Strategic Analysis of Lorna Jane: Business Management Report

This report presents a strategic management analysis of Lorna Jane, an activewear company. It begins with an executive summary highlighting key findings, followed by an introduction detailing the company's mission and goals. The analysis includes a PESTLE analysis, assessing political, economic, social, and technological factors impacting the business. A five forces analysis evaluates the competitive landscape, while the industry life cycle is examined to understand the company's position. The report also explores strategic group formation, competitive advantages, and strategies for building and sustaining them. The analysis covers business-level strategies and the company's current life cycle stage. Finally, it explores integration and diversification strategies, drawing conclusions based on the findings. The report uses Hill et al.'s Strategic Management text as a reference.

Lorna Jane
Strategic Management Analysis
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Strategic Management Analysis
Table of Contents
Executive Summary...............................................................................................................................2
Chapter 1...............................................................................................................................................3
1.1 Introduction.................................................................................................................................3
1.2 Mission........................................................................................................................................4
Chapter 2 SWOT Analysis....................................................................................................................4
2.1 PEST Analysis.............................................................................................................................4
2.2 Five Forces Analysis....................................................................................................................6
2.3 Industry Life Cycle Analysis.......................................................................................................7
2.4 Strategic Group Formation..........................................................................................................8
Chapter 3 & 4........................................................................................................................................9
3.1 Competitive Advantage...............................................................................................................9
3.2 Building Competitive Advantage.................................................................................................9
Chapter 5.............................................................................................................................................11
5.2 Business-level Strategy..............................................................................................................11
Chapter 6.............................................................................................................................................12
6.1 Life Cycle Stage........................................................................................................................12
6.2 Non-Pricing Competitive Strategy.............................................................................................12
Chapter 9.............................................................................................................................................12
9.1 Horizontal Integration Strategy..................................................................................................12
9.2 Vertical Integration Strategy......................................................................................................12
9.3 Diversification...........................................................................................................................13
Conclusion...........................................................................................................................................13
Bibliography........................................................................................................................................14
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Strategic Management Analysis
Executive Summary
In this report, we studied about Lorna Jane an activewear store and e-commerce retailer
from their strategic management perspective. Following are the key findings of our research-
 The company has established a high-quality activewear brand for women for the past
30 years.
 The mission of the organization is to empower women to live a life through active
living and practicing Move, Nourish and Believe in their daily lives.
 The land use regulation “Planning and Zoning” affects the retail industry due to the
limited availability of storage space.
 The clothing industry is expected to witness an overall growth of more than 20%
between 2015-20, where the largest proportion is expected to be contributed from
online sales.
 The competition in the industry is quite intense and the entry barriers are low.
 The bargaining power of customers, as well as suppliers, is strong.
 The industry has witnessed tremendous growth over the past few years due to the
increasing preference for comfortable clothing for exercising and casual wear.
 Most of the strategic groups in the activewear industry are developing their brand
image as the main strategy.
 The company itself is at the maturity stage and applying product proliferation
strategy.
 Being part of a fragmented industry Lorna Jane is focusing on value innovation.
 It has not undertaken horizontal or vertical integration yet but is focussing upon
related diversification.
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Strategic Management Analysis
Chapter 1
1.1 Introduction
Founded by Lorna Jane Clarkson and Bill her husband, Lorna Jane is a retail company
dealing in women’s activewear. Headquartered at Brisbane the company has physical stores
across 14 countries along with an e-commerce website that ships across the globe. The
company has established a high-quality activewear brand for women for the past 30 years.
Every garment has been tested through real-life feedback by women staff of the company that
constitutes 90% of the total manpower. There is a total of 125 stores in Australia, 32 in the
United States and many others in China, New Zealand, Canada, and Singapore. In 2016 the
company reported $195 million of turnover with reported sales growth of 4.4% (Waters,
2018)
1.2 Mission
The activewear from Lorna Jane encourages women to feel comfortable and confident
while doing work out. The mission of the organization is to empower women to live a life
through active living and practicing Move, Nourish and Believe in their daily lives. They
design activewear that changes the way women live and think by being more active. The idea
of the brand started from swimwear and the owner and her team have evolved trends for
activewear over time. The organization aims to make women fearless, committed towards
health, compassionate and impactful (Lorna Jane, n.d.). The mission statement encompasses
the key objective of the company of spreading the popularity of activewear and brings a
culture of health consciousness that will indirectly support the sales growth of the
organization.
