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Latest trends have made mountaineering and outdoor activities very popular globally. The interest in British has been encouraged as government is encouraging people to get involve in fitness activities, approximately half of the adult population of Britain get in a general activity or vigorous physical activity. The idea is to have adventure and to stay reasonably fit and healthy. Fair number of people is pursuing outdoor activities that interprets that the equipment market is served by a diverse range of specialist companies. The leisure industry is in contrast with the sportswear market which is flourishing on using sportswear for fashion, rather than function; only a diminutive percentage of the products sold by them are used for active sport.
Blacks Leisure Group plc is one of the largest public companies dealing in selling of special clothing and camping apparatus. This is the parent company and it has subsidiaries Blacks, Millets, Free spirit and O'Neill. It trades the outdoor under the fascias Blacks and Millets and board wear under fascias Free spirit and O'Neill. The trade through direct sale internet sites and under brand Peter Storm and Euro hike from stores in British Isles. It is operating throughout the UK, Channel Islands and Ireland. I am required to construct management strategy for the Black's Leisure Group plc, develop measures for vision and objectives of the company and make a plan for the implementation of the defined strategies. Recently the company has faced a major loss from one of its division named O'Neill. The company claims a successful reduction of £5 million in its working capital, but they need to focus on more areas in order to gain the competitive edge over their business rivals. It is essential for Black's Leisure Group to cope up with the modern leisure industry trends to become a dominating market leader.
In 1861, Blacks was founded in Greenock by a seaman and sail maker named Thomas Black. Later it started making light weight tents, known for contribution in making tents for the military in Second World War in 1941 it faced a bomb attack and went out of the business temporarily, came back again with a new manufacturing plant in Glasgow. Black had a good sale in Africa and North America to expand the first foreign subsidiary was opened in Canada in 1958 and then in 1962 the company facilitated distribution in USA by opening a warehouse. The name was changed to Black's Leisure Group plc in 1984 after merging with Greenfields plc. Major achievement for the company was to acquire distribution rights of Fila brand in 1989, after Black launched its Pure Women it sold off Fila license in 2000.In 2009 the company closed down all its O'Neill stores due loss in this division
ü Where is Blacks Leisure Group Plc?
THE PEST ANALYSIS:
It is beneficial for the leisure market that the government has set very strict rules and legislations for the industry; this helps control the particular market. These regulations reduces the possibility of substandard production, like all other policies, imports and exports are being closely monitored this effects the international operation of the company like in North America Africa and Canada. Currently there is no VAT charge for exports and VAT on imports from EU countries has been exempted. European legislation has a collision on this sector includes minimum wages, working hours and imports.
Over all law and order of the United Kingdom is very peaceful and secure as compared to rest of the world it is an attractive tourist spot as well due to its history and natural beauty.
Globalisation has played its role and people are more attracted towards discovering and visiting places all over the world. The group's statistics show that over 400,000 members are participating from UK only.
We see that the social changes are reflected in the life styles and the hobbies of the people leisure activities are becoming more important and the society is now more globalised. The major tends that had an impact on this particular industry is the increasing interest in health fitness and sports that made the outdoor gear and clothing prominent in the leisure market. Families have developed the idea of camping and hiking as spending quality time together this goes in favour of the leisure industry.
The technological advancements have been made in all the leisure products the gear, clothing and foot wear. Making the gear more robust and at the same time convenient and comfortable as well as making more user friendly gadgets. Blacks have to be more vigilant to the demands parallel to the technological advancements and consumer demands. Internet and online sales are convenient for the customers the group has to focus on this aspect of its business to gain competitive advantage.
PORTER'S FIVE FORCES:
According to the Porter's Five Forces the threats to Black's Leisure Group plc are from the following:
BLG has to give its buyers a quality that cannot be overlooked by the buyer, due to the highly differentiated nature of the industry it is easier for the clients to switch. The company has the potential to offer best services with best products to secure clientele.
It is less difficult to entre in to the leisure industry one reason is that, it requires less capital cost and secondly the patent requirements are quite low.
