Strategic Capabilities and Decision Making at French Connection PLC

This report provides a strategic analysis of French Connection PLC, focusing on its internal and external environments. The report utilizes various strategic frameworks including PESTLE analysis, Porter's Five Forces, SWOT analysis, and the strategy clock to assess the company's capabilities and market position. The PESTLE analysis examines political, economic, social, technological, legal, and environmental factors impacting the business. Porter's Five Forces assesses the competitive landscape. SWOT analysis identifies strengths, weaknesses, opportunities, and threats. The strategy clock is used to evaluate strategic positioning. The report concludes with recommendations and justifications for strategic decisions, emphasizing the importance of adapting to the dynamic retail environment and leveraging the company's strengths to achieve its vision of becoming a world-class brand.

STRATEGIC DECISION
MAKING

EXECUTIVE SUMMARY
This report is about taking decisions on the strategic capabilities of an entity as the focus
of an enterprise owner lies on the existing condition of the business. French connection plc has
chosen for the current report that includes use of SWOT, PESTLE, Porter's FIVE forces and
strategy clock used by a company. SAFE analyse has used that cover each and every aspects
appropriately in order to determine the existing capabilities of an entity as they are capable
enough in order to target higher market share in the external environment. Strategy clock will be
given higher preferences as this has generated higher revenue for the business.

Table of Contents
INTRODUCTION...........................................................................................................................1
Company Background............................................................................................................1
a) PESTLE analysis................................................................................................................2
Porter's 5 forces......................................................................................................................4
Threshold and distinctive resources.......................................................................................6
SWOT analysis.......................................................................................................................7
b) Strategy clock.....................................................................................................................8
c) Application of SAFe analysis............................................................................................9
d) Recommendation and justification of strategy.................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

Illustration Index
Illustration 1: Strategy clock............................................................................................................7
Index of Tables
Table 1: SWOT analysis..................................................................................................................5

