CX770020 Strategic Management Report: Kathmandu Analysis

This report provides a comprehensive strategic analysis of Kathmandu, focusing on its external and internal environments. The external analysis utilizes the PESTLE framework, examining political, economic, social, technological, legal, and environmental factors impacting the company. The internal analysis employs a SWOT analysis to evaluate Kathmandu's strengths, weaknesses, opportunities, and threats. The report discusses the company's strengths such as its strong brand image and wide geographic presence, while also identifying weaknesses like the costs associated with supply chain networks. Opportunities include expanding the online market share, and threats include high competition and licensing issues. The report concludes with an overview of the key findings and offers strategic recommendations for the company's future.

Kathmandu
Student Name
Course Name
Date of submission
Table of Contents
External analysis..............................................................................................................................1

Kathmandu
Pestle analysis of Kathmandu......................................................................................................1
Internal analysis...............................................................................................................................3
SWOT ANALYSIS......................................................................................................................4
Conclusion.......................................................................................................................................5
References........................................................................................................................................6
1

Kathmandu
External analysis
In strategic management, the external analysis is considered as the study of the external factors in
relation to the business environment. The external environment analysis is considered as the
important input that is related with the strategy formulation. In context to external environment,
Pestle analysis is one external environment analysis tool that emphasizes on the different factors
such as Political, economic, social, technological, environmental and legal spheres. These are the
important factors that assist in controlling the functional operations of the business and also
provide in-depth analysis of the external business world. It is necessary for the organizations to
focus on analyzing the Pestle analysis tool so that it could be easy to know about the external
environment. It is considered as the wider business environment concept that impacts the
business and also provides direction to the organization to consider the accurate steps for
attaining growth in the competitive market (Rastogi & Trivedi, 2016).
Pestle analysis of Kathmandu
 Political factor
It is examined that there is political stability in New Zealand and due to this the company has
attained the opportunity to grow in the market. Due to political stability the Kathmandu has
enhanced the overall operations of the business. But it has been analyzed that strict regulations
implemented by the New Zealand government has also affected the activities. The New Zealand
government is also emphasizing on trading on the international level, as it can assist the
companies in boosting the success ratio (Knoke, 2018). For Kathmandu, the preset political
situation is favorable but organization need to focus on considering the political decisions
(Kathmandu, 2019).
In New Zealand, the risk of the military invasion by the hostile countries can cause the
disinvestment from the different ventures. The lower minimum wage has also boosted the profits
which have led to the overall survival of organization in the competitive market. It is observed
that the country also have well defined investment policy and the support from the government
has boosted the free trade and offered the investment opportunities in relation to green
technology. So, it can be said that the company has the opportunity to boost the business
operations in relation to the political situation of the company in the competitive market area
network (Hamilton & Webster, 2018).
2

Kathmandu
 Economic factor
Economic stability and also effective governance has also translated the economic sphere. The
company has enjoyed the long stable economic conditions that have given an opportunity to
attain growth in the market. Kathmandu has easy entrance to the different markets and also there
is accessibility of the fluidity in the equity market of New Zealand that has assisted to expand in
the market. The exchange rate of New Zealand can affect the investment plans not only for the
short term but for long term. There are different factors that impact the growth of the Kathmandu
business. By considering the factors and figures, the economic factor of New Zealand is
favorable and due to this the company can easily manage the overall activities (Crane, Matten,
Glozer & Spence, 2019).
 Socio cultural factor
It is analyzed that society has an important part in the success of business. In relation to the
social factor, the company targets the customers from the middle and high class. It has been
examined that New Zealand is a good place for the people and it is 5th country out of 187
countries. The company focuses on introducing the new trends in the market and due to this they
have attained growth in the market. The people living in New Zealand are more focused towards
maintaining their living standards so the company has the opportunity to grow in the market by
introducing the new trends in the market. So, the socio cultural factor of the country is favorable
for the company in relation to the overall growth in the competitive market (Bailey, Price,
Pyman & Parker, 2015).
 Technological factor
Kathmandu focuses on maintaining the eye on the overall growth of the user experience with the
enhancement in the speed and access. It has been observed that this has also transformed the
overall customer experience. Technology has affected the product life cycle and it has also
enabled the suppliers to create new services in the market. This has enhanced the burden on the
Kathmandu different departments in relation to keep the suppliers happy by encouraging the
diverse range of the products. It has added more cost in relation to the overall activities of the
company. The technological innovation has also fast disrupted the supply chain as it is offering
3

Kathmandu
the proper access of data to the partners of the supply chain but to the wider players in the same
sector (Luo, Shi & Venkatesh, 2018).
 Legal factor
The company enjoys the simple tax laws and the major attractions of the country are to maintain
fairness and simplicity. New Zealand provides effective tax benefits for the investor’s earnings.
The government has curbed the corruption from society so that company is enjoying the basic
facilities that are important for achieving growth in the market. In New Zealand, trade freedom
has also considered by the company that has helped the company to flourish in the society. The
legal policies of the country have been designed in such a manner through which it is simple for
the organization to boost the success rate in the market. So, it can be seen that company has the
chance to achieve success as there are no strict legal rules and regulations that should be
considered by the company. Kathmandu can maintain the overall activities by considering the
legal rules in relation to the activities of the company (Murray, 2017).
 Environmental factor
There are different factors related to environment that are considered by organization in relation
to the overall operations of the business. The company focused on project polybag in which
Kathmandu emphasized on producing waste at unprecedented rate. Plastic is important
environmental concern that has been considered and in 2016, Project polybag initiative is
considered that aimed to recycle 100% of the plastic polybags across the 165 stores. It is one of
the largest plans to send zero waste to the landfill by 2020 (Kathmandu, 2019). The company is
also dedicated to minimize the environmental footprint through 5 star green buildings and also
recycling programs are considered by the company. The Green star standard is an international
recognized sustainability rating system that focuses on innovation and also on the indoor
environmental quality. This is one of the best strategy that is considered by the company and this
help in maintaining the overall environmental standards (Kathmandu, 2019).
Internal analysis
Internal analysis has an important part in context to the business operations. The internal
operations of the company determine the strengths and weakness. The strength allow the
4