Leisure industry is very aggressive and we see low barriers to entry. If a stake holders leaves he takes a huge stake along especially the investors. Aggressive advertisements from the competitors, price reductions and new products have made this a cut throat competition. Black needs to be more vigilant and forceful in order to maintain its position.
The Company has to research seriously, especially at present to see the threats in future and learn from their past inefficiency in the aspect. We have a good number of substitutes available in leisure industry.
The leisure industry products have various substitutes and this makes the suppliers very powerful in terms of bargaining. The Group is very much dependent on its suppliers in terms of its portfolio. It would be wise if Black's Leisure Group can join hands with its competitors to gain more significance. The instability of the group makes it difficult to switch suppliers at this point when the company is struggling.
Black Leisure Group industry is the Monopolistic Competition the company has been offering superior particular services. It is divided in to two segments:
Outdoor Segment: This deals with the clothing and outdoor gear and equipment. These products come under the Blacks and Millets.
Board Wear: O'Neill and Free spirit represented the division. O'Neill production was ceased from May 2009 due to huge loss.
7-S FRAME WORK for Blacks Leisure Groups plc
Blacks Leisure Group plc's target sector is almost people of all ages and lifestyles the outdoor market has become more attractive to everyone in recent years due to more awareness of healthy life styles. All most every individual is getting more exposed to the outdoor activities which broadens companies target sector. The company has a strong focus on producing quality products, but due to giant retailer's interest in this industry the company has to lower the costs sustaining the quality it is known for, focusing on its strengths the company is trying to exit board wear.
“Core values still hold true today; to offer a comprehensive range of outdoor clothing and equipment at great value for money from friendly, knowledgeable staff.”
Company is the master of its trade in terms of its products quality but unfortunately, the activities vital to its success it is weak at performing for example proper marketing, research management and untrained staff or lack of customer assistance. At this point the company is facing the challenge in terms of pricing while not compromising on quality and to exit the Board wear that has cost £8 million loss and develop the al fresco stores collection.
“In the past four years the chain, which owns Millets, has issued a series of profits warnings, been forced to scrap plans to sell its board wear division and has made little profit.”
Statement taken from Financial Mail May 2009 indicates the naive top management. The processes and procedures for day to day running of the business need to be revised.
Earlier the Group was successful as it withheld key management and attracted employees of high calibre. In recent years few inefficient top managers had contributed to the downfall of the Company. Employees need to be motivated either by giving training or incentives or by applying strong monitoring on the workforce to show better performance.
The popular believe is that the Company follows a centralized structure although there have been many debates on it. Responsibilities have been clearly defined and in the organisational structure the delegation of authority have been established.
I feel that the company should consider more geographically driven sales and try to emphasise more on the mountain areas of the region that drive more tourists and the target groups the company is aiming at.
".... It felt necessary in the circumstances and has suspended the managing director of the Sand city subsidiary, Darren Spurling"
In any business to reach goals and objectives of the company workforce plays a vital role.
Clearly more immediate actions are required to make the staff more vigilant and responsible. The workforce of Blacks Leisure Group plc lacks in motivation and need to be more target oriented that depicts weak scrutiny from the mangers responsible.
CORE COMPETENCIES AND ADVANTAGES
The leisure industry can be classified in to four main categories hospitality, recreation, sports and tourism this multiplicity makes it as one of the most aggressive industry.
We have two types of Competitive Advantages
1- Cost Leadership
Blacks Leisure Group plc still has Differentiation Competitive Advantage over its competitors.
§ A recognised name in leisure industry with decades of experience.
§ It is dealing in a unique industry, producing high quality gear and wears along with few other dimensions that are appreciated by certain target groups.
§ Customers do attribute quality with Blacks products.
§ Stores are located at fine commercial spots.
STRENGTHS, WEAKNESSES, OPPORTUNITIES and THREATS (SWOT)
Strengths and Weaknesses:
The evaluation of Strengths and Weaknesses from a domestic perspective helps understand “who we are and where we are”. Below I have assessed few advantages that Blacks have over their rivals and the some weaknesses that are making the group exposed to threats and less capable to utilize opportunities.