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Strategic Management Analysis
Chapter 2 SWOT Analysis
2.1 PEST Analysis
Since the company is based out of Australia we will conduct a PESTLE analysis from
Australia’s macroeconomic point of view. The factors that are relevant for the organization is
political, economic, social, and technological.
Political
Political factors are the government interventions made in the industry. This can be from the
government’s policies, political events that define stability or instability in the political
environment. The land use regulation “Planning and Zoning” affects the retail industry due to
the limited availability of storage space. This regulation directly impacts enhancement or
reduction of competition in the clothing industry. This may have a negative impact as the
space allotted for opening stores might not match up with the preferred shopping location of
the customers (Commonwealth of Australia , 2011).
Economical
The clothing and retail industry of Australia is affected by consumer behavioral changes in
the past five years. Increasing competition, brand consciousness, and spending patterns had
an impact on the clothing industry by an increased annualized revenue of 1.8% in 2019-20
(IBIS, 2019). According to (Gryffith, 2017), the industry is expected to witness an overall
growth of more than 20% between 2015-20 where the largest proportion is expected to be
contributed from online sales.
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Strategic Management Analysis
Social
In a country like Australia where sports are given utmost importance, there has been a
phenomenal growth in popularity of activewear. The awareness about physical fitness and
comfort provided by activewear makes them an anywhere and anytime wearable items.
Technological
The fabric technology incorporated in the activewear is the key driver of popularity in the
industry. Women also tend to rely on trends showed online and on social media for their
design preferences. Social media influencers are these days driving fashion choices and
preferences of women (O’Sullivan, et al., 2017).
2.2 Five Forces Analysis
Porter’s five force analysis is carried to measure the industry’s attractiveness and
profitability. Being a participant in the clothing industry Lorna Jane needs to critically assess
its competitive strengths and weaknesses and craft its business strategy accordingly.
Rivalry among established firms in the industry
The competition in the activewear industry of Australia is quite intense. The increased
consciousness about the benefits of activewear during sports and work out has given a boost
to sales of various other brands. Some of the big players in the activewear industry are-
 Dharma Bums
 Fire and Shine
 L’urv
 Pink Punk Active
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Strategic Management Analysis
 The Upside Sport
 This is First Base
 PE Nation
 Nimble
(harpersbazaar, 2019) (Griffiths, 2016)
Risk of entry
Since the access to technology and raw material for entering into the activewear industry is
easy and there is growth in market demand the threat of entry of new players in the market is
high. The organization may face intense competition from the new entrants that comes up
with the latest technology and designs of activewear and charge competitive prices for their
products.
Power of complement providers
People often tend to believe that activewear and sportswear are one and the same. Sportswear
is made to fit the specific needs of a sport while activewear is more of an exercising as well
as casual apparel.
Bargaining power of customers
Since there are several other brands in the market offering equally good activewear options at
competitive pricing and purchase offers the consumer holds a dominant buying power
Bargaining power of suppliers
The industry is more inclining towards sustainable activewear. Thus there is a high demand
for raw material which gives the suppliers strong bargaining power.
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2.3 Industry Life Cycle Analysis
The activewear industry in which currently Lorna Jane operates can be categorized as
a growth industry. The industry has witnessed tremendous growth over the past few years due
to the increasing preference for comfortable clothing for exercising and casual wear. Since
very few companies have built economies of scale and brand loyalty it is quite easy for new
entrants to enter the market and prosper by providing quality wear at reasonable prices. The
growing industry participants have the fierce threat of competitors but as the new participants
get easy entry into the market the competitive rivalry does not develop.
Thus, Lorna Jane Private Limited faces tough competition in the market but also has
immense growth opportunities by having a competitive edge through supreme quality and
competitive pricing. Since the industry is having an ever-increasing number of participants it
is likely that soon the life cycle may reach an industry shakeout stage.
2.4 Strategic Group Formation
The strategic groups are formed when companies operating in the same industries
pursue similar strategies. The formation of strategic groups does not let the company have a
product differentiation and the customers tend to confuse all the products as substitutes. The
opportunities and threats also vary with each of the strategic groups. Thus different
competitive forces decide the competitive environment in which the company will operate.
In a retail industry generally consumers tend to buy from the best quality goods sold at a
competitive price, brand loyalty has not developed for a majority of the consumer group, thus
the activewear industry is highly prone to the formation of strategic groups. Most of the
strategic groups in the activewear industry are developing their brand image as an activewear
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clothing line providing sustainable apparel. These are wearable and stylish clothing that can
look presentable on casual outings. The activewear industry participants in Australia are
adopting a strategy of providing superior clothing with premium pricing and occasional
discount offers (The Green Hub, n.d.).