Kathmandu
company to consider the advantage of the opportunities that exist in the market but on the other
hand weakness showcase the potential threats to the company and also it limit the strategies that
is present to the company (Blockeel, Drakopoulos, Santos-Ribeiro, Polyzos & Tournaye, 2016).
The internal factors are related with the controllable factors because the organization emphasizes
on having control over the factors. In strategic management, internal analysis consists of the
firm’s own resources and capabilities. So, the internal analysis can also be elaborated with the
help of SWOT analysis tool that helps to find out the strength, weakness, opportunities and
threats (Phadermrod, Crowder & Wills, 2019).
SWOT ANALYSIS
 Strength
The strength of the company relates with the first mover advantage. It has been seen that
company has a good image in the market which helps in boosting the demand of the products
and services. The extensive product offerings have also assisted the company to penetrate in the
different customers segments and due to this the company has diversified into the different
revenue streams. The wide geographic presence is also one of the strength for the company. It
has been examined that company has the extensive dealer network that not only offers efficient
services but also assist in controlling the competitive challenges in the retail sector. Kathmandu
also has the strong market leadership position that helps to maintain the overall scale of the new
products offered in the market (Kathmandu, 2019). Therefore, the company has these overall
strengths through which they compete in the highly business world.
 Weakness
The weakness that relates with the company is concerned with the extra cost of building the new
supply chain and logistics network. The internet and artificial intelligence has also altered the
business model in the service sector. This has also impacted the overall supply chain network of
the Kathmandu. In the present business environment, it is necessary for the company to consider
the robust supply chain network which can be one of the expensive processes (Scott, 2017).
 Opportunities
5

Kathmandu
The company has the opportunity to grab the large market share on the online platform. The
increasing adoption of the online services by the customers can help the company in offering the
new products and services on the global platform. It is important for Kathmandu to grab the
opportunity of attaining the large market share by reducing the prices of the products and also by
introducing the new products in the market. The company can also focus on local collaboration
through which it would be easy to grab the large customer base in the competitive market
network (Schaltegger, Burritt & Petersen, 2017).
 Threats
The threat which that exist in the business is due to the high level of competition present in the
market. There are huge ranges of competitors that are present in the market so it creates
difficulty for the company to attain growth. The organization faces the issue in context to
licensing agreement and it has affected the overall growth in the market and can also impact the
profitability ratio (Lawton & Rajwani, 2015). So, it can be said that these are the threats that can
affect the business operations.
Conclusion
By analyzing the paper, it can be concluded that there are various threats that are faced by the
company. The company has stable political framework through which it could be easy to manage
the operations of the business. The technological factor has also boosted the scope of attaining
the large market area and this has also lead to the high profitability in the business environment.
It is also examined that strength of the company relates with the good brand image which has
also helped in accomplishing the set goals and objectives. The major threats faced by the
company is due to the high competition level, so it is important to be managed by introducing
new products at low price. Therefore, it can be said that the company has the scope of attaining
the growth in the market.
6

Kathmandu
References
Bailey, J., Price, R., Pyman, A., & Parker, J. (2015). Union power in retail: Contrasting cases in
Australia and New Zealand. New Zealand Journal of Employment Relations, 40(1), 1.
Blockeel, C., Drakopoulos, P., Santos-Ribeiro, S., Polyzos, N. P., & Tournaye, H. (2016). A
fresh look at the freeze-all protocol: a SWOT analysis. Human reproduction, 31(3), 491-
497.
Crane, A., Matten, D., Glozer, S., & Spence, L. (2019). Business ethics: Managing corporate
citizenship and sustainability in the age of globalization. Oxford University Press.
Hamilton, L., & Webster, P. (2018). The international business environment. Oxford University
Press.
Kathmandu (2019). About us. Retrieved from : https://www.kathmandu.co.nz/
Kathmandu (2019). Green star buildings. Retrieved from : https://www.kathmandu.co.nz/get-to-
know-us/our-footprint/environmental-impact/green-star-buildings
Kathmandu (2019). Project Polybag: Our Progress with Soft Plastic. Retrieved from :
https://www.kathmandu.co.nz/summit-journal/sustainability-behind-the-label/project-
polybag
Knoke, D. (2018). Changing organizations: Business networks in the new political economy.
Routledge.
Lawton, T. C., & Rajwani, T. S. (Eds.). (2015). The Routledge companion to non-market
strategy. Routledge.
Luo, W., Shi, Y., & Venkatesh, V. G. (2018). Exploring the factors of achieving supply chain
excellence: a New Zealand perspective. Production Planning & Control, 29(8), 655-667.
Murray, G. (2017). Capitalist networks and social power in Australia and New Zealand.
Routledge.
7

Kathmandu
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based
SWOT analysis. International Journal of Information Management, 44, 194-203.
Rastogi, N. I. T. A. N. K., & 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), 384-388.
Schaltegger, S., Burritt, R., & Petersen, H. (2017). An introduction to corporate environmental
management: Striving for sustainability. Routledge.
Scott, P. (2017). Geography and retailing. Routledge.
8