International Business: Arcadia Group Challenges and Strategies Report

This report provides a comprehensive analysis of the international business challenges faced by Arcadia Group, a British multinational retailing company. It delves into the impact of technological instabilities, societal and political strains, and environmental fragilities on the company's performance a...Read More

International
Business Issues
and Practice
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Table of Contents
Table of Contents.............................................................................................2
INTRODUCTION................................................................................................3
MAIN BODY......................................................................................................3
How technological instabilities affecting Arcadia group...............................3
Strategies to solve technological instability problems of and taking
competitive advantages (600)......................................................................5
How societal and political strain affecting Arcadia group.............................6
Strategies to solve societal problems and taking competitive advantages..8
How environmental fragilities affecting Arcadia group.................................9
Strategies to solve environmental problems of and secure market share. . .9
CONCLUSION.................................................................................................10
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INTRODUCTION
International business refers trade of services, technologies and others
at a global scale. There are several benefits of international business and
that is why many companies are expanding their businesses (Hamilton and
Webster, 2018). On the other hand, some factors create barriers in the path
of the success which need to be considered by them for being in the
competition. This present study is based on Arcadia group which is a British
multinational retailing company whose headquarter is in London, UK. It also
owns high street clothing retailer but due to some external environmental
factors it is facing several problems. So, it is important for this company to
analyze all factors in a detailed manner and implement appropriate
strategies. This present study is going to show some external environmental
factors and their impact which is having on the performance of Arcadia and
it’s all other brands. It will also show some technological, social, political and
environmental factors and their effects. Further it will also show some
strategies and models which can help Arcadia Group in solving all problems
and accomplishing its all pre determined goals which are securing market
shares and taking competitive advantages. Some strategies which are
important and effective include: policy implementation, widening of women
size range clothing, implementing updated software and others.
MAIN BODY
How technological instabilities affecting Arcadia group
Arcadia group own the high street clothing retailer which has around
2500 outlets in the UK. There are several stores which it owns like Topshop,
Burton and others. But it is stated that due to climate change and Covid 19,
all these stores will close but it wants to make its position secure in the
market (H&M, Topshop and Body shop Among Retailers to Close Due to
Corona virus Pandemic, 2020). So, it is important for this company to focus
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on some external environmental factors which are affecting and can affect in
the future. One of the main reasons behind it to identify factors is to make
changes in its internal business strategies and modify them accordingly
which can help it out in meeting its goals. It wants to take competitive
advantages and secure market share. There are several factors which can
affect and one of the factors out of them is technological instabilities.
Technological instabilities: High street retail chain Arcadia group stated
and claimed that it is in serious trouble due to significantly liquidity issues.
There are several companies who are competing with this company and
making an effective use of technologies. Advanced technologies are making
them able to make their processes creative an innovative. Investment in
technologies depends upon the financial stability of the company. If an
organization is not financial sound then it cannot invest in technologies and
compete with other companies. Technologies has made easier all works. But
use of technologies to great extent and in all functions are creating problems
like reducing employment opportunities, lack of human efforts, increasing
competition etc. In the context of Arcadia group it can be said that it owns
several stores and brands and one of its brand Topshop was one of the first
retailers who launched an app which allowed this to make marketing
activities effective (Cravino and Levchenko, 2017).
On the other hand, Zara, Boohoo and Asos , online brands also
invested in technologies and stated digital marketing which increased
competition Due to lack of skilled technical workforce, intensity of
competition it became difficult for Arcadia group to have access to
technologies. There are several companies who do not have proper access to
technologies and also due to changing needs of people, it has to change
their resources, tools and techniques which increases overall operative cost
and lower profit margin of this company. It is one of the main examples of
technological instability due to globalization, changing needs of customers
and changes in other factors which are creating several problems for Arcadia
group. It is also stated that as compare to big brands like Zara and others,
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one of the brands of Arcadia group, Toposhop’s website still does not have
catwalk videos as well as collection of images of its products by which it is
lacking behind. It can create problems for this retailer to secure market
share and taking competitive advantages (The Rise and Fall of Arcadia
Group, 2019.). Other retailers and physical stores H&M, Zara are more
responsive than this and they solve problems and well as expectations of
younger fashion consumers immediately which are helping them out to
increase customers’ experience and making a strong position in the market.
Some other problems and instabilities with technologies include: Warehouse
wireless instability, printing and scanning issues etc Poor warehouse wireless
coverage, network instability is one of the main problems from which several
companies have been affected. There are several causes or reasons of this
instability such as: wrong selection of wireless solution, bad planning and
implementation and lack of equipment standardization.
