Strategic Management Report: Auckland Campus CX770020 Analysis of KHL

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This report provides a critical analysis of Kathmandu Holdings Limited (KHL), applying strategic management concepts, tools, and techniques. It begins with an introduction to strategic management and its importance for organizational efficiency and sustainability. The report then delves into external analysis using the PESTLE framework, evaluating political, economic, social, and technological factors impacting KHL. Following this, an internal analysis is conducted using the SWOT tool, identifying KHL's strengths, weaknesses, opportunities, and threats. The report concludes with recommendations for KHL's strategic management and sustainable business future, along with a comprehensive list of references. The analysis highlights the significance of both internal and external factors in strategic decision-making.
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Running Head: MANAGEMENT
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Management
Strategic Management
(Student details :)
6/17/2019
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Contents
Strategic Management................................................................................................................2
Introduction................................................................................................................................2
External Analysis.......................................................................................................................2
PEST analysis.........................................................................................................................3
Political factors...................................................................................................................3
Economic factors................................................................................................................3
Social factors......................................................................................................................3
Technological factors.........................................................................................................4
Internal Analysis........................................................................................................................4
Recommendations......................................................................................................................5
Conclusion..................................................................................................................................6
References..................................................................................................................................6
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Strategic Management
Introduction
This report is focused on demonstrating the ability to think critically in relation to the
application of the management concepts, tools, and techniques of strategic management. In
general, strategic management is essential for an organization to operate efficiently,
effectively and sustainably within modern business environ (Enterslice, 2017). In this
context, this report will be using the concepts of internal and external analysis of the
contemporary business environment. The selected organization over which important
management concepts and tools will be applied is ‘Kathmandu Holdings Limited’ (KHL)
(Kathmandu Holdings Limited, 2017). For instance, external analysis of KHL will be done
with the help of PESTLE tool while SWOT analysis concept will be utilized for conducting
the internal analysis of the KHL worldwide. In this way, the business environment for the
KHL will be evaluated by the application of useful relevant tools, concepts, and tactics of
management strategies. In addition, this report will also contain a definition if the concept of
both internal and external analysis within the context of strategic management.
External Analysis
While talking about the strategic management of an organization, it includes an
understanding of the strategic position of the firm while assessing strategic choices for the
sustainable future. External analysis is necessary in order to manage strategies in action.
Here, the strategic position of an organization identifies the effect of external environment,
expectation, and influence of stakeholders on strategies along with the strategic capabilities.
External analysis is also known as macro-environment analysis which assists the companies
while analyzing their external environments (Enterslice, 2017). In this way, external analysis
for strategic management is an idea utilized within the wider area of strategic management
for assisting businesses to understand where relevant organizations fit into the wider global
marketplace. Thus, an external analysis can be seen as an objective assessment of the
revolutionized world into which a company operates for having an early warning in order to
identify potential risks, threats, and future opportunities. Apart from this, factors like
competitors, innovation, economic factors, regulatory environ, demographics, social trends,
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partners and infrastructure are often used for conducting an external analysis of an
organization (Bell, Bryman, & Harley, 2018).
In this strategic management report, external analysis tool PEST has been chosen for a
critical evaluation of the external environment. PEST is a kind of macro-environment
analysis which is together known as wide trends in shaping the international and national
environs in terms of social, political, economic and technological trends. The framework
which has been chosen categorizes external environmental influences into six major
categories including political, economic, socio-cultural, technological, legal and
environmental (Enterslice, 2017). In addition to that, PEST analysis effectively evaluates the
wide societal trends which impact many other industries. PEST is used to identify current as
well as future developments which will form the micro-environments of every industry
sector. In the context of KHL, the external analysis will be done with the help of PEST tool
which will be based on sound research of real-time problems. PEST tool has been chosen to
provide evidence from this research for the validation of made points in this discussion.
PEST analysis will be future-oriented, practical and interpretive so that it can help KHL for
their sustainable business future (Kapferer, 2012).
