Strategic Analysis and Business Strategy for Q Sporty Footwear

This report provides a comprehensive strategic analysis of Q Sporty, a UK-based athletic footwear company. It begins with an overview of the company's mission, vision, and corporate objectives, followed by a situational analysis that includes macroeconomic (PESTLE) and industry (Porter's Five Forces) assessments. The report delves into Q Sporty's internal environment using the McKinsey 7S model and SWOT analysis to identify strengths, weaknesses, opportunities, and threats. The analysis covers factors such as market competition, technological advancements, and customer preferences. The report also examines corporate social responsibility, TQM and offers recommendations for future strategic direction, including milestones and leadership considerations. The analysis is structured to provide a detailed understanding of Q Sporty's current position and future prospects within the competitive athletic footwear market.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
Vision and Mission Statements along with the Corporate Objectives.............................................2
Situational Analysis.........................................................................................................................3
Macroeconomic Analysis – environmental scanning .................................................................3
Industry and Sector Analysis.......................................................................................................4
Observations................................................................................................................................5
Internal Analysis..............................................................................................................................5
McKinsey 7S Model....................................................................................................................6
SWOT..........................................................................................................................................7
Implementation of the Marketing Strategy......................................................................................8
Design, Style and Quality issues; TQM.......................................................................................8
Corporate Social Responsibility and Citizenship............................................................................9
Recommendations for Future Strategy - Milestones and Leadership..............................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy is the long term course of action devised by an entity with the sole
motive of attaining a competitive edge and staying ahead of the competitors present in market
place. The Global athletic footwear sector is rising at a substantial pace and is reported to have
undergone a massive growth in last some years. The incorporation of wide array of product
categories is being done by top notch companies conducting their operations in this corporate
sector. Segmentation of products in this sector takes place to segregate offerings as per product
type (Sports Shoes, Hiking and back-packing shoes, Running and/or walking shoes, Aerobics and
gym wear shoes), geographies (North America, Europe, Asia-Pacific, LAMEA) and users
(males, females, children).
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Il
lustration 1: Global Athletic Footwear Market (BY FORM)
Ill
ustration 2: Global Athletic Footwear Market (BY USER)

In this regard, technological advancement is regarded to be one of the key opportunities
available to the entities with the exploitation of which they can inflate their current market
positioning and brand value. Customers are also intending to pay more upon footwear looking
upon the usage of high quality raw materials and machinery for the production of products which
can ensure comfort and convenience for people. The present project is based upon the strategic
analysis of Q Sporty which is a renowned athletic footwear corporation operating within the
confines of United Kingdom. The reports includes strategic tools and techniques such as SWOT,
PESTLE, Porter Five Forces, McKinsey, SWOT, TQM and other key tools of external and
internal business environmental analysis.
Vision and Mission Statements along with the Corporate Objectives
Q Sporty is a company operating within athletic footwear industry. It sells over 5 million
pairs annually. In the recently completed year, this company earned an overall revenue of $238
million together with net earnings of $25 million which is equivalent to $2.50 per share of
common stock. The respective entity is in a sound financial condition and its offerings are well
renowned among people. In this regard, the Mission, Vision and corporate objectives of Q Sporty
are given as underneath:-
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I
llustration 3: Global Athletic Footwear Market
(BY GEOGRPAHY/REGION)

Mission: “To design and develop products in accordance with what matters the most to
customers.”
Vision: “To become the most valued company in the eyes of customers, community and
stakeholders.”
Corporate Objectives: Each year, the management of Q Sporty reviews and alters the
objectives of organisation as per the internal and external business environment as well as market
situations. In this regard, the corporate objectives stipulated by corporation for the period ending
31st March 2020 are given as follows:- To become a market leader within the athletic footwear sector across the globe. To enhance the core business operations within the confines of United Kingdom with a
view to foster growth within domestic periphery.
 To actively indulge within social initiatives to act in the interest of community and gain
support from people across the globe.
Situational Analysis
Macroeconomic Analysis – environmental scanning
It is essential for every firm to carry out macro environmental scanning so as to identity
the probable opportunities and threats that are present within the environment and may impact
upon business conduct. In this regard, PESTLE Analysis refers to the tool which is used in order
to know about the impact of external factors on the working of an organisation. The application
of this analysis on the working of Q Sporty has been provided as under:-
Political Factors: Gaining deep insight into this factor, it can be said that irrespective of
the politically stable state of UK, Q Sporty is dealing with negative impacts owing to Brexit. This
has affected the business operations in an adverse manner as it becomes difficult for the
respective business corporation to make effective long term policies and strategies to ensure
sustainability within athletic footwear sector.