On the other hand, it is also analysed that investment in technologies
made it able to take advantages. Some of its brands make use of technology
by which they have made personalized solutions in order to deliver
personalized products solutions and recommendation. They also have made
them able to allow more personal online experience. But due to changes in
customers’ needs and other factors it is lacking behind than other retailers
and competitors. So, overall it can be said that technologies instabilities is
affecting this retailer to the great extent and in negative manner. It is also
important for this retailer to adopt effective strategies for solving all these
problems and being in the competition.
Strategies to solve technological instability problems of and taking
competitive advantages
There are several ways and strategies which can allow this company to solve
these technological instabilities and all of its negative effects. One of the
main factor and functions which can allow this company or retailer to have
effective position and make technological stability is effective planning of
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warehouse wireless instability. For implementing or installing networks in an
effective manner there is requirement of making an effective plan. By
discussing which network will be suitable and which network is sustainable
and can help company to take several advantages by using this. A proper
planning can also allow Arcadia group and its entire brand to compete with
others and also prevent them against malfunction which is one of the main
problems.
Effective equipment standardization: By making an effective
standardization between hardware vendor and device model can make it
able to relief from some problems and technological instabilities. It can make
its position by using effective tools and stable technology. One of the main
aims of this company is to secure its market share as due to Covid 19 it is
already facing problems and most of its stores are going to close. So, by
using stable technologies with equipment standardization it can be in the
competition (de Borst and Verhoosel, 2018).
Ability to cope up with changes: By developing flexibility skills and
developing ability to solve problems as per current situations and changing
needs it can make it able to continue its operations and functions without
affecting others and getting affected. One of the best tool which can help it
out to cope up and change strategies as per the changing situation is
working screening equipment. It is one of the main technique and tool which
can help this company out to make its people safe and secure and also
continue its functions. By implementing this tool it can make its position and
can solve problems which can occur in the future. Other main changes which
it can do as per the current situation and Covid 19 is remote working. By
allowing remote working to employees and focusing on digitalization or
online trading it can continue its activities. It can employ 1-2 employees for
inventory management.
Proper software updates. Improper software update is one of the main
problems and reason of technological instability. For making stable
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technology and making use of them it is important for Arcadia group to focus
on updating and with proper software updates it can continue its work
without changing techniques.
Proper technology management: By employing effective and skilled
workforce in IT department who have knowledge of solving problems and
dealing with complex situations, it can manage technologies. Because failing
in proactive and properly management of technology can also create
security and data breached problems which can direct affect image of the
company.
So, from the above discussed strategies it can be said that Arcadia can
secure its market share, make its position in the market and take
competitive advantages.
How societal and political strain affecting Arcadia group
There are several social and political factors which are also affecting Arcadia
group and its some brands in both positive and negative manner. For taking
advantages of opportunities it is important to identify all areas of these
factors which are affecting and can affect it is a negative manner. By
analysing effects, it can select the best and appropriate strategies. Some
societal strain which is affecting the most to Arcadia group is changing needs
of customers.
Societal factors: Due to changing lifestyle of people, needs of their
regarding fashion industry is changing. These changes in colour, patterns
and others put pressure on this company to make changes in strategies and
all patterns of fashion as per the needs of customers. It can increase cost of
the company. But for being in the competition it is important for them to
satisfy customers (Huq, Chowdhury and Klassen, 2016). Increasing
awareness among employees about working condition is other main factors.
Workers seek an effective and safe working environment where they can
work in an effective manner and if company fails in providing effective
working environment as per their expectations then company have to pay for
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it. In this context it is identified that this company has been fined £ 450,000
because a 10 year old girl got injured badly at its Topshop store as queue
barrier toppled on her. After breaching health and safety law it was fined so,
it can be said that providing security and safety to customers and employees
is one of the main factors which need to be considered by this company for
attracting customers and employees (Topshop Owner Fined £ 450,000 After
Falling Safety Barrier Crushed Girl’s Skull, 2019).
