Strategic Management Report: PESTLE, SWOT, VRIO Analysis

This report provides a comprehensive strategic analysis of Topshop, a British multinational fashion retailer. It begins with an executive summary and introduction, outlining the company's background and objectives. The main body of the report delves into a detailed PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors impacting Topshop. It then applies Porter's Five Forces model to assess the competitive landscape of the fashion industry. Furthermore, the report conducts an internal analysis using VRIO and SWOT matrices to evaluate Topshop's resources, capabilities, strengths, weaknesses, opportunities, and threats, offering strategic advice and recommendations for future growth and success. The report concludes with a summary of findings and a list of references. This assignment is contributed by a student to be published on the website Desklib, a platform which provides all the necessary AI based study tools for students.

Strategic Management

Executive Summary
Strategic management is undertaken as the ongoing monitoring, planning, identification and
assessment of the requirements of company that tends to meet the prominent goals and
objectives. In regard of this, suitable changes in the overall business environment need that
company prominently assess their strategies towards the success. Moreover, this process is
helpful for company in terms of stocking of their present situation, chalking out suitable
strategies and also deploy them to identify the effectiveness of executed management strategies.
For this, the report leads to cover the effective analysis and identification of external
environment undertaking the overall identification of industry. Along with this, prominent
capabilities and resources are also identified with the help of VRIO and SWOT matrix.

Table of Contents
Executive Summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
PESTLE Analysis...................................................................................................................4
Porter's five forces..................................................................................................................7
VRIO Analysis.......................................................................................................................9
SWOT Analysis....................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Strategic management undertaken as the effective development of prominent goals and
objectives for the effective analysis of competitive business environment and also tends to
identify the internal features of an organisation which is useful in developing strategies. It also
tends to make sure the effective management and execution of significant strategies across an
organisation considering the growth and development. Strategic management is the effective
management which leads to undertake effective implementation and execution of prominent
objectives which are taken by the higher authorities and managers of an organisation and it also
based on the prominent resources considering the internal and external environment in which
company tends to operate its business functions (Dzwigol, 2020). Along with this, it is helpful in
terms of offering effective direction to entity and also tends to undertake particular objective of
company which is useful in developing effective rules and plans in order to accomplish effective
objectives.
To carry forward this report, Topshop is considered which is a British multinational
fashion retailer and deals in women clothing, shoes, accessories and make-up. It has around 510
outlets across the world and for which 300 are in UK. Company is situated in London, UK and
founded in 1964. The report tends to cover PESTLE analysis of the company and also conduct
effective analysis of overall industry. Company also tends to perform effective internal analysis
of an organisation with the help of VRIO analysis which depict the internal capabilities and
resources by summarising the effective strengths, weaknesses, opportunities and threats through
SWOT matrix by offering strategic advice to company.
MAIN BODY
PESTLE Analysis
PESTLE analysis is the framework which depict the effective analysis of macro
environmental factors which is helpful for the environmental scanning elements for the strategic
management. It is the important part of the external analysis in terms of organising strategic
analysis for prominent market research that tends to offer effective overview to the various types
of macro environmental factors which are taken into consideration. For this, effective strategic
tools are understood undertaking the growth of market that tends to decline for the business
position, direction and potential of operations (Schilling and et. al.,2019). This framework tends