PEST analysis
Political factors
In New Zealand, the risks are high for KHL as the new government applied new rules
and regulations that can be good for an organization. At the same time, labor in New Zealand
is very expensive for starting a new business or strategic business unit. Additionally, in New
Zealand, the KHL has to pay much interest that is good for the regional government yet it
reduces the company’s profit (Kathmandu Holdings Limited, 2017).
Economic factors
As we know that per capita income of New Zealand is high hence the scarcity of the
products in New Zealand is less. In addition to that, for KHL the economic factors are
working positively as people can spend more than help for carrying on the money circulation
all across the country. However, the efficient financial market operation will impact the
profitability of KHL as it can raise capital at the right price (Lee & Carter, 2011).
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Social factors
The social factors which may impact KHL are clearly a direct reflection of the society
which KHL operates in and hence encompasses belief, culture, values, and attitudes which
the most of the population might carry being a community. In addition to that, the impact of
social factors is important for the functional aspect of KHL while it also impacts the
marketing aspects of the firm worldwide. In this way, a detailed understanding of the
company consumers, their level of education, their lifestyle as well as beliefs within a society
or a segment of the society will definitely help to design the products of the company. These
social factors will also impact the marketing messages which will lead to the venture
becoming a great success (Simply Wall steet, 2018).
Technological factors
In this context, technological factors in New Zealand for the KHL may rapidly affect
the competitive landscape and price structure of the chosen industry within a very short span
of time. This is the reason that KHL needs consistently innovating and adapting with the
technologies of New Zealand for ensuring a sustainable business future. The technological
factors for the KHL will maximize the possible profits while becoming an international
market leader (Enterslice, 2017).
Internal Analysis
Internal analysis of an organization plays an important role in the strategic
management of the company as it affects the organization in many ways. In other words, it
can be said that knowing strengths, weaknesses, threats, and opportunities are important with
the help of conducting an internal analysis for strategically manage organizational success
(Buckley & Ghauri, 2015). In addition, internal analysis of the organization is important to
analyze the internal environment while clearly evaluating the consumer perception towards
the company products (Hill, 2008). An internal analysis is typically done while considering
all departments of the firm for identifying the core strength and weal section with the help of
suitable techniques. For conducting an internal analysis of KHL, SWOT tool has been used
effectively (Bell, Bryman, & Harley, 2018).
SWOT analysis is a useful technique which can help to know the strengths,
weaknesses, threats, and opportunities of the organization like KHL while assessing their
impacts from the macro environment (Helms & Nixon, 2010). Without using SWOT analysis
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an organization cannot determine the internal factors which are hidden as well as important
for organizational success. Apart from this, the SWOT tool is very useful for identifying the
internal and external factors as well as for evaluating them accordingly. Subsequently, SWOT
internal analysis will allow KHL to see the opportunities while entering into the global
business market (Book Boon, 2010). Moreover, threats within the SWOT analysis will enable
the company to see the threats from the competitors which can be analyzed for converting
into strengths of the company (Austin & Pinkleton, 2015).
By knowing the SWOT analysis findings, KHL can take new initiatives towards
continuous product development and opportunities within the international market. As
strength, KHL has gained special recognition for the clothing quality as well as for the
equipment for traveling and adventure within New Zealand and Australia. In addition to that,
due to increased GDP growth rates of New Zealand and Australia growth rate of KHL is also
going in a positive direction (Amit & Zott, 2012). Hence, an expansion of the economy along
with the customers’ willingness for spending over KHL products can offer the company an
exclusive growth opportunity in the future. Moreover, an expansion of the range of the
products would also be a great initiative as it will help KHL to attract consumers of different
preferences and taste (Barnea & Rubin, 2011). In addition to that, strengths of KHL will
allow the company to grab the opportunity of diverting the customers from other stores to
KHL stores which is ultimately helpful to manage the threats of international market
competition. Apart from this, the current functioning of KHL is growing larger as the
economy of both countries is strong enough for absorbing the business of the KHL. The other
Strength of the KHL is that it is offering a diverse range of products all across its operating
region and countries. Additionally, due to the wide operations of the company, it is able to
accumulate data about consumer demands which will provide future opportunities of
expanding worldwide (Hill, 2008).