Economical Factors: The economic condition of UK is strong, which provides
opportunity to the athletic footwear company to make use of infrastructure, communication and
transportation facilities of this nation. However, the decreasing currency rates of UK tends to
create negative impact upon the growth and development of Q Sporty as it directly affects the
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revenue and profit figures within the international market. This implies an adverse influence
upon the sound financial position of Q Sporty.
Social Factors: The athletic footwear market across the globe consists of categories such
as Sports Shoes, Hiking and back-packing shoes, Running and/or walking shoes, Aerobics and
gym wear shoes. In this regard, the products provided by Q Sporty within the market are of high
quality and are well preferred by the people. This is because the offerings developed by the
respective corporation are according to the needs and preferences of people. Along with this, the
company also takes into account the tastes and preferences of their loyal customers as well as the
feedbacks provided by them. This aids the entity in attaining maximum satisfaction from clients.
Technological Factors: Q Sporty is making use of mobile technology in order to be in
touch with their customers and also to know about their tastes and preferences. This provides
assistance to the entity in providing the people with what they expect from the organisation.
Legal Factors: There are some restrictions which are made by the government regarding
advertisement of companies related to their products and services. According to Advertisements
Act, it makes it illegal to make superstitious advertisements that could divert the minds of
customers and in case anyone is found to be involved in it, they will have to face severe
consequences. Thus, Q Sporty does marketing in a manner which does not violate the provisions
of this statute.
Environmental Factors: The manufacturing procedure of Q Sporty takes place in a
manner which does not emit pollution and ensures least generation of carbon footprints. This is a
significant contribution made by it towards the preservation of nature. This ultimately results in
development of positive brand image and goodwill of the respective company not just in the
minds of customer but also among the society and competitors.
With the help of this analysis, it has been made clear that the company is dealing good
with the external environment but there are some needed improvements which are to be made by
the company so that it could remove the negative impacts of external environment.
Industry and Sector Analysis
Porter Five Force model is used in order to analyse the level of competition in the
industry and the profitability level as well. The application of this analysis on the working of Q
Sports has been provided as under:
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Competitive Rivalry: The following power is considered as high as there are large
number of competitors in the sports industry both at local and international level tat could give
tough competition to the company. On the basis of which, the power is considered as high.
Examples of competitors could be Adidas, Nike, Puma and many more.
Threat of Substitutes: Consideration regarding this power is also considered as high
because as there are large number of competitors in the company so there are also several
substitutes available for the corporation. This tends to increase the pressure on entity to provide
something unique that could provide them with more market share and increased profit.
Bargaining Power of Buyers: The magnitude of this force is high as the athletic footwear
provided by the respective company is available in the market with different organisations. This
provides buyers with the power to negotiate the price of products offered by the entity. Hence, Q
Sporty needs to maintain its prices to the level of their competitors.
Bargaining Power of Suppliers: This power is considered as low because the raw
material which is provided by the suppliers to the company are easily available with other
suppliers as well. So due to low switching costs, the power is considered as low.
Threat of New Entrants: In this industry, there magnitude of this force is moderate as
there are some barriers to enter. In this regard, first is related to operations of international
companies whereby the formation of cartels restrict entry of new firms in the industry.
Additionally, the consideration is related to goodwill and trust of people on existing brands
which does not provide any place to new entities.
Observations
On the basis of above discussion, it can be observed that even though the strong political
and economical state of UK foster the growth of companies, BREXIT is a significant factors
which negatively affects their business conduct. Further, there is extensive rivalry prevailing
within the confines of athletic footwear market which inflates the risk of substitution.
Internal Analysis
Post conduction of external analysis, it is also important for the corporation to carry out
an internal examination of resources to devise strategies in accordance with that. In this regard,
the management of Q Sporty has made use of McKinsey 7S Model and SWOT analysis to
identify the key resources, competences and capabilities.
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McKinsey 7S Model
This is an analytical framework which provides assistance to a corporation in setting a
link between the 7 key elements pertaining to a company. These are, namely, shared values, staff,
strategy, skill, style, system and structure. All of these aspects are explained in context of Q
Sporty as follows:-
Shared Value: This element illustrates the core values and beliefs held by an enterprise.
In this regard, Q Sporty possesses the belief of inflating its sophisticated management techniques
from simple production to the one which shows alignment with high quality standards.
Strategy: This aspect of McKinsey 7S Model stipulates the methods which are taken into
use by the company as an approach adopted by it towards strategic planning for attainment of its
goals. In this relation, Q Sporty also executes the implementation of strategies like Balanced
Scoreboard (BSC) method to do planning for strategic management.
