Analysis of TK Maxx Strategies in UK Fashion Retail (QAB020N522H)

This report provides a comprehensive analysis of TK Maxx within the UK fashion retail sector, examining its current strategies and potential future directions. The introduction establishes the context of the UK fashion industry and introduces TK Maxx as a key player. The report then delves into the external environment using PESTLE analysis, considering political, economic, social, technological, legal, and environmental factors and their impact on TK Maxx. Further, the report assesses the internal environment, highlighting TK Maxx's strengths, weaknesses, opportunities, and threats. Utilizing Porter's Five Forces model, the report analyzes the competitive landscape, including the threat of new entrants, supplier power, buyer power, the threat of substitution, and competitive rivalry. Finally, the report proposes and discusses specific strategies and tactics TK Maxx could employ to enhance its market position and address industry challenges, culminating in actionable recommendations for sustained success in the dynamic UK fashion retail market.

Retail theory and
Practise

Table of Contents
INTRODUCTION...........................................................................................................................3
Introduction to Company.......................................................................................................3
Key changes in the UK Fashion retail....................................................................................4
Relevant changes within the micro environment...................................................................5
Suggest and discuss strategies and tactics that could be used................................................7
Recommendation....................................................................................................................8
CONCLUSION ...............................................................................................................................9
REFERNCES.................................................................................................................................10

INTRODUCTION
Retailing is a process that is applied for the purpose of increasing the sales by using
different multiples channels. It is used for purpose of distribution and offering right products to
target segment of customers their expectations in order to earn higher profits. There are many
retailer who are willing to increase the sales of their products by using multiple distribution
channels and further distributing them in order to earn higher profits (Amountzias, Dagdeviren,
and Patokos, 2017). UK fashion industry is also changing very fast and is affected by many
external and internal factors. Present report is based on TK Maxx that is a UK Based department
store chain and is having approximately more than 1000 stores that are present in different parts
of UK. It is making them one of the largest clothing retailers of the country. TK Maxx is a
flagship chain of TKX companies. Present report is based on conducting a detailed analysis of
different external factors. All these can posses a long term impact on functioning of a
organisation. There is application of frameworks like PETSLE analysis and based on these
detailed analysis further there are recommendations drawn.
Introduction to Company
TK Maxx is American department store chain that is selling low prices as compared to
other similar stores and they are among one of the largest clothing retailers of UK. They have
flagship chain of TKX companies. They are dealing in women, men and children shoes, apparels,
toys, beauty accessories and also a complete range of home products that are ranging from
kitchen utensils & furniture (Khan, 2017). Marshalls and TK Maxx are operating as sister stores
and they are sharing a similar footprint across different parts of the country. They are having
identical prices and similar layout of their stores. There are some higher volume stores that have
a high end designer department that is named as “The Runway”. They are also having more
upscale appearances as compared to Marshalls & typically selling a wider range of accessories
and fine jeweller. Ernie Herman is the CEO of TKX companies. They are having presence across
1241 locations according to the data of march 2019 and was founded 44 years ago by Bernard
Cammarata. They have launched their e commerce site in march 2009. Initially they were
dealing in handbags now they have expanded to range like shoes, clothing and also home made
products (Hänninen,nd Paavola, 2018).

TK Maxx is willing to create a impressive culture that can help in enhancement of the brand
image of orporate fashion retail brand by making it one of the most coveted global fashion brand.
Key changes in the UK Fashion retail
External environment is very dynamic and is affecting significantly alll the changes that
are taking place across different parts of the world. (Amasiatu and Shah, 2018). In present case
UK fashions retail brand TK Maxx is also impacted by these changing factors. There is a in-
depth analysis that is made by use of a model named as PESTLE analysis for developing a
detailed overview of these factors & its impact on TK Maxx in long run:
Political: There are many political factors that are part of a external environment of a
country and can impact the internal functioning of a organisation. These factors in context of UK
includes the Brexit scenario and the process of globalisation has surged across globe (Mogaji,
and Danbury, 2017). It will result into increasing of the actual cost of products and they become
expensive, this is affecting the choice of customers in long run.
Economic: There are some economic factors that are part of a country it consist of low
labour rates that is benefited TK Maxx in terms of maintaining the cost. There is a scenario
increasing disposable income of people will also help them in enhancement of their sales
(Filimonau, and Gherbin, 2017).
Social: This factor is related to the fast changing trends of consumers and their fast
changing preferences because of media & celebrities they are wiling to adopt a materialistic
lifestyle so that they can move with present flourishing trends. They are offering discounts to
their customers so that they are able to enhance their level of satisfaction. They have also offered
schemes of “Treasure card” that can help in splitting the choice of product differentiation and
supporting the high pricing policy.
Technological: TK Maxx has developed their application for mobile devices to reach a
large segment of customers, they have also launched a club function that will help their
customers in collection of reward points from their in-store and online purchases (Amjad,
Daniel, and Garza-Reyes, 2019). TK Maxx has also able to built up a extensive network of
supply chain by tracking all their logistic operations and having a strong reputation of
technological advancements. Their club cards are also helping in tracking the purchasing habits
of their customers and future development of a marketing strategy. They have online presence
that is helping them in formation of effective collaboration with their clients. The software

