Strategic Analysis of Redbubble's Business Operations and Environment

This report provides a comprehensive strategic analysis of Redbubble, an online marketplace for user-submitted artwork. The analysis begins with an introduction to strategic analysis and its importance for understanding an organization's environment. The report then delves into an external analysis, examining political, economic, social, technological, and legal factors influencing Redbubble. It also includes an industry environment analysis using Porter's Five Forces, assessing the bargaining power of buyers and suppliers, the threat of new entrants and substitutes, and the rivalry among existing competitors. The report identifies Redbubble's competitors, opportunities, and threats. The internal analysis examines the company's resources, capabilities, marketing strategies, and core competencies. Finally, it applies the VRIO framework to evaluate Redbubble's competitive advantages. The report concludes with a summary of key findings and insights into Redbubble's strategic position.

Strategic analysis

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
External analysis.........................................................................................................................1
PART 2............................................................................................................................................5
Internal analysis..........................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic analysis can be defined as a technique of process that helps an organisation to
understand organisational environmental and its factors that can impact on its performance. Re
bubble is a global online market place who provides customized products with original art work
including T-shirts, hoodies, leggings and cushions etc. This study will cover and show about the
importance of environmental analysis for an organisation. Environmental analysis includes
internal and external analysis by which the company identifies its strengths, threats and other
external factors that affects its activities and performance in positive as well as in negative
manner (Morden, 2016). It includes socio-cultural, economic, political and technological factors
and competitors of the company that create threats and rivalry for the company. This report will
also show about the resources and capabilities of an organisation that supports them in achieving
their determined goals.
PART 1
External analysis
Strategic analysis can be defined as a process that includes business environment in
which an organisation operate. It plays an important role for companies to formulate strategic
planning for decision making.
Business background and industry
Redbubble is a global online free market place public corporation for print on demand
products based on user submitted artwork. This company was founded 13 years ago by Martin
Hosking, Paul Vanzella and Peter Styles in 2006. Headquarter of this company is in Melbourne,
Victoria, Australia. This company mainly operates on internet and allows their members to
provides and sell their artwork as decoration on several products on its website such as: duvet
covers, cushions, T-shirts, Skirts, Stickers, leggings and Scarves. It also offers free membership
to those artists who maintain the copyright to their art/work and have the liberty to regulate their
own prices. It has 170 employees and it is listed on the Australian Stock exchange in may 2016.
It has been reported in January 2017 that 450,000 active artists and 10 million site visits
[er month. In last 10 years around 7 million people have purchased products from the site.
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Environmental analysis
Environmental analysis is an important tool for an organisation as it helps the company in
order to identify all external factors that can influence and affect the company's performance.
This external analysis includes: Social factors, political factors, economic factors, technological
etc.
Political factors: There are various political factors that impact on Redbubble company's
long term profitability. It is dynamic software and service industry that operates in more than
dozen countries so political stability and diversifying the systematic risks of political
environment impact on this company. Trade regulation and tariffs related to service & software
may have impact on its performance (Abushova, Burova and Suloeva, 2016).
Economic factors: It operates in various countries so the different types of economic
system and their stability impact its activities. This company can also use country's economic
factors including consumer spending and growth rate in order to forecast the growth trajectory.
Unemployment rate, labour cost and education level of skill force in service and software
industry may have impact on its performance.
Social factors: It includes society's culture and the way of doing things in particular
country and society impact on the culture of the company. Attitudes of people like health,
environmental consciousness and their shred beliefs play an important role in deciding the
marketing message for software and service industry consumers.
Technological: Technology is increasing rapidly and over the last five years this industry
has been transforming very fast due to advanced technology. It impacts on its performance on a
positive manner as it does not even give the chance to its competitors and established players to
cope up with the changes. It has impacted on its product offerings (Karvonen and et.al., 2016) .
Environmental: Different markets have different environmental standards that can have
impact on Redbubble's profitability in those markets. Climate change, weather and laws
regulating environment pollution of different countries impact on its operations. It is important
for this company to focus on waste management and recycling to satisfy environmental laws.
Legal: There are various laws and regulations that can impact on its performance in
positive and in negative manner. It includes discrimination laws, anti discrimination law and
health & safety law that should be considered to the company while operating in new market
(Sridhar and et.al. 2016).
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Industry environment
Industry environment analysis is also an important tool that supports the company to
identify factors and informations about its particular competitors. It includes 5 forces such as:
buying power of customers, potential new entrants, supplier bargaining power, substitute
services and products and rivalry among its competitors (Zaheer, 2015).