Chapter 3 & 4
3.1 Competitive Advantage
A competitive advantage is a factor that enables a company to earn a profit that is
more than the industry average. A sustained competitive advantage helps the organization to
survive in the intense competition in the long run. Competitive advantage is an outcome of a
strategy and results in long term profitability and growth. The competitive advantage might
result from distinctive competencies, resources, process knowledge, social knowledge, tacit,
organizational architecture, and intellectual properties. The strengths in terms of resources
can be measured through VRIO, i.e., values and rarity of the resources applied in the
industry. A sustainable competitive advantage through resources can be secured by using rare
resources for production and applying barriers to imitation through maintain confidentiality
and securing intellectual property rights.
Lorna Jane through innovative designs and using quality fabrics can provide comfort solution
which is superior to other brands in the industry. It can also apply the latest designs in print of
its clothes to make them more fashionable and relevant. Through building core competencies
Lorna Jane can perform extremely well and achieve its mission and objectives in the long
run. The company has 30 years of experience in activewear clothing and thus can sustain the
stringent industry rivalry. The company can by recognizing its shortcomings in a situation
and inherent weaknesses, define the best possible strategy that can be practically
implemented (Clark, 2014).
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Strategic Management Analysis
3.2 Building Competitive Advantage
Resources and competencies are the factors of production that can help in generating
competitive advantage if they are able to produce differentiated products that are not usually
produced by other companies in the market.
Following are the building blocks that can help in generating a competitive advantage for an
organization-
 Superior quality and reliability
Superior quality can be said to be achieved when the product constitutes of the
following attributes-
1. Form
2. Features
3. Performance
4. Durability
5. Reliability
6. Style
7. Design
When these attributes provide better utility than the products of the rivals it can be
said that the product is able to deliver superior quality. Reliability is achieved when
the product is produced defect-free and meets the features claimed. Reliable products
also save employees time and cost of reworking and the reputation the market also
does not gets hampered due to poor customer reviews (Izogo & Ogba, 2015).
 Superior efficiency
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Strategic Management Analysis
Efficiency can be achieved through employee productivity and capital productivity.
The output produced per employee and the output produced per dollar of the capital
can be enhanced through continuous planning and implementing measures for
improvement in the quality and efficiency of the resources deployed (Izogo & Ogba,
2015).
 Superior customer responsiveness
The customer response time measures the period of time within which customer's
queries are resolved. The customer responsiveness should be consistently improved in
order to build trust within the customers and build brand loyalty (Chavosh, et al.,
2011).
 Superior innovation
Innovation can be achieved through product innovation and process innovation.
Product innovation can be achieved through introducing innovative features that
enhance the comfort level and fashion quotient of the activewear and through process
innovation cost-effectiveness and supreme quality can be achieved.
Chapter 5
5.2 Business-level Strategy
Being part of a fragmented industry Lorna Jane is focusing on value innovation. There
are several small and big sized market players in the industry and Lorna Jane through years of
research on trends and needs of women has developed its activewear clothing line that
provides a one-stop solution to every kind of comfort needs of women. The company is
providing top to bottom activewear clothing at reasonable pricing that justifies the value of
money. Every new apparel launch has some unique feature about itself that differentiates
itself from other products in the market. The garment fit and its fabric makes the one wearing
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it feel better and move around comfortably in a better way. They continually research their
products and become a leader in the evolution of new activewear trends (Lorna Jane, n.d.).
Chapter 6
6.1 Life Cycle Stage
The industry trends as discussed in Chapter 2 and the company’s history and current
scenario suggest that the company is currently at its maturity stage. Since the company was
formed in 1989 and has already established its name in the market and now facing
competition given by new entrants it can be said that the company has now entered the
maturity stage in which it has to maintain its leading position through bringing continuous
improvements (Dempsy, 2018).
6.2 Non-Pricing Competitive Strategy
The company has adopted the Product Proliferation strategy. It is providing discounts
and other offers on various products but does not pursue this as the only strategy for growth.
It has established its name in every product required in a woman’s activewear wardrobe such
as sports bra, thighs, tanks, tops, shirts, dresses, etc. Thus, despite taking advantage of being
an old player in the market and reducing the price the company is creating an entry barrier
through improving the attributes of its products.
Chapter 9
9.1 Horizontal Integration Strategy
Horizontal integration includes expanding in the same line of business through
mergers and acquisitions. So far Lorna Jane has grown organically.
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