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Strategic Planning and Implementation Unit 4
Blacks groups divide in two division outdoor division and boardware division. Outdoor division comprise with Blacks and Millets while boardware division connected with Freespirit and O'Neill for whole sale operation. Outdoor division brands store doing well and make profit, boardware division brands store not doing well and broardware division show operating loss in business. There are many factors available for blacks group not doing well in business.
This problem arises from poor management and weak competency. Blacks poor marketing and is not adding value to their customer. Blacks can't differentiate with their competitor. Blacks financial problem and there is no clear strategy for future development. To resolve this problem Blacks can take certain steps. Chief executive can represent new group to create new strategy, blacks can solve their financial problem by taking help of banks.
Blacks can reduce cost base and reducing working capital. Blacks can develop two new outdoor retailing formats. Blacks can convert loss making boardware division to outdoor division. Blacks group can try to meet customer needs. Blacks can focus on collecting debts. To introduce new programme upgrading store and develop new marketing strategy to get competitive advantage.
Blacks are one of the UK's leading retailers. There are 313 stores across the UK and republic of Ireland where Millet's trade 208 stores and blacks outdoor from 91 stores. Blacks groups announced 89 loss making stores across its freespirit, millets and blacks facials. Blacks is one of the UK's leading outdoor retailers founded in 1861. Blacks leisure group is divided in two divisions. Blacks and Millets support UK's most prominent outdoor groups while Freespirit and O'Neill related with wholesale operation.
Blacks and Millets achieved operating profit while Freespirit and O'Neill to make loss in wholesale operation. Blacks now focus on five key operations. First Blacks try to reduce central overheads as much as possible. Secondly, optimisation of store costs of Blacks. Thirdly, Blacks can reduce range by stock clearing promotion. Forth, blacks try to improve retail standards and finally, introduce new store format in blacks.
Political change is directly affecting Blacks strategy. If government policy changes in retail industry, it can be affect growth of retail industry. Globalization is powerful influence in every industry. Current economic crisis lead that government should give some incentive to leisure retail industry so Blacks group can survive in this situation. Taxation policy also change rapidly which always increase in tax rate which is directly affect customer spending and company performance. Foreign trade regulation change depends on political view in retail industry. Government gradually increase taxes like VAT, service tax as well as council other taxes in UK which is directly affect blacks sales and company growth.
Economic crisis is in business world which is directly effect on blacks strategy. Economic crisis reduce customer buying power which is impact in blacks sales. Continues change in interest rate is faster and business requires more fund which is directly create financial risk in blacks. It can reduce risk by change in rate control to buy foreign currency which may be hedged by to do forward foreign currency transaction and currency option. Blacks faces financial problem that can be reducing by doing major cost cutting in every sector and redesign product that fit on this financial condition. Economical problem through Blacks loss so much employee. In this credit crunch will directly effect on banks and that's why it is not easy to get new credit.
Social factor highly related with Blacks. Employee is the main power to achieve blacks objectives. Blacks group maintain relationship with employee and set with employee discuss the problems and solution. Blacks always committed to involving employee to company growth as well as performance and development. Blacks leisure group also try to provide good quality service to their customer. Blacks groups aim to give high quality product and service which help to improve customer satisfaction. Blacks make a good environment by environment policies and better use of resources. Blacks group maintain close consultation with its employee regarding matters likely to affect their interest and is committed to involving them in performance and development. Blacks can start purchase reward point card for customer which helps to improve sales performance in Blacks. Health and safety also is very important for blacks. Customer service department of blacks is actively engaged in dealing efficiently with customer issue and enquiries.
Blacks do not aggressively find new discovery and development which can solve company problem and it will up Lift Company by delivering high sales growth. Each system requires key record and data with timely and accurate manner. Blacks require good system which gives detail all inventory and stocks and continues updating records as well. Technological change directly affects consumer mentality and life style. Life style change rapidly which is respect to change in technology. Rate of technology transfer is also high which drive to change customer test of buying. Now a day, online shopping is increasing high speed because of customer do not want to spend more time to buy product.
Blacks is leading leisure industry in UK. Blacks activities can learn by porter's models.
Porters five force
Blacks is a large size company but Blacks offers same product which is normally customer get other store. Blacks is more like oligopolistic industry so Blacks has competed with other leisure retail. Blacks needs to worry about this generic force because the leisure industry is highly competitive. Entry barriers are not very high. Blacks cannot sustain by giving same product and services. Blacks should offer new product and comparatively best service to improve their performance. Blacks cannot create differentiation in product service with their competitor which can reduce blacks group growth in leisure retailing.
Threat from New Entrants
The leisure industry has very low entry barrier because it has low capital requirement compare and patent is not very important. The leisure industry exist barrier is too high because leisure retail faces high rents and lower margin because of competition.