Potential new entrants: New potential entrants in service and software industry brings
new ideas and innovation which put pressure on this company. New entrants and companies uses
attractive pricing strategies and tries to provide valuable products to their customers. This way of
doing things and strategies can decrease the sales of Redbubble company's profitability and sales.
Bargaining power of suppliers: Different and all the companies in this sectors usually
buy their raw materials from several suppliers. Suppliers can take advantages of their dominant
position as they can decrease the margins which Redbubble company can take and earn in the
market (Mathooko and Ogutu, 2015). Powerful suppliers in this sector use undue advantages of
their negotiation power in order to extract higher prices from the company.
Substitute products: When the new service and products have the ability to meet the
same or similar needs of customers then it can also create a threat for the company. New entrants
usually uses and manufacture substitute products for being in a competition and for earning a
market share. The company can reduce this threat by focusing on services rather than products.
Bargaining power of buyers: Buyers and customers play a significant role in developing
and profitability of the company. Buyers are often a demanding as they try to buy the best quality
products at reasonable prices. This bargaining power also put pressure on Redbubble company's
profitability for the long run. They can seek discount and other benefits from the company which
can directly impact on its performance and sales.
Rivalry among existing players: If there is a rivalry among existing competitors in this
industry then it lead to down prices and that also decreases its overall productivity. Redbubble
company operates in a software and service industry so competition can take toll on the
profitability of this company.
Competitive environment:
A competitive environment refers an external system in which a business operates and
competes. It includes its competitors and sellers who sell the same or similar products and
services that creates a high level of competition. Strategies and capabilities which are being used
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by competitors and other sellers make them able to take competitive advantages and to being in a
competition.
Redbubble find difficulties tom operate and increase their sales and profitability due to
its competitors which creates competition for this company. It has two main competitors such as:
Image kind and FineArtAmerica. Thread less is an online designer community 7 E-commerce
websites where people can submit & score slogans and designs. After submitting designs and
slogans, they are being voted upon. Those who gain higher votes Win and are printed ion limited
quantities on the products which this Redbubble company provides such as: hoodies, T-shirt and
other products. There are various direct, indirect and partial competitors who sell their products
online and on this sites.
Direct competitors sells and offers the same or similar services in a same manner to
Threadless. On the other hand, partial competitors sell the similar services in a different manner.
Whereas, Analogues competitors provides different services that provide insight on the way to
better provide Threadless's services. Its competitors make an effective strategy as they more
focus on community participation and engagement. It helps its competitors to increase overall
community engagement and improving profiles. Competitors of Redbubble have successfully
leveraged and increased user control options that includes skilled and specific artists with the
main aim of increasing community participation. They present a threat for Redbubble company
as it increases competition and tries to attract customers towards their products.
Opportunities and threats
Redbubble limited corporation has various opportunities and threats which are mentioned as
follows:
Opportunities
 There are various young professionals who live away from their home and want to get
some products in order to feel like a home and this company provides all that type of
products online so it is an opportunity for an organisation.
 Increasing purchasing power parity is also create and lead improving lifestyle that more
spend on creative and innovative interior decoration objects.
 New and advanced technologies also create opportunity for the company as it expands its
network that help them in attracting and reaching more customers.
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 Unique concept of online market place in this industry create various opportunities for
this company.
 There are the best platform as Threadless which provides opportunity to this industry's
companies to submit designs which are to be personalized on T-shirts and wall arts.
Threats
 It has threats from intense competition other popular gift stores like Presto.
 Availability of products which it sells as less & less people are not interested or not going
to art as a profession.
 There are various people of different country who do not have much knowledge about
online payment and online shopping so it can decease its sales which is a big threat.
 It online prices are higher than those products who have the same features and are
available in regular gift shops.
PART 2
Internal analysis
Resources of firm
There are various tangible and intangible resource of the company which it require to
operate. Tangible resources include inventory, vehicles, cash, investment, building etc. In
tangible assets and resources include pre paid expenses, patents and goodwill. It s intangible
resources have the greater and long term value than its tangible resource because it sells online
and it is a Website though so it does not require to have building and particular space.
Capabilities identification
Redbubble corporation use the best marketing strategy in which it uses some elements. In
its product elements of marketing strategy it reflects the solution to its customers' needs. It uses
unique product designs & features which make it able to stand out in the competitive market. In
its price element it uses price penetration strategy in which it tries to focus on setting the lower
price than its competitors. It also uses skimming and discounted pricing strategy (An and et.al.,
2016).
For promoting its products Redbubble corporation uses various channels and with the
help if its distribution partners to serve its customers' needs. It uses online distributors, traditional
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brick & mortar distribution network. Cost benefit analysis of its each channel and its own
capabilities help Redbubble corporation to develop an effective distribution plan.
