Strategic Management: Apparel Group Strategic Plan Report (BUS300)

This report provides a comprehensive strategic analysis of the Apparel Group, a major retail brand in the UAE. It begins with an introduction to strategic management and its importance, followed by an examination of the company's mission, vision, goals, and objectives. The report then delves into an environmental analysis using PESTLE and Porter's Five Forces models to assess the external factors influencing the business. The PESTLE analysis covers political, social, legal, economic, technological, and environmental factors, while the Porter's Five Forces model assesses competitive rivalry, bargaining power of suppliers and customers, threats of substitutes, and new entrants. Finally, the report analyzes the company's capabilities using value chain and VRIO criteria, focusing on supply chain management and its implications. The analysis provides insights into the Apparel Group's strategic challenges and opportunities, offering a detailed overview of its current position and future prospects.

STRATEGIC MANAGEMENT:
STRATEGIC PLAN

TABLE OF CONTENTS
INTRODUCTION..............................................................................................................................1
1. Mission, vision goals and objective statements ...............................................................1
2. Environment analysis........................................................................................................2
3.Capability Analysis............................................................................................................. 5
REFERENCES................................................................................................................................. 11

INTRODUCTION
Strategic management and administration are considered as a set of administrative instruments
and approaches that are used by organization to manage challenges and also reduces impact of political
changes within organization. Many organizations and entrepreneurs have considered this task as
important for resolution of various challenges and analysing different aspects of strategic planning
(Bryson, Berry and Yang, 2010). In this context, analysis of Apparel group is taken in to consideration
which is major retails brand in UAE which has a major link with various stakeholders like manufacturers,
designer, distributor, marketer and former retailer based in Los Angeles. Overview of apparel group has
stated that it is clothing company which has been its operations in retail industry and achieved major
growth in business by enhancing the business in other parts of world. The main purpose of the
organization is to maximize profits. The major challenges which are faced by organization in this sector
was considered as rise in competition, continuous fluctuation in prices and demand of products and
fluctuation in currency exchange rates.
Various aspects of strategic planning have been taken in to consideration in order to determine the
policies of organization to face the strategic challenges in business operations. Apart from this, firm’s
situation analysis is done in which the internal and external environment of company is evaluated with
the PESTLE analysis. Moreover, vision, mission, goals and objectives are also analysed which helps in
analysing the ways through which the firm will able to develop strategic plans and actions.
1. Mission, vision goals and objective statements
In competitive business environment, every organization has to develop some specific vision,
mission and objectives through which it will able to achieve success in business operations ( Steiner,
2010). In this context, various aspects strategic planning has been discussed in order to analyse business
vision, mission and objectives of firms that supports them in achievement of growth in business
operations. In this, we have done the critical analysis of the existing mission, vision and objectives of
Apparel group.
Vision: As per the critical analysis, It is most significant statement that clearly defines the desired
strategic position of firms that it wants to achieve in the future (Grant, 2016). Analysis of apparel group
has provided an understanding that it has vision “to develop a truly global brand that provides various
growth opportunities for the organization and its workforce as well as achieving its objectives of
becoming the most preferred fashion retailer brand across the Middle East & India.” These statements
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will provide supports to Apparel group for development of strategies or taking corrective actions to
expand the company position.
Mission: From the critical analysis, It is also action statement of company that clearly defines
expectations of firm that it wants to achieve in short duration. Apparel has continued its business
operations with mission of “being a market leader in the field of value retailing. It also aims at providing
more fashionable products at affordable and competitive prices and being an innovative, cost effective
and globally competitive organization”. Moreover, they also need to achieve of customer’s expectations
and encouraging employee satisfaction by providing opportunities of growth and development for key
performers. These statements will provide supports to Apparel group for development of strategies or
taking corrective actions to expand the company position.
Objectives:
 Introduction of more unique and fashionable products as per the preference of customers.
 Increasing the market share by the 20% in every 6 months.
 Continuous improvement of the client's experience of shopping.
 Providing knowledge and increasing the skills of staff through training and development.
 Encouraging openness in the work culture within enterprise
Thus, it can be said that the Apparel group has developed an effective business aims through
which it will able to achieve it desired vision and mission in the future. It will also be able to develop
effective strategies to achieve success in business operations.
2. Environment analysis
As per the given scenario, it is essential for the company to analyse its external environment of
country in order to analyse the influence of factors on business operations (Freeman, 2010). There some
important factors which affects the business operations are determined below:
PESTLE analysis
 Political: These are considered as major important policies and rules which are developed by
government which affects the business operations of enterprise (Hitt, Ireland and Hoskisson,
2012). In order to regulate business operation in retail industry, the organization like apparel
group needs to analyse all the factors like political stability, effective employment conditions,
taxation policies and environmental laws etc. these are considered major issues which provides
negative impact on business operation of organization, therefore, the organization needs to
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adopt some important strategies so that it will be abel to regulate business operations
effectively. Political condition of country are considered as stable and it will not provide
negative impact on company's decision.