to identify the risk factor which is useful in terms conducting effective marketing research and
also leads to overcome uncertainties by developing effective market research. For this, some of
the factors are mentioned as underneath: Political: Most of the production of Topshop is setup in Europe and the political stability
of Europe is not stable before and after the independence. For this, the shift of power is
supremacy over the effective period of time that results in develop war for the same and
effective situation. For this, it tends to impact the outcome by increasing the prices for the
textile industry and products and the workers tends to increase their overall demand. For
this, the demand for the working condition depict the safe work place and enhanced
wages (Ginter, Duncan and Swayne, 2018). Along with this, considering the developing
countries which are stable for the governmental changes considering the labour laws
including minimum wages that tends to shoot up the overall production of Topshop.
Therefore, the overall impact of the effective manufacturing become quite costly as the
customers tends to find cheap options for their merchandise. Economical: Besides Brexit, the sales tends to rose by 7% which tends to seen as the
good sign for the business considering the effective political turn around which does not
impact the overall profitability rate. Along with this, several countries have their own
labour laws and Topshop need to consider all of these laws undertaking their
manufacturing for the profitability of country. Besides this, considering the effective
development and enhancement of economy across the world (Moutinho and Vargas-
Sanchez 2018). The disposable income of individuals tends to increase effectively which
tends to become strength for Topshop. Along with this, company also leads to spend
more items considering the premium clothing. For this, effective tax rates and
considering changes occur with time that prominently impact the overall stability of
economy of the nation and organisation as well. For this, corporate tax policy also varies
from place to place and Topshop need to align with business respectively. Social: Clothing sector is highly influenced by current trends and factors which include
impact of social media and celebrities. For this, it tends to relate with brand and also
undertake their favourite celebrities considering the star promotion. Hence, effective
promotion of products tends to advertised by the social media by creating effective buzz
across the effective channels as it is important for Topshop. For this, the attitude of

customers are also considered because it is changing in nature. In regard of this,
customers also leads to prefer designer clothes nowadays undertaking demand which is
increasing than ever before (Woodside, Nagy and Megehee, 2018). Moreover, Topshop
also need to consider the changing trends for the attitude and purchasing behaviour which
is effectively examined as no social media group is left untargeted. Besides this, Topshop
also need to undertake after pandemic impacts and restrict exchanging criteria of
clothing. Moreover, company also consider recycling of the unwanted and wasted clothes
by considering the organic cotton for its products which is effectively represented by
Topshop and its efforts for the safe and better world. Technological: Within the era of digitalisation and mobile technology, individuals are
more interested in terms of storing and purchasing clothes for having effective
merchandise in terms of having same thing through mobile phones. For this, it undertake
effective technology that leads to offer effective customer base and ease in terms of
ordering things at the workplace and any other place. For this, Topshop tends to
undertake effective technological advancements and considering changing behaviour by
which company need to keep up with them. For this, the reward points are significantly
applied by considering the use of prominent application in terms of offering effective
discount for the suitable strategy which is either mixed in terms of increasing the
technology considering the customer base (Lynch, 2018). Besides this, Topshop also
tends to consider highly advanced technology regarding manufacturing and delivering its
products and services. Furthermore, company also leads to undertake artificial
intelligence, which is used to design commodities by observing the overall study of the
customer's needs and preferences in terms of offering effective services and products. Legal: Each and every country has its own norms and regulations that helps in
developing effective policies. For this, company tends to operate in effective business
environment that tends to abide the entity on the grounds of rules and norms which are
successfully developed in terms of effective operations of business. For instance,
Topshop need to effectively collaborate with franchising with its partners and providers
in various countries and when the franchising is not the particular part of the expansion
strategy of Topshop. Along with this, the intellectual property and effective rights
become the major concern that leads to suppose the innovative designs for the effective