system of TJ Maxx has been targeted by many hackers in Massachusetts and watford that lead to
stolen down of approximately 45.7 million accounts. These customers mostly who used their
cards between January in the year 2003 & January 2004 were majorly affected by this issue.
Some of the stores in TK Maxx provide stuff that is not fresh and it has lead to a negative impact
on their brand image as many customers were even not provided with the facility of getting the
stuff returned which they were not satisfied. These are some of the technological challenges that
have to be dealt by TK Maxx.
Legal: TK Maxx is also making sure that they are have to follow all the legal laws and
regulations that are formed by government of UK like Equality Act & Anti discrimination Act by
providing equal opportunities to all employees irrespective of their race, culture, gender, religion.
They are also following government “Tax incentives & regulations” policies that are helping the
large stores in having a movement towards external environment & development of measures of
sustainable development.
Environmental: TK Maxx is making efforts to be part of suitable environment that they
are cutting the coverall negative impact on environment by several hundreds of CO2 and 9%
fuels are being reduced by this brand. It has helped this brand in saving lots of financial
resources in their expensive delivery system. They are focussing on 3Rs that are reusing,
recycling and reducing. It is helping in dealing with negative impact on the external environment
that is part of forming strategy of a organisation (Balajiand Roy, , 2017). Decreasing the use of
fuel is very beneficial for a business in saving the money spent on expensive system of delivery.
Above discussed are factors of PESTLE analysis that are used for analysing the external
environment of TK Maxx and consist of certain individual factors that are impacting their overall
functioning.
Relevant changes within the micro environment
There are many internal changes that can pose a impact on the way organisations are
functioning as mentioned below:
Strengths:
 TK Maxx is having a chain of more than 1000 stores across different countries
 They have a price leadership strategy that is used for the purpose of attainment of high
market share.
 There online store is expanding since last few years

 TK Maxx is having a strong focus on high customer service

Weakness:
 Their customer service are not best in their physical stores and many customer are not
satisfied
 Many customers of TK Maxx find it contradictory that designer clothes cannot be sold in
bulk quantities
 They are suffering from a weakness of having few variety of products.
Opportunities:
 TK Maxx has a opportunity to enhance their share in international markets
 TK Maxx can make innovation in their store merchandising activities and attract some
new customers
Threats:
 The credit card fraud had resulted in affecting the present brand image of TK Maxx in a
negative manner.
 There is presence of very high competition that is leading to a high threat on the future
sales level of TK Maxx because of competitors such as Ross stores, Stage stores Inc and
Burlington coat factory.
Porters five forces model:
Porters five forces can be used as a holistic strategy framework for the purpose of making
various strategic decisions by analysing of the present competition in the external market
scenario. This is a analysis that is used for the purpose of understand how this organisation can
build up a sustainable competitive advantage (ROZENFELD, 2017).
Threat of New entrants:
In case of retail industry there are large variety of products in which a store is dealing. so
there is a big threat and can be tackled by using lower cost strategy, offering new value
propositions. All these strategies can be adopted for the purpose of managing overall challenges
that are part of this retail industry and to have a competitive advantage by building up of
economies of scale.
Bargaining power of suppliers:
There are large number of suppliers who are part of retail industry and suppliers who are
in dominant position can use their negotiation power in order to extract higher profitability
(Blackley, Resnick, and Cassidy, 2017). This overall impact of high bargaining power of

suppliers can lead to lowering down of profitability. There is a need to build up a efficient supply
chain by experimenting with product designs. There is a requirement to build up a dedicated
supplier base by creation of a scenario where the third party manufactures will posses less
bargaining power.
Bargaining power of Buyers:
Buyers are always in a demanding state. They want best offerings as they posses large
number of options to switch to other brands if they are not satisfied with a particular product.
TJX Inc can tackle the bargaining power of buyers by building up of large customer base and
making rapid innovation in products (Rashid, 2017). Development of new products will help in
reduction of shortfalls in existing category of products.
Threat of substitution:
While a new product is able to meet the demands of customers then it leads to reduction
in the profitability of existing customers (Shah, and Ahmed, , 2016). TJX can handle the threat of
substitution having a approach of being more service oriented than product oriented. There is a
need to develop a detail understanding of the core requirements of products. There can also be
increasing of switching cost of customers so that they are not able to switch easily between
brands and it will help in development of a loyal customer base.
Above discussed is the Porters five forces that helps in understanding the impact of major
five forces on the functioning of a retail organisation.
Suggest and discuss strategies and tactics that could be used
Corporate values:
The corporate values governing TK Maxx are discussed below:
 TK Maxx is operating according to high standards by building up of relationship between
their suppliers, customers and community
 They are fostering a climate that is encouraging diligence and innovation among their
staff members.
Key strategies that can be used by TK Maxx:
 Acceleration of new product launches by strengthening of their Research & development
department and analysing the future customer requirement more deeply.
 Rising funds by using sources of venture capital