 Social: It is also an important factor that provides an understanding about various factors that
affects the decision of organization towards development of effective business plans. In this
context, the factors like perception, values, preference and prices of products will provide
major impact on demand of company's products in market (Wheelen and Hunger, 2011). In
order to develop effective strategic management plan for enhancing business operations,
Apparel group needs to analyse the preference of its targets customers towards the products
so that they will effective strategies to satisfy the needs of their customers. Social conditions
are also considered as suitable for consumers and Apparel group has major support of people
of society in expansion of business operations.
 Legal: These are also considered as factors which provides major influence on development
strategies and taking effective business decision in order to achieve business objectives
effectively (Hesterly and Barney, 2010). The legal factors include policies which are developed
by government related to regulation of business operations like taxation policy, employment
policy, health and safety at workplace etc. these legal rules are needed to be followed by
organization for smooth functioning of business operations and remove all the restrictions that
provides negative influence.
 Economical : From the effective research study, it has been analysed that the changes in
economic conditions of country will also affect the business operations of organization and
strategic plans (Moutinho, 2011). In present scenario, it has been analysed that the economy
of UK has achieved a continuous growth. As there is major contribution has been provided by
retail sector towards the GDP of nation. With the continuous growth and development in
economy, the income level of consumers has been increased continuously. Rise in economic
conditions has changed preference of people towards the quality of products and services. By
providing quality of products at appropriate prices, the organization will be attract the
customers. Economic factors that influence the company business operations are taxation
policy, economic growth, rise in demand of consumers, and increase in growth of country or
industry. Further, these factors will provide both positive and negative impact on company
strategic decision and action plans.
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 Technological : There is major impact technological factors on business operations of enterprise
as they provide a competitive advantage to enterprise in order to increase its promotion and
marketing. In this context, Continuous advancement in technology has provided various
channels of communication through which the organization is able to provide information
about its products and services to its customers. These major communication channels involves
social media, e-commerce websites etc. There are some technological changes like introduction
of online services and e-commerce websites have provided major contribution towards growth
of company
 Environmental: These are also considered as factors which are related sustaining the
environment from the effect of business operations of enterprise. These are also considered as
laws which organization needs to follow like pollution, waste management and other rules to
protect the environment. These factors are needed to be followed by organization to regulate
their business operations otherwise they will not be bale to survive in European markets.
Natural forces like climate conditions, weather will also provide an impact on consumer
decisions and will affect on sale of company.
Other than this, the porter five force model is also analysed that involves five main factors which
affects the business decision making of organization. The are various issues have been faced by company
which has been analysed with the helps of company porter five force model. These important factors
are determined below:
Porter's five force model
 Competitors rivalry:
High pressure
As per effective research, it has been analysed that there is strong competitive rivalry in retails fashion
brand which also provides negative impact on business operation of apparel group limited (Hodgkinson
and Healey, 2011). For development of effective decision, the manager of organization need to analyse
the strategies of competitors so that they will remove their impact on sales on products and services.
Currently the main competitor of apparel group is M&S which is also has wide range of clothing and
designable products under its brand.
 Bargaining power of suppliers:
Low pressure
The raw material of products are similar therefore the suppliers are not concentrated or differentiated.
The apparel group is likely a large or largest customer of any of these suppliers.
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In retail sector of UK, the bargaining power of supplier is low as there are lot suppliers that provides
there products to enterprise at effective prices and organization is able to changes it suppliers.
 Bargaining power customers:
Low pressure
The individual buyer no pressure on apparel group
Large retailers, like M&S, have bargaining power because of the large order quantity
The bargaining power customers in retail industry is considered as low as-there are lot of fashion brands
are available inn market that provides the products at competitive prices to influence the customers of
other brand (Wheelen and Hunger, 2017). It is also analysed that organization needs to provide their
products at effective prices in order to retain its customers.
 Threats of substitutes:
Medium to high pressure as there are many similar products are available in market.
Wide variety of substitute products are available in market at competitive prices which affects the sale
of enterprise in market. Therefore, the company needs to develop effective strategies through they are
able to achieve their business objectives.
 Threats of new entrants:
Medium pressure
Entry barriers are relatively low for the beverage industry: there is no consumer switching cost
and zero capital requirement. There is an increasing amount of new brands appearing in the
market with similar prices as market like products of apparel group. It is seen not only as a retail
company but also as a brand. It has held a very significant market share for a long time and
loyal customers are not very likely to try a new brand.
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3.Capability Analysis
Capability of Apparel Group can be determined by value chain and VRIO criterion. Before the
capability is analysed, it is important to understand the concept of value chain which is mentioned
below:
The process used to identify primary and support activities of an organisation that adds value to
its final product refers to value chain analysis. It involves logistics, material management and operation
management (Gereffi and Fernandez-Stark, 2016). In general terms, supply chain management is the
management of movement and storage of finished goods and raw material. Following are the
implications of value chain analysis:
 Supply system is a manageable system and can be seen as entirely closed.
 There is a requirement of co-operative buyer-supplier behaviour across the network in value
chain management.
 If there is a continuation communication between buyer and supplier, there is more likely co-
operation. This will enable them to know each other in a better manner which in turn will build
trust among them (Paras, Pal and Ekwall, 2017).