production suitable products and services which is done by Topshop but if not legally
secured then it can be imitated by other competitors and by not considering any sort of
innovation undertaking the innovative marketing strategy (Carayannis, 2018). Besides
this, considering the current situation of pandemic, there are various laws and norms
which are developed by the government like wearing mask is essential, social distancing,
proper sanitisation and many more.
 Environmental: Clothing industry is considered as the second most polluted sector after
the petroleum and oil as it tends to pollute high amount of water waste which is being
pollute the major water bodies. For this, the population that live nearby those water
bodies tends to suffer from various diseases. Besides this, air also gets polluted
considering the manufacturing of the clothing products and merchandise. For this, there
are various government norms that leads to regulate these emissions within the air and
also leads to damage water bodies which can never by controlled. In relation with this,
the objective to Topshop is to effectively use recycled clothes as the effective material for
its production. Along with this, Topshop also tends to carefully take suitable actions in
terms of undertaking the overall production of clothing. Besides this, there is no such
environmental hazards which are being involved in making of products and also no such
illegal dumping in water by the Topshop.
Porter's five forces
Porters five forces model helps in identifying the strengths and weaknesses of an industry
and through these forces it has the ability to serve the customers and make profit. It includes five
forces that are threat of new entrants, threat of substitute products, bargaining power of suppliers,
bargaining power of buyers and industry rivalry (Tonelli, and Cristoni, 2018). The information
below will be based on clothing industry of Top shop which is mentioned as: Bargaining power of Buyers: There is strong bargaining power of buyers in Top shop.
As there are different outlets who offers fashionable products so the power lies in the
hands of buyers that they may switch to other brands. The customers choices are
unpredictable so retailers have to keep in mind about their preferences. Not every
customer is ready to pay high prices for products so prices should also be properly set
according to customers (Holloway, 2018). If the brand is providing good quality products
but all of them are of high prices and the other brands are too providing the good quality

products and they are offering the products at all prices so in that case customers may
switch to their brands. Bargaining power of suppliers: The supplier power of Top shop is low because they
focus on attracting every customer. The supply of Top shop is usually in excess due to
which there is a huge range of production. Top shop designs and produces the product by
itself and has expanded its brand. As there is little differentiation available so their power
increases as customers will rely on their brand. Top shop establishes a good relation with
only one supplier who has the knowledge regarding the good quality products. Suppliers
have ensured that they are providing good quality products. Threat of new entrants: As the fashion industry grows the threat of new entrants also
increases in the industry. All the customers prefers uniqueness especially in clothing
industry. So if new brands comes in the market then before customers switch to other
brand the uniqueness and designer products should be innovated. Top shop did the same.
It attracted the individuals with unique style of clothing which decreased the threat to
them. Sometimes, it also becomes difficult for other brands to gather the customers,
develop all unique products over a short period of time (Makadok, Burton and Barney,
2018). Topshop is the fastest growing industry that leads to grow in the diversified
industry considering the effective style for both the horizontal and vertical manner that
leads to form for the new and trendy fashion. However, Topshop also tends to invest
within the real estate in terms of purchasing effective location for its concerning outlets
on the basis of effective risk which is comparatively low for its competitors due to its
overall cash flow. Threat of substitutes: Though Top shop has always provided good and unique products
to consumers but the choices of customers are always unpredictable. If an alternative
brand is providing good quality products at reasonable prices then those substitute
products becomes threat to them (Meyer and Xin, 2018). Top shop has always provided
the materials at affordable prices so in that case the threat is not much; its moderate.
When other brands spent much on advertising to attract the consumers they increases the
threat for them. And due to this they might take advantage to become an effective brand.
Top shop always been effective but has to make sure that no other brand been more
effective than that.

 Competitive rivalry: As there are many competitors in the clothing industry so customers
can easily switch from one brand to another. Customers mainly focus on prices of
products so according to their preferences and demands Top shop made lot of efforts so
that their customers does not switch to other brands. Top shop is considered as one of the
most fashionable brand so due to this they are able to make good amount of profit. They
do not have to spent much money on advertising in comparison to other competitors.
Moreover, due to the limited stock, Topshop also leads to collect 80% of the full ticket
price on the overall retail market and the market generally takes around 60-70% in
comparison to its other rivals and competitors including Benetton's was around 7%,
H&M was around 9.5% and Gap had none.
VRIO Analysis
Resources Valuable Rare Imitable Organised
Products and
services
Yes - - -
Employees Yes Yes - -
Distribution
network
Yes Yes Yes -
Financial
Resources
Yes Yes Yes Yes
Valuable Products and services: These resources are significantly beneficial and undertaken as the
essential asset considering the effective association for company that leads to develop
deeply separation among them. It prominently tends to give the association for the exact
analysis of these types of customers which are effectively analysed for the essential
products of Topshop that results in positive outcome. Employees: These resources are undertaken as the essential asset for the company on the
basis of effectively found and being prepared for the prominent products. In relation with
this, an effective trend is being followed by the workforce that leads to bring huge