An established name and decades of experience gives distinction to the group the pioneers of the leisure industry and are acknowledged for the quality products. Alliances with very eminent brands like North Face, Berghaus, Peter Storm and Euro hike are in strong favour of the group and do not require much promotion cutting down the costs.
Recent loss from the new division of O' Neill reflects that the top management is not investing in proper market research and at the same time the company has to reconsider its marketing techniques. The brand has not been able to reach the consumers and get the message across effectively. Though the products of Blacks Leisure Group plc are of first-class quality but they have not been able to set up an image of the brand among the new generation effectively.
Opportunities and Threats:
The market trends are definitely in the favour of leisure industry; Olympics adding to the merits, these can be easily exploited by correct approach. Black's stand strong chances of leading the industry with right strategies. Groups like Mountain Rescue, Outward Bond Trust and Ramblers Association have a potential to inspire Blacks Leisure Group plc for future diversifications.
Having powerful competitors like JD Sports Fashion plc & JJB Sports and Snow and Rock Sport ltd. The factors having the potential to lead BLG to a decline are lack of motivation of the work force, inefficiency of the management, improper advertisement and unable to cope up with the modern technology can lead the company to failure.
On the basis of the above Blacks Leisure Group plc SWOT analysis I will further Build on strengths, Resolve weaknesses, Exploit opportunities, Avoid threats.
ü Where Blacks Leisure Group Plc. should be?
Recently National Geographic Store has opened its first store in Europe in Regent Street. I envision that Blacks Leisure Group Plc should run the business in a similar pattern. The company already has a better establishment of the name and quality it only needs to present itself effectively and be in pace with the latest trends, catering different generations. The concept that National Geographic Stores have introduced attracts a range of people which could be of similar effect for Blacks Leisure Group plc
Blacks already have all the equipment to me the major problem of the company is with its presentation skills it's not good at promo ting itself. This will create more awareness of the brand. It will educate people about the group's products and its core ambition of providing outdoor fun with convenience and safety will be enhanced.
At Blacks stores they can set up a small educational camp aimed at children preferably school scouts.
STRETEGIC OBJECTIVES: (Suitable, Feasible and Acceptable)
To be influential in the market it is essential for the group to equip with the modern fashion in the industry, staying well up aware of the competitor's strategies and advantages, up to date with the consumer preferences.
§ Blacks Leisure Group plc must work on the format of the outlook of their stores the display of products and the store itself should be contemporary which would be attractive to a vast age group.
§ The concept of O'Neill was out of the company's expertise the consumers of the company's products are professionals, this particular division was more towards the fashion industry. They must exit the Board wear market in full or hire some people who have expertise in fashion industry.
§ Lower the working capital cost through some new system
§ To find a way for market consolidation.
§ To improve companies IT system and work on internet sale.
“Blacks should give online transactions precedence because this has become a vital part of the marketing environment today.” (Baird, 1994)
ü How Black Leisure Group plc be able to achieve the Objective?
New Product/ Diversification:
Blacks have to pay off the bank in five years due less weak finances it is impossible for the company to invest in best option at this point would be to team up with existing outdoor holiday packages providing companies and provide gear mountaineering, camping, skiing etc a good option of diversification in to paragliding will help the group to capture the wide industry with their existing expertise.
Re organizing a Product Line and Hiring Management with Fashion Expertise:
Humans are very reactive to the latest trends. Instead of completely dissolving the O'Neill Board wear the group can hire experts of the fashion industry and can properly advertise targeting the right group this will promote the product and will give another dimension to the organization.
Staff Training and Advertisement:
Proper advertisement and promotional campaigns of the company's new services and new products (paraglide) will catch the attention of consumer. The stores must create the atmosphere of adventure and staff should be trained to sell the product or services by gaining customers interest.
Developing Appropriate Dissemination Processes to Gain Commitment
. It is inevitable to gain results without team work, for Blacks Leisure Group plc I am following a three step plan of vision creation and dissemination process The three stages would be;
Leaders must be involved with the senior level in the formation of the vision.
At the time of dissemination of the vision a real discussion and contribution should be allowed.
The monitoring of the implementation and its impact must be done well by the leaders.