Political factor: Rather, this factor there is some political strain or factors
which are also affecting this company. One of the main examples of it is
Brexit. After Brexit and majority of votes in this favour affected several
companies and industries and fashion industry is one of them who got
affected by it. Some main departments and areas of it which affected by
Brexit the most include: manufacturing, supply chain, workforce etc. It has
increased administration burden and it company wants to trade to Europe,
there are national VAT registration thresholds set by each company. Brexit
affected physical and local stores of companies but those companies who
sell their products and services online they can continue their operations and
functions. As large part of revenue of Arcadia is produced from online sales
but some of its physical stores affected by it. So, it is important for this
company to continue its services online completely (PESTLE Analysis of
Arcadia Group, 2018). It can help it out to be in the competition and also
fight against Covid 19 which is one of the main issues. But it is stated that
import of some products like raw materials and others are expensive or
costly which is increasing overall cost as well as decreasing profit margin. So,
it can be said that it has affected it in this manner. People of UK or local
people also have to pay high for products and services due to Brexit and due
to unemployment customers invest too less in this. So, it can be said that it
is affecting sales of the company.
For being in the competition it is about to sell its products at cheaper
price to customers overseas and it has proven beneficial for this company
over the 2016 boxing day sales have attracted around 27 million shoppers
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and many of them are from China and it has been stated that around 3.93
billion. So, it can be said that it is beneficial for online sales and for taking
more advantages of it and ability to sell products online and operate function
digitally it can be suggested that it should expand its business or expand
stores abroad (Chu, Chan and Cheung, 2018). There are several regulations
in this context which are being imposed by the government like tax policy,
labour law and others which are affecting this company and for protecting
itself against lawsuit it is important for Arcadia and all its brand to follow all
regulations and policies. It can also be said that by implementing policies
regarding this like anti-discrimination and health and safety at workplace it
can protect itself.
Strategies to solve societal problems and taking competitive advantages
Fashion footprint: For solving problems related to social and political
strain it is important for manager of this company to select the best strategy
and model. For solving issues related to societal factors like safety at
workplace, cope up with changes of customers it can make an effective use
of fashion footprint. Fashion footprint is a process of monitoring as it works
as a tool for this company. By making an effective use of it, it can manage
ethics as well as environmental impacts of business By doing so it can also
become sustainable which is one of the main aims of this company because
it knows that by becoming sustainable and performing activities in an ethical
manner it can secure its market share, attract customers to the great extent
and can also take advantages of competition. There are 4 main aspects of
footprint like products, environment, communities and employees (Social
Factors of Arcadia Group, 2018). By doing this and focusing on all these
areas and aspects it can solve negative effects of societal factors as it is
stated that this company has been fined £ 450,000. By supporting suppliers
to improve working condition and also making use of wastes for making new
and other products it can improve social side of the business. By using
effective tools and policies it can improve working condition where all levels
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of employees can work together and retain with the company for the long
run.
Safe working environment: It is stated that Arcadia has some female
workers and safety is one of the main concerns and factor which is being
considered by them while deciding working and choosing organization for
that they want to work. So, for getting skilled workforces which is one of the
main important resources of the company which help companies in
accomplishing their goals. So, by providing them effective working
environment and making them sure about safe working environment they
can retain employees and also encourage them to increase their flexibility
skill and meet needs of customers (Addy and Dubé, 2018).
Widen women size ranges in clothing: In addition, it is also identified
that Arcadia group have qualitative products but it does not have clothing in
all sizes and it is one of the main weaknesses of it which can limit its
customers’ range. So, it can be said that by manufacturing clothing in all
sizes it can satisfy changing needs of customers and can increase customers
of all age group of people. There are some other strategies which can help
Arcadia group to solve negative effects of political strain. It is already stated
that it focuses on online trade which is helping out them to being in the
competition and as compare to other physical stores companies, it has been
increased its sales. So, it can be said that by widening women size ranges it
can allow more people to buy their products and make more money as well.
Policy management: It can be said that social factors are linked with some
environmental factors so, for solving problems of societal factor it is
important to focus on environmental factors along with this. For making
political factors in its favour it is important to implement as well as following
all regulations and guidelines of policies which are being regulated by the
government. It can help it out in preventing against lawsuit and also in
improving its image as well. It can also allow employees to protect their
rights and getting fair treatment.
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In addition, it can be said that rather, importing raw materials from other
countries it can manufacture at their own which can decrease its cost. It is
identified that after Brexit import of raw materials are increasing its costs
and lowering profit margin. So, for securing market share and gaining
advantages of competitive opportunities it can follow all discussed strategies
and models as well.