Promotion elements of marketing strategy of Redbubble corporation. It can blend below
and above the line promotional strategies in order tom achieve its determined marketing
objectives. It promotional strategy includes radio, print advertising and television. Its line
promotional options includes trade-shows, direct mail campaigns and catalogues.
Core competency analysis
There are some competencies of this company and website such as critical and creative
thinking, decision making, best client services, computer competency etc. VRIO analysis is a
competency analysis model for the evaluation of the company's resources that give them
competitive advantages. This analysis and model is helpful for Redbubble to constantly evaluate
its capabilities which it posses and have.
Value: It shows the value of resources and the way of obtaining them. This company
provide innovative and new designs T-shirts and other products to its customers which add value
for their customers (Cohen and et.al., 2016).
Rarity: It shows the rareness and limitation of the resources that the company offers. Its
resources are not hard to find as there are various companies and local gifts shops that provides
this type of items and products. Its products has value but common as its resource make
competing in the market place more challenging but it is not impossible.
Imitability: It shows the ability of products and resources to imitate as if other
companies can imitate that products or not. This company's products and resource have value
and parity but it is easy to copy and are also affordable because there are various artists and
companies who hire them to make this type of products.
Organisation: Redbubble has an organised management system, structures, culture and
processes in order to capitalize on capabilities & resources.
If the company can successfully analysed and identify all four components of VRIO
model then it can take and achieve the ultimate goal of sustainable competitive advantages
(Kharub and Sharma, 2017).
Information system solution
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Information system can be defined as the activities and a set of interrelated components
that work collaboratively and together to collect and process informations in order to support
decision making. There are various types of information system such as DSS, TPS and pyramid
diagram. Organisation can be divided into middle, operational and upper level which use this
information system.
Recommendation
From the study it can be recommended that for taking competitive advantages It should
focus on customer analysis. It can make its strategies more effective when Redbubble limited
tries to understand the expectations and needs of its customers. For better customer analysis it
should follow three main steps such as it should firstly identifies its potential and targeted
customers and then it can divide them into different segments on the basis of age, needs, traits
etc. In the second step, it should collect informations and tries to identify the reason that how the
traits and needs of different group of people differ from each other. In the last step of customer
evaluation, it requires and should analysis the ways of offering products and services the needs
of targeted and segmented groups and which customer group can give them growth potential.
CONCLUSION
From the above study it has been concluded that environmental analysis tool played a
vital role for an organisation. It includes competitive analysis, internal analysis and external
analysis which helped the company to identify its strengths, weaknesses, opportunities and
threats which its competitors, substitute products and bargaining power of suppliers and
customers create. It also showed about external factors such as social, political, technological and
economic factors which also impacted and influenced an organisation's activities and
performance in positive and in negative manner. From this report it has been also analysed that
competitive analysis played a vital role in order to analyse and identify strategies and capabilities
of an organisation and its competitors.
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REFERENCES
Books and journals
Abushova, E., Burova, E. and Suloeva, S., 2016. Strategic analysis in telecommunication project
management system. In Internet of Things, Smart Spaces, and Next Generation
Networks and Systems (pp. 76-84). Springer, Cham.
An, Q. and et.al., 2016. Internal resource waste and centralization degree in two-stage systems:
An efficiency analysis. Omega. 61. pp.89-99.
Cohen, D. and et.al., 2016. Internal malware data item clustering and analysis. U.S. Patent
9,344,447.
Karvonen, M. and et.al., 2016. Technology competition in the internal combustion engine waste
heat recovery: a patent landscape analysis. Journal of Cleaner Production. 112.
pp.3735-3743.
Kharub, M. and Sharma, R., 2017. Comparative analyses of competitive advantage using Porter
diamond model (the case of MSMEs in Himachal Pradesh). Competitiveness Review:
An International Business Journal. 27(2). pp.132-160.
Mathooko, F.M. and Ogutu, M., 2015. Porter’s five competitive forces framework and other
factors that influence the choice of response strategies adopted by public universities in
Kenya. International Journal of Educational Management. 29(3). pp.334-354.
Morden, T., 2016. Principles of strategic management. Routledge.
Sridhar, R. and et.al. 2016. A Political, Economic, Social, Technological, Legal and
Environmental (PESTLE) approach for assessment of coastal zone management
practice in India. International Review of Public Administration. 21(3). pp.216-232.
Zaheer, H., 2015. How do innovative digital start-ups achieve success?: perspectives of
Australian founders.
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