Threat from substitute
In the leisure industry, some companies opt to integrate their leisure equipment such as footlocker offers on sport equipment. Customer can get free service on long period of time. This type of trend can adopt blacks as well. Blacks should find unique strategy that creates value in blacks. This allows the blacks to do more focus on their service that it does best by improving quality of services.
Power of buyer
In the leisure industry, there are many leisure retailers who sell their product and compete with each other. There are limited amount of customer who buy leisure product which is reduce attractiveness in leisure business. There are few customer take more interest in leisure product. Leisure product and competitor are so many. All try to give best service to their customer. Buying product is depending on blacks so customer not decides buying decision of product.
Power of supplier
Supplier set margin with blacks so it is very hard to get lower product price and Blacks moreover depend on particular supplier. Which product should buy blacks it's totally depend on supplier because supplier provide product range to blacks. Suppliers have lots of bargaining power. This is directly affect blacks product price range.
Market is divided in different segments. In leisure industry, each organisation can focus on particular target group to grow business. Leisure industry various competitors make strategy to achieve their goal. It is need to know that is there any other leisure company who give same leisure service of blacks. Blacks should know about competitor services and blacks try to give specialize service so it will create differentiate in services. There are many competitors in leisure industry who sell same product to the customer. Blacks also sell same leisure product which customer can buy other leisure store.
Blacks should find their competitor and blacks leisure group can identify there competitor after identify there competitor to find customer use same strategic path which blacks use. Blacks should create differentiation in strategy or blacks should find out difference in strategy if it is same strategy than blacks should change their strategy. Blacks manufacturing cost is similar with their competitor. Blacks should know that competitor manufacturing cost so blacks can decrease their manufacturing cost. However, other leisure products still meet the same consumer need and these include, television show companies, movie companies, video games, music or radio companies, fitness centres, night clubs, casinos, tennis operators and many others. Consequently, it is very advisable for company to shift from defining competitors in a conventional way as the marketing environment has changed.
Blacks know that competitor serve which is best service in leisure industry. Blacks can use unique service which can help blacks to become leader in services. Blacks should know the objectives of competitor other leisure group want to achieve service leader so they more focus on services, other leisure group do more focus on technology. Other competitor focus on to produce more fashion product which is led their company. One of the competitor targets to grow market share in leisure industry so blacks should identify objectives of competitor and blacks can create their own objectives which can help to lead blacks goals.
Johan key's model
Leisure industrial market is the mass market but blacks is low end utility group in this market. Blacks relationship with supplier is not too strong. Supplier decide margin between supplier and blacks while which product gives to blacks is decide supplier. Blacks do not know their target group so existing strategy is weak for blacks.
There is no change in blacks marketing strategy blacks has not done any product innovation and blacks have no innovative strategy to become successful one, blacks management do not spending much on product, market research so blacks cannot differentiate with other competitor. If blacks can continues do innovation in every area of business so blacks can achieve their goal.
Blacks is continuously losing their reputation in market because of there is no change in leisure product, poor marketing strategy leasing brand value. There is no implementation of services. This all problem right now faces blacks. Reputation may decrease by loss making division. High amount of lead and there is not strong strategic planning for future. Loosing customer confidence this all criteria affect blacks reputation.
Current financial crisis affect blacks performance. Blacks groups is not doing profitable business. Blacks groups Boardware division increased operating loss. Blacks poor management do not take any strong step going forward. There is lack of confidence in employee. There is no proper strategy for future development and growth.
Blacks can use 7”S” model for resource assessment. Structure, system, staff, strategy, skills, style and shared value. This all inter connected with each other and it is also depend on each other.
If Blacks structure is strong than it give effective result to the company. Blacks structure is shows that blacks management capability. Blacks poor management affect blacks growth. There is no effective system in blacks that lead to the blacks. Blacks employee have no leadership quality. Employee not strongly involve to achieve blacks target. Blacks have no clear strategy to achieve their target. There are lack of skill in blacks and there is no proper style for create differentiation with their competitor. This all thing not doing well in blacks so blacks not sharing value.
O'Neill is not performing well because O'Neill is not producing any innovative sports product. O'Neill continues loss there reputation and brand value. O'Neill does not satisfied customer expectation which resulting increase operating loss. Boardware division as a hall not doing well so blacks should transfer this boardware division to outdoor division. Blacks also face problem in liquidity. It can be possible by selling loss making stores and upgrade existing store to attract more customers. Blacks group try to re treat to core product range which will give positive image to customer. Blacks try to liquidate all the slow product so money can generate by this idea and this money can use in rebuild the product range. Blacks need to reduce cost base and try to reduce working capital. O'Neil product range operating loss in boardware division. Blacks try to compete their product range with competitor by introducing change in O'Neil store.