How environmental fragilities affecting Arcadia group
Arcadia Group is an retail organisations are there are several
environmental factors which are affecting Arcadia group. Environment has
become very important consideration for all individual and several
organisations because of current stage of environment and negative impact
on environment because of increased industrial activities. Arcadia group is a
retailer and increased environmental impact on retailers is to reduce
wastage which has negative impact on the environment. Use of plastic is
also another environmental factor which affect environment because several
studies have found that plastic has severe negative impact on environment
and especially on marine life. One of such studies bring issue on forefront
and everyone started focusing on the issue and consumers also started to
reduce the use of plastic and this is requiring that retail stores also reduce
the use of plastic in their operations. Because Arcadia group is a retailer of
clothing and retailing this is important for it that it considers all the aspects
of its operations and specially what material it uses in its products. There are
several retailers who has reduced use of plastic and many of the retailers are
using reusable and recyclable packaging. Material which is used by Arcadia
group requires to be such that are environment friendly and does not have
any negative impact on the environment. This is not only a environmental
protection requirement but customers now a days are also looking for
products which are sustainable and does not have any impact on
environmental safety and sustainability. In its environmental concern along
with reducing wastage to minimum possible level it is also required that
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Arcadia group use that waste and possible best manner so that it can
eliminate impact of waste on environment. Use of sustainable products by
Arcadia group also comes with an issue that though some of the customers
are demanding and willing to get sustainable products ad products which are
made from environment friendly material but there are less people with an
awareness of environmental friendly products and material is also not
available in abundance which also increase the cost of the material and
product. Use of energy is another factor which affect retail industry this is
concerned with what type of energy is used by Arcadia group that includes
lighting which is used in stores, there are options available for sustainable
lighting and this is why such businesses are expected to use that.
Strategies to solve environmental problems of and secure market share
Environmental problem are getting more difficult and important
because earlier people were not aware about it but now there are more
people aware about environmental impact. This awareness is increasing day
by day and this is why it becomes very essential for business organisations
that they consider impact of environment on their operations and what
measures they can take to avoid negative impact of environment on their
practices. The problem is significant and Arcadia group needs to immediately
find the solutions so that it can operate in a way that environment get least
affected by practices of Arcadia group. Some of the strategies to reduce
environmental impact of Arcadia group-
Use of single use plastic- This is one of the important factor that is
affecting environment and single use plastic contributes more in this and this
is why Arcadia group requires to stop use of single use plastic completely.
This is because this is mostly used on packaging and there are several other
options available that Arcadia group can adopt to instead of plastic. This will
reduce impact of Arcadia group on environment and at the same time will
also improve image of Arcadia group. This involves that bags which are given
to customers for the purpose of carrying are not of plastic and those which
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are sustainable. Arcadia group can also give its customers sustainable
clothes bag which can be reused by the customers or group can encourage
customers to bring their own bag that they can reuse. This will be beneficial
for environment and for Arcadia group as well.
Using Sustainable material for Production- This is another strategy for
Arcadia group that it should include sustainable material for production of its
products. There are now several type of material available that Arcadia
group can use and that are sustainable and environment friendly. This will
also have positive effect on Arcadia group as a business because this will
attract more customers towards it because increasing awareness of people is
requiring that they use products that are environment friendly. This is also a
business opportunity for Arcadia group that it makes environment friendly
cloths and accessories to cater needs of those who are willing to protect
environment. one of the example for this is that Arcadia group use
sustainable and environment friendly material for making the clothes, shoes
and accessories. Such should be material that can be disposed and keep the
environment safe. Other than this, before that material has been prepared
without making any negative impact on the environment.
Recycling of wastage- This strategy involves that Arcadia group use
material which has already been used and using that material for production.
Recycling does not limit to using back existing wastage of Arcadia group but
also involves using wastage and those products which has already been used
by public. There are some examples where retail organisations are doing
this. This way they are contributing to protect environment and along with
that they also get benefit in terms of cost because recycling requires scrap
material and waste material and this is comparatively cheaper than new
material. But recycling of products also come with some of challenges as this
will require Arcadia group to employ measures through which it can convert
different type of material in form of using it for making new products.
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CONCLUSION
From the above study, it has been summarized that external
environmental factors like technological instability, political and social strain
and others affect companies to the great extent in both positive and in a
negative manner. For eliminating all negative effects companies make use of
strategies which also has been shown in this study along with ways as how
effective strategies help them out in solving problems. Some ways and
strategies which are being used by companies to deal with technological
instabilities and making it stable include: effective planning, installation and
implementation of software and equipment standardization. Further, it has
discussed some other factors like social, political and environmental which
also affect performance of companies to the great extent and can also
become barriers in the oath of the success. By using some strategies and
models related to environmental and social, political, companies have made
themselves able to solve all problems as well as accomplishing their pre
determined goals. Due to changing situations like climate change and Covid
19, one of the main aims of companies is to secure their market share and
prevent themselves from closing stores and retaining their customers.
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