efficiency within the prominent area of company undertaking the enhancement for the
sales, revenues and profitability of company (Sullivan, Thomas and Rosano, 2018). Distribution network: It is an essential asset for company which is being arrived and also
leads to increase the number of clients for the further expansion. This network is also
effective in terms of expanding the overall income of Topshop which leads to gurantee
the effective success and growth for the prominent products of company. Financial resources: These resources are valuable as these are prominently exceptional
and useful for company in terms of opening doors for the company within the other
market area and helps in smooth and effective expansion. It also leads to show up the
market condition which is effective and helpful for entity in terms of any other danger
situation that occur in external market area.
Rare Employees: These individuals tends to conduct proper investigation of the market on the
basis of effective developed factors and also depict the prominent capability of
representatives for the overall association within the business and also keep it in the
upper hand. Distribution network: This network of Topshop is effective on the basis of delivering
products on the stipulated period of time that need effective and suitable deal for the
speculation for the upcoming period of time undertaking the prominent degree for which
is answerable for having prominent arrangements that result in having effective period of
time (Teece, 2019). Financial resources: It depict the essential resources which are identified for the
effective petition for company on the basis of suitable drivers for having effective
examination on the basis of effective monetary assets that leads to become the effective
and prominent power for the company including the business in which Topshop leads to
exchange its factors.
Imitable Distribution network: These resources of company are quite expensive and also
impersonate by other competitors of company in terms of having effective channels. For
this, they also need to take effective factors for developing suitable dispersion of channels
to their display screen in terms of having prominent contribution of the several factors

considering the internal factors for prominent suggestion undertaking the comparative
channels and networks. Financial resources: These resources for Topshop are effectively restricted and also
does not tends to be copied with the help of effective and prominent techniques which are
required to be followed in terms of using the monetary factors and assets for Topshop.
Therefore, it is qutie inconceivable to exactly imitate the money related factors of
Topshop.
Organised
 Financial resources: These resources of Topshop are being developed in terms of
catching as an incentive and also being recognised for having effective analysis of
respective company on the basis of suitable sources that are helpful as the effective
method by opening effective doors for the company within the external market in terms
of having prominent fighting from the threats and dangers of company by which it leads
to be compared for the effective assets which are given by company and also has
effective chance in terms of getting and managing things inside the market conditions
(Dobrovič and et. al., 2019).
SWOT Analysis
Swot Analysis is a technique used to identify the strengths, weaknesses, opportunities and
the threats of any business. The users of swot analysis asks and answers the questions to generate
the information for each and every category. The below swot analysis is based on Topshop
which is a clothing company and deals in women clothing, shoes, accessories and make-up. The
effective analysis is mentioned as underneath: Strengths: One of the biggest strength of Topshop is that company has effective and
unique designs which is beneficial in terms of developing more and effective
competencies and abilities. Besides this, Topshop also tends to have effective clothes
which are elegant and also of superior quality in terms of fantastic finishing and
manufacturing. Besides this, respective company also come up with prominent varieties
considering the party wear, casual and formal clothing of women and other concerning
accessories (Simandan, 2019). Furthermore, effective accessories are also become the
integral part of Topshop. Besides this, Topshop also have effective and strong presence in
terms of having effective expansion across the world. Along with this, company also has