INTRODUCTION
Decisions play an integral role in an entity as business strategies are crafted by an entity
owner after analysing its overall business performance. French connection plc has been selected
for the given project report. This report emphasises on analysing internal as well as external
environment of an entity by adopting various strategies in an entity.
Company Background
French connection is public limited company which is UK based retail store deals in
clothing wear and fashion accessories all around UK. This entity operates their business all
across the world as this is recognised as global retailer that sells their products or services by
capturing larger market share. Other clothing business other products in its product line includes
watches, perfumes, toiletries and glasses which are in linked with all of its products (Tseng and
Hung, 2014). The clear linkage is created among its business segments in order to cover higher
market share. Major countries where business of this entity operates are Canada, US as the
companies offers franchisees in all over the world as being a global retailer its products are also
supplied in each and every concern of countries in a world.
Vision
The vision of French connection is to change its current designation as global retailer
towards the world class brand.
Vision of an entity will be achieved in different segments that will be helpful for an individual is
given as below:
 Wide varieties clothing wear and accessories launched in the market
 Offering best pricing for all of its products or services
 Getting higher customer satisfaction level by satisfying all their needs
 Launching various programmes in order to handle complex pressures in the external
business environment.
Vision and mission created by an entity will get achieved in given span of time by
improving the existing conditions of their business. Role of an entity gets increases with the
passage of time as an entity emphasises on the needs and expectations of its internal as well as
external business environment (Shank and Lyberger, 2014). Stakeholders requirements need to
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be analysed by an enterprise owner as the strategic purpose of the business will be achieved
when all their stakeholders get satisfied with the services offered by the business n order to
attract them towards the services offered y an entity.
Mission
Mission created by an entity on the basis of vision as it provides right direction to an
entity which helps in creating its goals and the objectives according to its desired aims and
targets within a given span of time. Mission is regarded as important aspects as it give new
direction to an entity in creating is missions which are staircase in order to reach the destination
that is the vision of the company (Shank and Lyberger, 2014). The mission of the company
'French connection plc' is to keep their customers happy by keeping them updated with the trends
which will provide satisfaction and will create brand image.
a) PESTLE analysis
 Political- Political turbulences of UK need to be identified as French connection plc is
required to set up their business in the best possible manner. Tax rates of UK will be
identified as it affected the business income of an entity. Taxation is regarded as the
major aspects that needs to be considered by an entity majorly as the existing business
performance of an entity gets increases. UK interest rate presently is around 0.5% that
may affect the business operations of French connection plc are required to be assessed
properly in business context. Interest rates are essential as business borrowings can be
monitored properly. Political factors that plays a significant role in determining the
factors that can impact the profitability of French connection plc for a long term in the
certain country or the market as there are many retail sectors in the market. More the
retail markets more the choices with the customers and more the profitability loss to the
company. This factors gives political stability and importance of retails sectors in the
country's economy. There is high risk of capital, Competition and market involved in this
sector.
 Economic- Increasing or decreasing market share of business is highly depends on the
current economic environment of an entity as the role of an entity is on increasing its
overall market share. Gross domestic product of UK will highly matter for an entity as
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the existing business of French connection plc. GDP in UK as f now is 2.1% which is less
than compared to the overall inflation rate that is around 2.9% (Li and Liu,2014). An
entity located the current country need to contract its market share as higher inflation rate
will create negative changes on the overall business performance. Existing market layers
located in the UK market are not able to generate higher returns by catering all its
products or services. There is high intervention of government in the market which is
related to consumer services. The stability of currency and the exchange of the host
market has increased the scope of increase in financial condition of the company 'French
connection plc' as it also benefits the government.
 Social-Products or services are customised by an entity that will be helpful for them in
order to generate higher returns by meeting desired needs and expectations of all its
customers located in the external business environment. Socio-cultural factors such as
ethnicity while designing products will also be there in crafting all the strategy as
customers re taken as major hero for the business. Needs and expectations of all the
customers are satisfied by a business concern as their existing market share will be
achieved by emphasises on higher expectations of all the users. Products are designed by
French connection plc after analysing the current target market needs of the UK. Clothing
wear offered by this entity is for all the age groups ranging from young people towards
the old age people in the UK. Style of clothing wear are also chosen by an entity in UK
majority of people prefer to wear western style clothing starting from younger age to the
older age group people(Hill, Jones and Schilling, 2014). An entity need to analyse the
buying behaviour and pattern of all the customers that helps in creating variety of
products or services offered by an entity to all its customers located in the external
business environment. Culture of UK need to be analysed properly in relation to the
external market factors that are considered by an entity in their business. Culture is taken
as important segment in increasing the overall market share as the role of an entity needs
to be increases in order to grab higher market advantages in the external business
environment. The educational level of the employees working in French connection plc
company is standard. The company is focusing on culture and designs its products
accordingly. The people or the employees are very health and environment conscious.
They use the things and the equipments in the company which are environment friendly.
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The eco-friendly use of the technologies in the company 'French connection plc' benefits
in employee retention and maintain their health.
 Technological- Technological advancements are required to be considered by an entity
as different clothing patterns are provided to satisfy all needs and expectations of various
clients. The Latest technology should be consider by French connection plc in order to
improve the existing business performance of an entity as technological pressures are
analysed at initial stage in order to improve the existing market share in the current
digital world majority of users are attracted towards a particular business by bringing
innovation or creativity in their existing products. Recycling of clothes is a unique
technique to be used by this company in order to maintain their survival for long period
in this particular industry.
 Legal- legal requirements are required to be fulfilled by an enterprise owner located in
UK as European laws and regulations needs to be comply by an entity. Competition act
suggest that an entity need to craft its prices suitable for all the buyers as consumer
exploitation is highly prohibited by an entity in order to operates its business
appropriately. Business operation's will get improved with the passage of item as an
entity owner emphasises on the current business aims and targets in order to grab higher
market advantage (Gummesson, Kuusela and Närvänen, 2014). Wages and salaries of all
the employees will be decided according to the national wage rate of UK as legal
environment has created special mechanism according to the preferences of various
employees working in UK.
 Environmental- Environment sustainability is the major issue whose responsibilities are
required to be fulfilled by every business operated their business in UK. Probability of
occurrence of various natural disaster will help an entity in order expand or contract their
existing market share in United Kingdom. Strategic move of an entity will be based on
each and every factors considered by them while operating their business in the best
possible manner.
Porter's 5 forces
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Source : (Porter Five Forces, 2017)
 Competitive Rivalry (Higher):- French Connection have a strong competitive rivalry in
the competitive market with their competition in retail industry such as Tesco plc,
Sainsbury, Wait rose and Morrison etc (Bonczek, Holsapple and Whinston, 2014). They
all compete each other especially through promotion, price and product to attract
customers form potential target market. There should be an acceptable differentiation
among the products. The company can do so by building scales. It should collaborate
with its core competitors to increase the market size. The competitive rivalry of the
company 'French connection plc' higher because there are many new brands opening in
the market with new trends and innovation.
 Power of supplier (Higher):- There are large retail firms exists in the UK and the
limited number of suppliers available due to which the power of suppliers is high. In
regard to this, the company have to pay their suppliers what they charge for the raw
material, equipment etc. the company should build efficient supply chain with multiple
suppliers. They should experiment with the product design using the different material to
control price of raw material if needed, it will also help the company to switch the
supplier in the future. The bargaining power of the suppliers is higher towards the
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Illustration 1: Porter's five forces

