysis of House of Fraser
Strengths: one of the major strength of House Fraser is determined as having a strong
British Heritage, having 59 stores in UK and Ireland. Having in hose brands like Biba and
Linea. Providing facilities and service of click, buy and collect, mobile optimization, recognition
reward card and Master card. The strength of the organization also includes a wide range of the
brands and product availability at the store (Haile and Krupka, 2016). This chain enjoys as good
brand image and reputation in markets of London and Ireland as this is a firm established in
1859 which is almost 170 years old, hence hold immense level of trust worthiness of the
consumers.
Weakness: The weaknesses of House of Fraser can be listed as non adherence to the
newer technology which are being adopted by each and every organisation in the market to
survive in industry for a long term. The online shopping platform of the organization does not
provide a good and effective base for online purchasing which is one of the essential factor of
shopping in the present time. The stores of the House of Fraser do not get updated with the
change in trends and preferences of the consumers. Also, the cost of maintenance of stores is
2

too high and among all expenses cost of brick and mortar is highest. The Management of the
organization have been changed twice in a span of 15 years.
Opportunities: The opportunities of this organisation can be listed as improvisation of
the SEO optimization in order to become home department before competitors (House of Fraser
in crisis, 2018). Grabbing a position in the market again with a boom by improving the online
selling platform and changing product alignment as consumer oriented, make available goods
and commodities in the store according to the present trend taste and preferences of the
consumers.
Threats: With going under administration the threat of getting back on the feet is huge
for the House of Fraser the competitors can take away the position and brand value of the
organisation. With unsustainable cost base lead to existential threat to the business. Another
threat for the organisation apart from losing the market share and image is fling in the cost
control (Kolios and Read, 2013). The traditional and high level maintenance of the cost of
legacy store have proven to be unsustainable in the past so it can be a threat in the future as well.
The SWOT analysis is telling the fact the Vision of the firm to shape the future of the firm with
provide guidance light was utter failure. This was supposed to be strength of the organization
but it proved to be a weakness and might convert into threat, if not addressed on time.
4. PESTLE analysis of House of Fraser
Political factor: this can be defined as a factor that affects the operation of House of
Fraser on government policies and political stability announcement of Brexit the political
stability of UK is not good and id facing a tough time. The GDP, inflation have experienced
major fluctuations in past 3 years (Vision & Values | House of Fraser Careers, 2018). The same
factors have also impacted the business of the House of Fraser. With Brexit, the earlier president
reigned and election were held and new president was appointed for Britain, this shows the
political instability in country. Another factors that affect the organizational operation are change
in fiscal and taxation policies. The labour and environmental laws have immense impact on the
House of Fraser.
Economical factor: the factors which effect the organizational activities of House of
Fraser can be defined as the economic growth of the nation (Jiang and et.al., 2018). The interest
rates on the loans and advances and other grant of the government have impact of the business as
his increase the court and expenses of the firm, hence reducing the profits. UK is facing a
3

change in the economic factors as well with Brexit. The Brexit is going to take place in May 219
and the 31 store of House of Fraser are also supposed to close in January, 2019. With Brexit
new legislation will apply and changes are being adopted by the nations and organisation in
present time as well.
Social factor: this is one of the major factors that is effecting the operation of the House
of Fraser, theses factors include growth of population, change in the trends and preferences of
consumers, cultural trends, organizational image etc (Our Responsibilities | House of Fraser
Careers, 2018). one of the factor which contributed in closing of 31 stores and going of the
organization under administration is nor adhering to the changing consumer habits and their
taste and preferences. Though the organizational and brand image played a positive role in
keeping the operation off the firm intact.
Technological factor: this is another factors which have plays a vital role for getting
the company at present position. The main technological factor that affect the activities and
functions of all organization are manufacturing goods and services with variety, changing
technologies, present technology getting matured, old or obsolete, distribution channels of the
goods and services, target market, potential copyright, etc. For House of Fraser the main factors
that effected in drop of sales is determined as not providing an effective platform for online
shopping. Another factors that effected in closing of more than half of the sales outlet of House
of Fraser is not adherence to the technological change (Rastogi and Trivedi, 2016). Today is
word of internet and online shopping, and the organization did not give proper and effective
attention to hits factors which increased the cost bricks and mortar of the firm as well. Also, the
advertisement was not effective and stores were not virtually and physically attracted the
consumers.
Environmental Factor: House of Fraser face some environment factors such as deadline
of raw material, pollution and green house gas emissions, decrease carbon foot print, climate and
weather etc. In order to that, some legal rules and regulation regarding to environment. These
factor affects safety and health of society, so that company follow all regulations and reduce
wastages in the business. If deadline of raw material is missed, so that this directly affects on
operations of house of Fraser. Firm give penalty for any kind of issues relating to health and
safety of consumers. It is necessary to reduce carbon footprint and raising power efficiency that
4