On the other hand, one of the main weaknesses of the KHL is an unsystematic risk in
business. Moreover, unseasonal weather conditions may impact consumer demand for KHL
product offerings (Harrigan, 2015). At the same time, the expansion of both countries’
economies will offer a great opportunity to the KHL Company while tapping the operating
market conditions. In addition, a detailed analysis of the data on consumers will offer an
enhanced opportunity in order to expand in the global market. Hence, market growing would
also grow the business of the KHL at large scale. In this context, a threat of consumers
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decreased preferences and interest may impact KHL business operations as it might lead to a
decline in the consumer demands in the future (Helms & Nixon, 2010).
Recommendations
The useful recommendations in the context of strategic management of the company
KHL are as follows:
In order to overcome or deal with the threats of the company, KHL should restrict
offering a broad range of products but they should focus on increasing the quality of
their products.
To manage future threats, KHL should use new product development strategy for the
sustainable future in the international market.
The KHL Company must emphasize on enhancing margins while budgeting costs as
well as enhancing their revenue more from online sales.
The KHL Company is having high cash conversion cycles those can be made efficient
from minimizing the day’s sales outstanding.
The KHL can increase their payables outstanding like their other competitors for
effectively increasing the overall cycle which can be done through maintaining good
relationships with the suppliers.
Conclusion
In conclusion, the report has successfully demonstrated the capability to critically
application of management concepts, tools, and techniques of business strategies. In addition
to that, this report has conducted both the internal and external analysis of the KHL business
environment while applying different useful and famous management tools like SWOT and
PEST. The critical analysis done over the company operations of the KHL suggests that
internal and external analysis makes an organization prepared for dealing with future threats
and risks. In addition, SWOT analysis successfully evaluated the strengths and weaknesses of
the company while also narrating the threats and opportunities to operate within the global
market. Finally, concepts of both internal and external analysis in the context of strategic
management of the KHL have been applied and demonstrated well for sustainable business
future of KHL.
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References
Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan
Management Review, 53(3), 41-49.
Austin, E., & Pinkleton, B. (2015). Strategic public relations management: Planning and
managing effective communication campaigns. London: Routledge.
Barnea, A., & Rubin, A. (2011). Corporate social responsibility as a conflict between
shareholders. Journal of business ethics, 97(1), 71-86.
Bell, E., Bryman, A., & Harley, B. (2018). Business research methods. London: Oxford
University Press.
Book Boon. (2010). Thinking Strategically. Retrieved from Book Boon:
http://training.hr.ufl.edu/resources/LeadershipToolkit/job_aids/strategic_thinking.pdf
Buckley, P., & Ghauri, P. (2015). International business strategy: theory and practice.
London: Routledge.
Enterslice. (2017). Introduction and Types of International Business Environment (IBE).
Retrieved 12 02, 2018, from https://enterslice.com/learning/international-business-
environment-ibe/
Harrigan, K. (2015). Strategic alliances as agents of competitive change. Columbia: Elgar
Book Series.
Helms, M., & Nixon, J. (2010). Exploring SWOT analysis–where are we now? A review of
academic research from the last decade. Journal of strategy and management, 3(3),
215-251.
Hill, C. (2008). International business: Competing in the global market place. Strategic
Direction, 24(9).
Kapferer, J. (2012). The new strategic brand management: Advanced insights and strategic
thinking. NJ: Kogan Page publishers.
Kathmandu Holdings Limited. (2017). 2016 Annual Report KML. Retrieved from Kathmandu
HOldings Limited:
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http://www.annualreports.com/HostedData/AnnualReportArchive/K/ASX_KMD_201
6.pdf
Lee, K., & Carter, S. (2011). Global marketing management. Strategic Direction, 27(1).
Simply Wall steet. (2018). What Should We Expect From Kathmandu Holdings Limited’s
(NZSE:KMD) Earnings In The Year Ahead? Retrieved from Simply Wall Street:
https://simplywall.st/stocks/nz/retail/nzx-kmd/kathmandu-holdings-shares/news/what-
should-we-expect-from-kathmandu-holdings-limiteds-nzsekmd-earnings-in-the-year-
ahead/
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