Leadership and Vision:
Financial incentive and “carrots and sticks” both are less effective than leadership, “Leaders can better effect follower commitment and positive organizational outcomes by exercising three distinct and complementary leadership styles “ (Antonakis and House 2002; 2004)
This style creates more energy, ideas and gives a sense of ownership among the employees.
The trust- ability of a Leader is essential but not enough, to cascade a vision in the organization it is dependent on the influence of the individual on its direct and indirect employees.
Blacks Leisure Group plc leaders can road map for available resource mobilization.
The relevant stakeholders must all have an involvement at this stage the possible image of the company keeping the format of National Geographic Stores in mind to give a clear picture along with any developments with respect to Blacks Leisure Group plc. This will help the team the team to identify any challenges.
Members of leadership must have a sense of ownership to triumph. Key Strategic Initiatives will be identified at this point.
KEY STRATEGY IMPERITIVES (KSI):
Satisfactory performance in few areas of either an individual or an organization that ensures a successful competitive performance is known as CSF or critical success factors. I am going to explain the relevant factors for the Blacks Leisure Group. I am blending the Critical Success Factors for Black plc as I present the Key Success Imperatives for the company.
Black's Leisure Group plc is facing challenges due to its lack of research before taking the license of an O'Neill which was not in its competencies, and has many opportunities at the same time. To remain the market place leader the company must re-evaluate their existing strategies and keep validating there effects on the present and future business circumstances.
For strategy development four key elements are considered,
1. Strategic market place drivers
2. Corporate Strategic Intent
3. Business Design
Keeping the above mentioned in mind I have developed the key strategy imperative for Blacks Leisure Group plc to take benefit of this competitive industry.
I would state this as a company's achievement that its products are seen as of superior quality among its customers. Blacks Leisure Group plc is known for its active sport gear instead of experimenting in to other dimensions they should stick to their expertise and may be diversification in to paragliding be more suitable for the company.
Effective marketing strategies have given a great deal of power to some of the brands which dominate the market even if the product is not as good as what Black has to offer.
Black's strong brand image is its one of its merits but somehow they need better methods to acquire people's attention, efficient promotion better advertisement campaigns will help in this area.
The stores of the company must be renewed and redesigned with a more contemporary style in order to make the displayed items more interesting and visible to catch the attention of customer.
Black can liquidate all slow products and sell the stores. Either they should up market or broader leisure wear business by hiring people with fashion industry expertise.
The representatives, workforce and the top management of the company need to be motivated to represent the brand more enthusiastically and provide enhanced customer care.
Cascading the Key Strategies and Vision in Organization:
We shall set milestones here; on the basis of this we will create a concrete action plan in our next implementation stage.
Below is the set of tasks that Black's Leisure Group Plc should achieve:
§ In five years Pay off Banks
§ New Product/ Diversification
§ Re organize a Product Line
§ Hiring Management with Fashion Expertise
§ Staff Training
Monitoring, Assessing against Objectives:
It is impossible to achieve the objectives if workforce is not target oriented. Scrutiny, reviews and adapting to HR systems & processes will make the workforce stay more vigilant.
A successful derivation of this cascading process will result in a more focused, responsible, supportive, workforce. People could be accountable for their performance instead of combined result.
Hiring expert management and training staff:
All staff will be hired with in the year 2010 till September, so Blacks can move ahead with a better team of professionals.
Reorganizing Product / Diversifying:
Blacks shall reorganize the products by December 2010.
New year A new start within the excitement of the new year 2011 Blacks Leisure Group Plc will start advertising campaigns for their new products.
Re modelling the brand store image:
The group has a huge number of stores all over UK. Remodelling the stores will not be an easy task this will take a time period of two three years to completely remodel the existing store, the project should finish till 2013.
Paying off the bank:
Paying off the banks will require some time Black s Leisure Group Plc target is to pay off the banks over a period of 5 years to that will be till 2014.
Blacks Leisure Group Plc has been through its rough patches due to several reasons, mainly due to inefficient top management, and lack of motivation among the workforce. In this paper after doing a complete analysis of internal and external situations of the company, I can register that Blacks Leisure Group Plc can reach a dominating position in the industry due to its competitive advantages recognition of its brand quality and established name.