involving in environmental factors. Therefore, organization need to reduce all factors that are
involved in environment.
Legal Factor: House of Fraser face some legal aspect such as health and safety,
consumer rights and laws, labour legislation, equal opportunities, advertising standards.
Therefore, firm make sure that follow these regulations for running business smoothly. Company
give equal opportunities for their employees, so that workers are effectively working in business
in terms of providing services to customers, increasing sales of firm. They need to adopt
consumer rights laws for safety and security of customers (Luís, Lickorish and Pollard, 2016).
Firm need to strong their online presences for increasing customer demand and needs for product
and services. In the international context, firm need to follow data and copyrights laws for
running the business carefully. These factors also effects on production and customer
satisfaction. This directly effects on operation and activities of the House of Fraser.
With PESTLE analysis this can be seen that two of the factors of PESTEL dialysis that
had immense level of erect of House of Fraser has been determined as nanotechnologist and
social. The objective do match with the effect of factors as objective of the firm is to have a
single heartbeat for the system a and this was the reason for non decentralisation of technology
updation. The vision of the organisation is still intact as they are still going in the way they
wanted it to be and are not changing to the extent in which they can lose their roots and visions.
5. Evaluation of current situation and gaps that are required to be addressed
This can be stated that the current position of House of Fraser is not good and the
organization is facing a tough times. Though the Vision of House of Fraser is still intact but this
is not helping the firm in getting at a better position. Instead, the business is going to close its 31
outlet in nest 2-3 month which is not a good sign with SWOT and PESTEL analysis this has
been determined that having good brand image and historical value of the store the organization
is still in operation (Srdjevic, Bajcetic and Srdjevic, 2012). But with not abiding by the changes
in technological factors the potential opportunity became threat for the business. The company
is still selling the brands which are now out dated and people do not prefer to buy them, this
increases the cost and expenses of the organisation. House of Fraser is suggested to make huge
changes in its business strategies and make such plans so that it can come in the market with new
technology with a boom.
5

Another factors that effected the organization is fail is in answering the consumer
demand on time. This is universal change that every business need to look into on a regular
basis. This is change in taste and preference of the consumers and change in their trends and
their habits. The house of Fraser is given advice to renew the of goods and products it sells at
the malls and outlets, this is also suggested to them to stop keeping those brand which are not
in demand anymore instead keep those brands and products which are in trend and demand of the
consumer, the business must keep a close watch on the changing trend and fluctuation in
demands, habits and preferences of consumers (House of Fraser: Five things that went wrong,
2018). The factors which also need to be taken into account is to evaluate changes in accordance
to areas and community. As certain product or brand may be in high demand in Britain but not
in Ireland and vice versa.
The factors which are determined in this report is related with analysis of the reasons
which lead a successful organisation in the position of closing its most of the outlets and going
under administration. These are the situation which defines that the company is not doing well
both financially and administratively. The company fails to adhere with the getting its business
online and operating it effectively and also they dis not reply on the changing trends and
demands of the consumer timely (House of Fraser's Peril Reveals How Its Rivals Are Already
Different Beasts, 2018). This both factor have inverse effect on the business. Moreover, it has
been also identified that with Brexit, UK will definitely face political instability which is one of
factors effecting businesses. Along with this inflation and CPI and RPI will also change. The
management of House of Racer is suggested to enhance their online platform, make more
product available online and develop strategies to expand business through this platform. They
must make strategies to cope with the coming future uncertainties with Brexit.
CONCLUSION
From the above report it can be concluded that the reason of going House of Fraser in
administration is its lack of adaptiveness to change changing trends and technologies. It failed
to step up with the taste mad preferences of the people. With SWOT and PESTLE various
different internal and external factors have been analyzed which do not adhere at all with aims
and objectives of the business. The major gap between is determined as lack of adoption of the
technology and becoming internet savvy with lesser initiative taken for online shopping. To fill
6

these gaps house of Fraser is suggested to build up such strategies that focuses more on
enhancing the online shopping and cut the cost of brick and mortar.
7

REFERENCES
Books and Journals
Haile, M. and Krupka, J., 2016. Fuzzy evaluation of SWOT analysis. International Journal of
Supply Chain Management. 5(3). pp.172-179.
Jiang, R and et.al., 2018. A SWOT analysis for promoting off-site construction under the
backdrop of China’s new urbanisation. Journal of Cleaner Production. 173. pp.225-234.
Kolios, A. and Read, G., 2013. A political, economic, social, technology, legal and environmental
(PESTLE) approach for risk identification of the tidal industry in the United
Kingdom. Energies. 6(10). pp.5023-5045.
Luís, A., Lickorish, F. and Pollard, S., 2016. Evolution of strategic risks under future scenarios
for improved utility master plans. Water research. 88. pp.719-727.
Rastogi, N. I. T. A. N. K. and Trivedi, M. K., 2016. PESTLE technique–a tool to identify
external risks in construction projects. International Research Journal of Engineering and
Technology (IRJET). 3(1). pp.384-388.
Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria
decision making based on SWOT/PESTLE analysis: a case study of reconstructing a water
intake structure. Water resources management. 26(12). pp.3379-3393.
Online
House of Fraser: Five things that went wrong. 2018. [Online]. Available through
:<https://www.bbc.com/news/business-45127423>.
House of Fraser calls in administrators. 2018. [Online]. Available through
:<https://www.ft.com/content/fd0ab332-9c68-11e8-9702-5946bae86e6d>.
House of Fraser. 2018. [Online]. Available through
:<http://www.retail-manager.com/project/house-of-fraser/>.
House of Fraser administration. 2018. [Online]. Available through
:<https://www.independent.co.uk/news/business/news/house-fraser-administration-latest-
store-closures-where-job-cuts-retail-a8485786.html>.
House of Fraser in crisis. 2018. [Online]. Available through
:<https://www.insider.co.uk/news/house-of-fraser-administration-jobs-12633935>.
Vision & Values | House of Fraser Careers. 2018. [Online]. Available
through :<https://careers.houseoffraser.co.uk/about/vision-values/>.
8

Our Responsibilities | House of Fraser Careers. 2018. [Online]. Available
through :<https://careers.houseoffraser.co.uk/about/our-responsibilities/>.
House of Fraser | Business . 2018. [Online]. Available
through :<https://www.theguardian.com/business/house-fraser>.
House of Fraser's Peril Reveals How Its Rivals Are Already Different Beasts. 2018. [Online].
Available through :<https://www.forbes.com/sites/katiebaron/2018/06/07/house-of-
frasers-peril-reveals-how-its-rivals-are-already-different-beasts/#317a49d8318d>.
9