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Structure: This element portrays the hierarchy executed by a corporation to conduct
business operations smoothly. With respect to this, the management of Q Sporty believes that the
implementation of top to down structure within the premises would allow the employees to work
effectively as per the requirements of entity. This plays a key role in development organisational
strategies.
System: This aspect lays down the manner in which the entity carries out its daily
operations. In relation to this, Q Sporty makes use of Steering Wheel Performance Appraisal
system. This system is regarded to be the integration of 6 measures which helps in execution of
its predefined corporate strategies to render aid to the staff.
Staff: This tends to stipulate the quantum of personnel working within the confines of a
corporation. It is with the assistance of employees that Q Sporty is able to carry out the business
operations and achieve its long term goals within the due course of time.
Style: This can be referred to as the way through which a corporation operates with a
view to attain long as well as short term objectives. In this regard, Q Sporty takes into use
steering wheel system in order to attain the corporate goals in an effective way.
Skill: It is defined as the abilities of a corporation or employees to execute a particular
activity. To facilitate this, Q Sporty conducts training and development classes whereby it
provides information about key processes in order to enrich the professional personalities of
personnel belonging to Q Sporty.
SWOT
Strengths Weaknesses
 It is a well renowned athletic
shoemaker designing and shells shoes
for a variety of sports like football,
golf, etc.
 it make use of “make to stock”
customer order technique which
provide fast delivery and service to
customers .
 Income of Q Sporty is heavily
dependent on its share of footwear
market.
 Retail sector is very price sensitive
thus, profit margins of Q Sporty tend to
get squeezed to pass or handle low
price competition.
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 Q Sporty is having a large market share
and sells its product throughout US and
in more than 180 countries of world.
 Q Sporty is very strong at research and
development thus, having capability of
providing innovative product range.
 It is a very famous and well known
global brand and number one sports
brand of the world.
Opportunities Threats
 Product development is offering many
opportunities for Q Sporty.
 Having opportunity to get developed
internationally through properly
utilising key global marketing events.
 High level of competition in market of
athletic sports shoe.
 Exposed to many political issues of
different countries.
Implementation of the Marketing Strategy
Design, Style and Quality issues; TQM
The major issue that has been identified within the confines of Q Sporty is that the quality
of products of the organisation do not match the industry standards. Thus, it is key for the entity
to implement an effective quality management technique such as Six Sigma or TQM through
which the management can effectively deal with it. Thus, looking upon this, the management of
this entity has proposed to implement TQM which is described as follows:-
Total Quality Management (TQM): This is an approach which is basically focussed upon
inflating the quality of offerings rendered by an entity. This is regarded as a customer centric
approach looking upon the initiatives taken by an enterprise to improve the quality of products
and thereby appeal to customers in a better manner. With respect to Q Sporty, the application of
this operations management technique would render aid to an entity in dealing with the issue of
quality prevailing within the confines of an enterprise.
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Corporate Social Responsibility and Citizenship
Corporate social responsibility (CSR) can be broadly referred to as a form of global
private corporation self regulatory move which is largely aimed at giving a significant
contribution towards the welfare of society as well as environment. Also, it encompasses the
engagement in or providing aid within volunteering or ethical procedures as well as practices. It
is a key aspect that needs to be taken into consideration by each and every firm so that it can
develop a positive image in the mindsets of people. With respect to this, it is significantly
essential for Q Sporty to make CSR an integral component of the business and incorporate it into
business model of the firm. In this relation, post realising and recognising the significance of
indulging in CSR activities, the management of the entity ensures that it contributes significantly
towards the welfare of society as well as environment.
Recommendations for Future Strategy - Milestones and Leadership
Major changes keep on taking place within the confines of a company with the passage of
time. In this regard, one of the key changes that take place is the technological advancements
which dominate the market and industry. Quality is the issue that has been identified in context
of Q Sporty and thus a change management approach is adopted to bring about new technology
within the confines of the respective entity which would provide aid to the enterprise in dealing
with quality issue.
Lewin's change management model is utilised to consistently execute technological
renovation in Q Sporty. This will assist the organisation to engage existing clients and pull new
customers, and thereby, it will maximise profit and sales margin of business for prolonged
period. Lewin's change model consists of three phases which are elaborated as under:-
Unfreeze: The first phase of change model assures that company starts preparing its
workforce for the adapting proposed change. In the context of Q Sporty, company engaged its
financial department to collect funds for implementing technological change. For this purpose,
enterprise searched the production areas where change was required to boost productivity and
discovered. This has provided aid to the management of respective entity to attain competitive
advantage in market place and thereby stay ahead of the rival firms operating within the confines
of same corporate sector.
Change: This stage of the change management model witnesses the execution of
proposed change within the respective company. For this purpose, the major role is played by the
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