With the help of value chain analysis, Apparel Group would be able to maintain and improve its
relations with its suppliers which will increase their trust. Improved trust will improve the efficiency of
their performance. All these benefits will increase the capability of company.
Other than this, the organization also has a strong supply chain to provide product to its consumers in
different countries. The only have to make booking through online portal or company website. It is
major capability which provides profitability of enterprise With this, enterprise also have a wide
diversified consumers base through which they are able to achieve more profitability by providing
branded clothes at competitive prices.
Application of VRIO Criteria:
The framework of VRIO is used to analyse the internal resources of an organisation along with
its capabilities to attain sustained competitive advantage within the industry (Almuslamani and Daud,
2017). VRIO analysis generally stands for following four questions:
 If the resources are valuable?
 If the resources are rare?
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 Are resources costly to imitate?
 Is firm organised to capture value of resources?
If the resources of an organisation meet all the above requirements then it can bring the
sustained competitive advantage to the firm.
 Valuable: It is the first question of VRIO framework that determines whether resources of an
organisation adds value which enable the firm in exploiting opportunities and defending its
threats (Brem, Maier and Wimschneider, 2016). Resources are considered valuable if the
answer to the question is yes. However, resources of an organisation are also said to be
valuable if they help in increasing the perceived customer value to the firm. Therefore, it is
important for Apparel Group to analyse whether its resources are valuable or not. The most
valuable are things are considered as strengths of enterprise which has provided supports to
organisation in achievement of business objectives.
 Rare: Those resources that can be acquired by only few firms are considered as rare resources.
Valuable and rare resource provide competitive advantage to company. However, situation of
competitive parity can arise if same resources are used by more than few companies or the
capability of the resources are used in same manner (VRIO framework, 2017). Therefore, in
order to achieve superior performance, Apparel Group must consider rare resources.
 Costly to Imitate: If other organisations can buy or substitute resources at reasonable price
than it can be said that resource are costly to imitate. Resource can be imitated by either
duplicating or substituting. However, it is hard to imitate resources due to historical conditions,
casual ambiguity and social complexity. Therefore, Apparel group need to consider resources
that are not costly to imitate. Implications like change in customers preference, management
of budget, continuous fluctuation in business prospects.
 Organized to capture value: The resources itself do not confer any advantage for a company if
it’s not organized to capture the value from themself you look at the case of apparel group
after evaluating using VRIO analaysis (I.e. valuable/ rare/ inimitability and organized)
analysis of their capabilities is done by using the following are their strategic
capabilities:Strong global Presence, Speciality Coffee, Upscale and Cosy Atmosphere.
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Etc.
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4. Proposed Strategy for Apparel Group
In order to make development in existing company, the management has basically two kinds of
strategies which are like business and corporate. Business strategy is taken into account when the firm
wants to develop within the market where it currently operates (Lasserre, 2012). Apart from this, in
order to expand existing firm and enter in new market, corporate strategy is considered at the
workplace. As per the current case scenario, Apparel group is going to develop business in existing
market rather than developing in new. For this particular condition, business strategies are one of the
best and suitable. There are wide range of models given by different authors to develop and enhance
market share by operating in existing market instead of new one. Among several models, Porter's
generic model is one of the best and highly effectual. The reason is that, it supports to grow existing
business rapidly and meet desired aims and objectives behind this. Being a fashion retailer company, it
facing very high level of competition. By applying the porter's generic model it will become able to gain
competitive benefits and enhance profitability. Therefore, it can be suggested that Apparel group should
use Porter's generic model for gaining competitive benefits and develop existing business in current
market.
Strengths The company has a strong brand image, and is associated with good quality,
trustworthy goods that represent excellent value CF to its closest competitor M&S
Weakness Apparel group has been experiencing a downfall in profits recently and shows a fall
in its store footfall compared to its closest and strongest competitor M&S
Opportunities Apparel group's UK health and beauty ranges continue to grow, and it is
currently the fastest growing skincare retailer in the market.
Threats Owing to the strong strategic alliance of M&S with the retail giant competes on price
and its array of offering, thereby, posing a greater competitive threat to Apparel group..
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This model consists of major three strategies which are like cost leadership, differentiation as
well as focused. These all the tactics for develop existing business and achieve proposed objectives are
explained below:
Illustration 1: Porter's Generic Strategies Cost Leadership: This is first strategy where company wants to become leader in the market
with reference to cost aspect. Herein, it only considers to the cost of production and selling
among customers (Rothaermel, 2015). In accordance with this particular tactic, Apparel group
has to make cost structures where lower expenses come into consideration. Due to this
method, it will become able to provide products and services at the lower price. Therefore,
huge numbers of customers will attract towards and ultimately it able to gain competitive
benefits. Cost Focus: Second strategy of Porter's generic model is cost focus where the management
considers only costing factors. It tries to decline total cost of production by which Apparel
group become able to provide products at the lowest price as compared to its competitors
(Ward, 2012). Further, it totally ignores to other factors which are also significant part of every
organisation.
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