Customer behaviour is also changing in this competitive market. Customer need good quality product in cheaper price. Blacks can make strong relation with supplier and Blacks can find potential supplier who fulfil Blacks expectation. To do bargaining about product with supplier, Blacks can get advantage of brand image which will help to get strong supplier.
Blacks can increase liquidity by to sell the loss making store or loss making store like freespirit and O'Neil product are not satisfied customer needs. Blacks can reduce margin that reflect the strategic decision to increase promotional activities to drive sales growth. For blacks groups this strategy is more suitable. Blacks can rebuild product by changing their style and fashion trends. Blacks get more encouraging result by giving new to their customer. Blacks can conduct change in O'Neil strategy to promote more online purchase offer and free home delivery with customer get more satisfaction to buy product of blacks group.
Blacks new outlet store doing well so Blacks should increase this store which will increase outdoor shopping for customer. Blacks success is depend on the meeting demand of customer and Blacks group fulfil customer expectation. Freespirit and O'Neil whole sale operation as much decrease and try to focus on collection and O'Neil can give higher discount to customer that store will be closing down. O'Neil also clear loss making store which will decrease the loss of O'Neil and Freespirit.
Blacks try to meet customer expectation and satisfy customer resources by giving incentives or reward in purchase that can be help Blacks future growth. Blacks can reduce extra expense and reducing working capital will help Blacks to achieve desire goal. Blacks can increase internet business sales which are more effective to increase profit margin and decreasing expanse. Blacks and millets may redesign website which is more user friendly so people can easily purchase product.
Critical Success Factor
Blacks can change strategic decision to increase promotional activities to drive sales growth which is more suitable for black to achieve their goals and blacks can developing new outdoor retailing format by changing completely Boardware division. This strategy through company gain fully restricting all loss making outlets to converting profitable outlets. This strategy give new vision and new action plan to gain completion.
Blacks have enough resources to implement this strategy by figure out perfect planning. If resources not available than blacks can generate require resources by Lloyd banking group. Blacks can increase resources by selling unnecessary or older cloths to promoting clearance sale and blacks can generate fund from selling lose making outlets.
Blacks can accept strategic decision to increase promotion activities to drive sales growth which will increase wealth in Blacks and through this strategy blacks can achieve their target. Blacks also notice their presence in market and blacks can improve brand image and black can create differentiate to their customer.
Customer wants change and creativity in new product. Different Leisure group serve same product which decrease customer interest of buying product. Customer expectation also decreases day by day from leisure group.
Blacks should introduce fashionable cloths. To change in product style can possible some of measures as follows:
New product design
Product design can conduct by involving designer to make new product. Blacks can make different product in particular quantity and know the feedback of customer. Product design cannot used before in market.
Costing of product
Product costing by calculating the product final price after adding profit. Product cost can measure through making sample of product and than analysing the product cost. Product cost can in different quality.
Analyse Product marketing
Product marketing can possible by make effective marketing programme which improve customer interest on product.
Product implementation require perfect time to launch product which will increase product sell. If is there any problem in product, to correct it and resend to the market.
Blacks group need good marketing technique to come out from the problems. To do better marketing blacks can do some activities like:
Employee training through employee learn to customer sales and promotion of new product. Employee can learn different techniques which is useful for sale and product knowledge.
Blacks can use effective advertisement to make success in marketing. Blacks can use different types of advertisement medium to do effective marketing.
Online marketing also very effective way to present product by internet. Blacks can use blacks website as well as other popular website can help to do marketing.
Blacks can implement this strategy by doing proper analysis and generating resources which is can implement to involve all the people. Employee and management can increase decisive move to transfer this strategy to increase the productivity.
Upgrading store looks can be help to increase brand image of blacks. Blacks can change their management which will help to increase productivity of Blacks. Reduce gross margin will reflects the strategic decision to increase promotion activities to desire sales.
Blacks can focusing on sales and give effective marketing strategy will help to develop blacks relationship with customer. More innovative idea generation can implement black image and strategy .
Blacks can find power of buyer and increase product variety which is depend on blacks supplier with blacks. Blacks can generate good shopping experience to their customer by improving environment of Blacks store.
The Blacks Leisure Group can use effective marketing strategy to achieve their target and come out these problems. Blacks can reduce their working capital, redesign loss making store or close the loss making store and increase promotional activities to drive sales growth. The Black Leisure Group operates in a highly competitive market. Consequently, the company's environmental dynamics cannot be ignored. Some of the things that the company can do to sustain competitive advantage include offering superior services, outsourcing their inbound and outbound logistic, integrating business units, teaming up with leisure groups to strengthen their buyer power from suppliers, intensifying technological advancements and encompassing the global market more aggressively. All these steps will go a long way in enhancing their position in the market.
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