 Enhancing their senior management involvement in formation of marketing strategies by
increasing their participation in marketing department of the organisation.
 Introduction of new share options for their workforce and fortification of human
resources
 Appointment of higher team for managing functions of different departments.
 Seeking of new applications and market sectors for making new launches.
Following discussed strategies will also be adopted by organisation:
1. Locating of new premises near to Oneonta, New York.
2. Starting more trade shows and participating in trade exhibitions.
3. Cultivation of plans to new market entry in overseas market like some countries of south
Asia and Africa can be set up as new target locations.
4. Pursuing strategies for forming strategic alliances with existing popular brands
5. Strengthening of web presence & using more brand promotion techniques.
6. Main competitors of TK Maxx includes George clothing, Prim-arks stores limited and
Tecso PLC . There is need of developing a effective marketing technique that can be used
for understanding of the market place and market segment according to prevailing market
conditions.
From the be made analysis of some of the strategies that can be used by TK Maxx it can
be said that they have a positive impact on their customers by use of a concept named as “of
price” for selling their designer & high street products. This concepts lead to increasing the sale
of products as they are offered on discounts of around 60% on their retail prices. It will help this
brand in selling huge quantities of product at a discounts. It will help them in providing fresh &
new fashion to their customer (Pantano, Priporas,., Sorace, and Iazzolino, 2017). They are
already offering huge varaiteis of designer wear for all segment of customers and this is going to
be very profitable for their organisation in long run. s
Recommendation
From the above made internal and external analysis of TK Maxx it can be said that there
are several recommendation that can help them in maintaining their long term profitability and
position in the organisation:
 There is a need to develop Strategies in order to some of the issues that have been faced
by TK Maxx in all these years such as availability of competent staff members. As many

customhouse posses complaints related to not getting assistance specially during peak
seasons, on Saturdays and during time of sales & offers (T.K.Maxx Strategic Analysis,
2016).
 TK Maxx store scan make use of effective strategies by expanding themselves apart from
their present stores in United states and European countries.
 There must be a complete check on goods and clothes that must be done before sending
product to TK Maxx stores to increase the sales of their products.
 There is a urgent requirement to increase the training proposition of their staff members
so that they are able to train their staff to handle all the front office operations so that
customer request and complaints can be handled in a more proper way.
 There is also a need to make new hiring of employees in order to reduce the waiting time
of their customers and providing them with timely assistance.

CONCLUSION
From the above discussed points it can be said that retail industry is seeing many changes
that can affect the organisation in long run because of external and internal factors. There is a
need to understand the short term and long term implications of such changes then accordingly
form strategies so that there can be reduction of negative impact from these threats of dynamic
environment. There is requirement to focus towards the changing customer requirement that can
help a organisation development of a competitive advantage as compared to other competitive
brands.

REFERNCES
Books & Journal
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industry. International Journal of Retail & Distribution Management.
Amjad, M., Daniel, J. and Garza-Reyes, J.A., 2019. Optimisation of a distribution system in the
retail industry: An Australian retail industry.
Amountzias, C., Dagdeviren, H. and Patokos, T., 2017. Pricing decisions and market power in
the UK electricity market: A VECM approach. Energy Policy, 108, pp.467-473.
Balaji, M.S. and Roy, S.K., 2017. Value co-creation with Internet of things technology in the
retail industry. Journal of Marketing Management, 33(1-2), pp.7-31.
Blackley, N., Resnick, S.M. and Cassidy, K., 2017. Improving UK retail academic-practitioner
research: insights from relationship marketing. International Journal of retail &
distribution management.
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in the UK grocery retail sector. Journal of Cleaner Production, 167, pp.1184-1194.
Hänninen, M. and Paavola, L., 2018. Digital Platform Led Industry Transformation: A Case
Study from the UK Grocery Retail Industry. Academy of Management Global Proceedings,
(2018), p.115.
Khan, M.W., 2017. Corporate Governance and its Effect on Earnings Quality in Retail Industry
of the United Kingdom. Asian Journal of Applied Sciences, 5(5).
Mogaji, E. and Danbury, A., 2017. Making the brand appealing: advertising strategies and
consumers’ attitude towards UK retail bank brands. Journal of Product & Brand
Management.
Pantano, E., Priporas, C.V., Sorace, S. and Iazzolino, G., 2017. Does innovation-orientation lead
to retail industry growth? Empirical evidence from patent analysis. Journal of Retailing
and Consumer Services, 34, pp.88-94.
Rashid, A., 2017. The impact of country of origin on retail and wholesale brands in the UK
fashion industry. The University of Manchester (United Kingdom).
ROZENFELD, G.C., 2017. CHAPTER FOUR DISSIDENT OPINIONS ON BUDGETARY
CONTROL SYSTEMS IN THE 21ST CENTURY: EVIDENCE FROM A
MULTINATIONAL RETAIL ORGANISATION LOCATED IN THE UK. Dissident
Voices in Europe? Past, Present and Future, p.41.
Shah, M.H. and Ahmed, W., 2016. Identity theft prevention in online retail organisations: a
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