company 'French connection plc' as there are various available for the raw material in the
market.
 Power of Buyers (Higher):- The power of buyer for a French connection is strong as
there are so many retail firms establish in UK. Therefore, the customers can easily shift
towards their competitor if they charged high prices for goods or services. By building a
large base of customers which will help the company to make it market position better
and stronger. Reducing the bargaining power of the buyers provides an opportunity to
the firm to streamline its sale and the production process. The bargaining power of the
buyers is higher as they have more number of companies to buy their products. Here the
company 'French connection plc' has the lower power.
 Threats from substitutes (Higher):- There is an already establishment of retail
company in UK if the French connection will increase price of its goods or services
(Abdel-Maksoud and et.al., 2015). For this, shifting from another retail company is easier
for buyer if they charged lesser prices for similar products. The company should only be
product oriented rather focusing on the services provided. It should understand the core
needs of customer and should keeping switching in the cost of the product. The company
'French connection plc' has a higher threat if their experiment with the products will not
be able to fulfil the trending demand of the customers.
 Threats of new entrants (Higher):- It is a low threats from new entrants for the French
connection PLC as it already have a loyal customer and built a strong brand image in UK
market. For this, it will take more time for new firms to make their presence in the retail
industry. The company should focus on innovation and trends of the market. The new
products not only builds the new customers but also helps to increase the economic scale
from lower to higher. It also builds the capacity and spending money on research and
development. The company 'French connection plc' has higher threats of new entrants
because they need to keep the innovation to increase the number of customers.
Threshold and distinctive resources
Strategic capabilities of an entity reflects the existing business performance of an entity
as various resource limits have set that helps an entity. Standard limits have set by an entity in
which current resource used in a business are assessed in accordance with its final outcome
generated in a business concern. French connection Plc are required to link all the resources by
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associating them with the capabilities of an individual which helps in achieving all the aims and
targets within a given span of time (Bird and Schjoedt, 2017). Distinct capabilities are differed
from one employee to another but threshold limits have decided by an entity in order to improve
the current performance of an entity.
SWOT analysis
Internal environment of an entity emphasises on its internal skills and the capabilities that
is essential factor in building its future. An employer analyses its strengths in order to grab
higher opportunities lies in the existing market as the role of an entity gets increases by
improving the overall quality of services offered by them to all the customers located in
environment.
Table 1: SWOT analysis
Strength
 Creating brand awareness all across the
world
 Worldwide stores
 Variety of products or services
 Attractive brand portfolio
 Good marketing strategy
 Capturing higher market share in the
global market.
 It is a very popular clothing company
which produces trendy outfits.
 Mainly targets young adults with a
competitive price.
 It is a global market with outlets at
many countries as it has a large share in
clothing market.
Weaknesses
 Less effective digital marketing
 Less qualified staff members
 lower sale of products
 Less customer involvement of
customers
 Fluctuating market position
 Higher costs spent on advertising
 It now tends to appeal a very particular
consumer in somewhat uninfluential
age range.
 It seems to have plateaued
 There are a lot of miscommunication
among the staff members with creates
problem in serving the customers.
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Opportunities
 Invest in similar industry businesses
 Capture weak firms in retail industry to
increase its existing business strength.
 Product endorsed by celebrities, friends
and families
 Extensions of existing brand
 Good retail distribution channels
 Higher customer satisfaction y adopting
CRM.
 They have an emotional connection
with the consumers that they are not
utilising.
 They have an opportunity to re-engage
their consumers from 90's.
Threats
 Primark giving higher competition as it
attracts majority of customers in the
UK.
 Large number of crowd of companies
lies in the external market.
 Different market players serving its
products in more affordable manner as
compared to the current entity.
 The competition has a more definitive
brand image.
 There are still some brands which do
not have the attention of the highly
influential youth market.
b) Strategy clock
Bowman's strategy clock depicts the eight different options that is associated with the
value and price of all the products or services offered by an entity. Hybrid is that approach in
which less investment is applied as the focus of an entity is on lower costs and higher value
creation.
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