300 outlets in UK undertaking the average sales of 15.9 billion undertaking the expansion
rate of company. It depict the effective survival for the retail sector as Topshop leads to
keep prominent expansion undertaking its overall presence which is effective for brand in
terms of doing its effective business. Away with this, Topshop also get to know regarding
its effective designs undertaking the conception of the stores that leads to take other
competitors in terms of making Topshop as the trendy store within the latest fashion
store. Along with this, undertaking the prominent designs which are developed by every
year of Topshop effectively tends to push their customers in terms of visiting the store to
prominently check out the trendy and latest designs. Weaknesses: Topshop is not specifically specialised in specific product in terms of
having everything as currently company tends to have effective collection undertaking
the specialised products and also depict the reason for the shifts of customers for their
competitors by which their customers are suitably focused on the specific thing. In regard
of this, company prominently focus on the shortage and lacking of its products and also
try to overcome its for the day to day to wearing and trendy wear (Heath, 2018). Besides
this, Topshop also leads to for the cost advantage which can become strength of company
but because of lack of advertising it leads to become weakness as the brand can double its
profitability considering the turnover for the advertisement and its effective collection
which is also relies under the trendy fashion and outlets of company. Moreover, it is also
easy to pull more customers in terms of having effective advertisement in terms of
generating effective word of mouth which put positive impact on the brand image. Along
with this, company also have regret for having stores and have stocks which are fast
growing and moving in terms of safely buffering behind company (Peppard and Ward,
2016). Moreover, low inventory also tends to keep company as its overall strategy for
their customers in terms of walking into the stores to check the latest products that exist
in market. For this, company also means to have specific designs which is hit by their
potential customers as it would not reach its effective potential as there is no safety for
the stock that leads to buffer for effective designs. Opportunities: Topshop tends to have effective advantage for the online purchasing and
effective trends in terms of making their clothes available which are not present at the
stores. For this, company leads to consider online platform and other e-commerce stores

in terms of bringing effective hike on the sale (Holloway, 2018). Besides this, Topshop
also has effective feature within the clothing sector as they have their flagship for the
designs of their stores. Along with this, company also tends to have shortage in terms of
bringing great designs and developing more prominent and sustainable brand image of
company. In regard of this, company also tends to have effective image in terms of
becoming more popular that result in growing for the suitable market potential (Ferreira,
Mueller and Papa, 2018). It depict the increment in effective earning of the potentials of
customers which result in improvement in the overall demand for the effective status
symbol. In relation with this, Topshop has effective status symbol within the clothing
sector in which customers love to wear clothes of company. Therefore, Topshop need to
capitalise for the effective growing of market potentials for the existing market.
 Threats: In relation with this, company need to think for having prominent presence and
also tends to look for its mistake by not promoting its innovative brand proposition. In
regard of this, company tends to keep things rotating in design and also rope for its
customers in terms of having effective advertisement by which they get the latest design
from Topshop. Besides this, the customer base leads to increase tremendously to come up
with new and effective designs for differentiating company from others. Therefore, it
depict the effective debate in terms of promoting its products to undertake the
management of products (Mavi, Gheibdoust, 2019). Moreover, Topshop is not only the
company which is famous for the chic design and the potential customers of company
also leads to loved it. In regard of this, company tends to face prominent competition for
the saturation for the semi premium segment that indirectly impact the margins of
company. Besides this, Topshop also prominently reach tremendously in terms of
effective approach for its stores and does not have shop for their overall stores for
effective display. Hence, if it is not possible then the rivals of company prominently get
impact the brand equity of Topshop for the power penetration.
CONCLUSION
By considering the above discussion, it is identified that strategic management is
essential in terms of analysing the prominent conditions of an organisations and also tends to
provide effective direction to an organisation considering the effective development and success.
Along with this, effective strategic directions and essential frameworks are used as it is helpful to

provide effective guidance for the future strategic direction to an organisation. Besides this, it is
also identified that current vision and mission of an organisation tends to align with the effective
demand of the market and also tends to develop effective strategies in terms of defending for
their core business.

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