Crucial Decisions Made By A Manager Commerce Essay


One of the most important and crucial decisions which a manager has to take during his tenure is about the strategic planning and making long terms plans for attaining the goals and objectives of the organization. The most important step in this concern is that the manager should be clear about the present state of affairs of the organization and should know where he wants to take his organization. The management of every company has to make a critical analysis of the resources available before them and how they want to put use to those resources for the purpose of attaining the market goals to achieve organizational efficiency.

Making strategic plans is one matter and reviewing and monitoring them is another. The market conditions in today's competitive world are very dynamic. The external as well the internal environment of the organization keeps on changing all the time. The efficiency of the management is reflected simply by the fact as to how effectively they have been able to cope up with the changes in the conditions. It is rather impossible to think that the business world today will be without challenges or changes. The important thing is not to averse such kind of challenging situations. The most important thing lies on how the management is able to concentrate on the goals despite of all the deviations faced by them all the time.

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In light of the present situation, where the corporate world has seen so many periods of highs and lows, the importance of strategic management becomes rather important. Recession has taken a toll on the UK's markets for last few months. The markets have seen the worst time ever. In this time, the foundations of the companies have been tested to a great extent. Taking this fact into account, the author is analysing the importance of strategic management by analysing two of the retail sector companies of UK-Primark and Woolworths. Both these companies have been in the UK market for quite some time now. But the fact is, during the last few years, the UK market has seen gradual closure of Woolworths stores all across the nation. The fact that recession has hit the UK market really bad is not something alien. But the important thing is the fact that some companies have survived the scare and some of them have really failed to live in the extreme conditions. We need to analyse as to why some of them have failed, whereas others have sailed with the tide of external environment changes-most specifically recession. (Chandler, 1990)

Meaning of Strategic Planning

In most common words, the term strategic planning could be described as the process of deciding the future. That means an organization must be in such position that the details of the resources it is having today could be analysed effectively to judge their performance in future. In most common sense, it could be said as planning for future which is basically uncertain. Making strategies and ensuring that the resources are put in use in accordance to the plans made. This is one of the common ways to plan out the usage of resources for attaining the objectives of the business. It is all about drafting and implementing the corporate strategies in the business organization. Corporate strategies mean the strategies which are common and distinct to a particular kind of industry. If we see the things in the word of Andrews, he described corporate strategy as:

"Corporate strategy is the pattern of decisions in a company that determines and reveals its objectives, purposes, or goals, produces the principal policies and plans for achieving those goals, and defines the range of business the company is to pursue, the kind of economic and human organization it is or intends to be, and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers, and communities (Morden, 2007)."

We shall be taking into account basic strategic planning of the two companies and individually analysing the recent developments in the field of strategic planning and management. We shall be using some of the basic tools and techniques of strategic management in order to analyse the companies. SWOT analysis and PESTEL analysis will be used commonly. After taking a brief look about what the companies have been doing for past few years, we shall then move towards comparison of their strategic policies and respective outcomes of the policies implemented by the two retail sector giants.

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We shall be taking into account Primark first of all. Then we will be analysing Woolworths and then the comparison and outcome part will be followed.

Primark UK: A Brief Introduction

Primark is a global name and particularly very popular retail sector in UK. It was founded in 1969 and stands today as one of the most popular brands of UK. It employs more than 27500 employees across the nation and has revenues of about 1.95 million pounds for the last year. The store has outlets in some other nations of Western Europe too and hence it could be stated as pretty diversified. (Cooper 2003)

The strategic plans implemented by the management during the past few years were very well drafted and it made sure that the company is in position to sail against tides of recession and other challenges that have been put forward to it. This gives us a chance to have a SWOT analysis of the company:


Huge Brand Name

Goodwill in market


Capable of leading the market


Issues relating labour unrest and exploitation of labour

Depletion in the brand name for last few years


Exploring new markets in the emerging economies

Entering new arenas through rapid diversification

Mergers and alliances are in vogue for retail sector companies


Current economic situation-recession and gradual fall of demand

Growing threats from the emerging retail sector companies, most specifically the small scale stores

Interactive property rights and big brands always are threat for such a company


The strategic planning department of the company has been doing pretty well for all the past few years. The best thing about the planning department has been their capability to adapt with the changing situations. This is perhaps the reason why Primark still exists in the UK market. We shall take a look at the basic outlines of the strategic planning module of the company and its relative performance.

1) The management has always been clear about their vision and missions: The best thing about the strategic planning module of Primark has been the fact that they exactly knew where they were and how the objectives were to be achieved. To be honest, drafting of the vision and mission of the organization is one of the most crucial things in the overall strategic planning process. Having done that, it's important to stick with the drafted statements. This will be discussed later. The missions and vision of the organization shall always be based on realistic assumption and facts. The effort of including something extraordinary is not advisable. The management of Primark always knew their own capabilities as well as the limitations. This is why, the vision and mission statements of the company have been very carefully drafted. (Coulson 2004)

2) Sticking to the missions and visions of the company: the organization has always been clear about the mission statement. Prime mark staff and managers have mission to supply good quality items at cheap prices to offer real value. This is exactly what they have strived at without worrying about the external conditions much. It is always important to have a mission which could be accomplished by introducing and using resources. The vision should always reflect the long term perspective of the company i.e. why the establishment of the company has taken place.

3) Addressing the issues pretty smoothly: Issues do arise during course of business. Primark being included in the retail sector has to deal with certain things which could be tagged as controversies. We can take a few examples:

Work conditions: In 2005, Primark scored the lowest of all leading clothing chains in the UK - at just 3.5 out of 20 - on an ethical index that ranks criteria such as workers' rights and whether they do business with oppressive regimes. The work conditions in the stores were not found out to be the best. In 2008, poor working conditions in Indian factories supplying Primark were the subject of an undercover investigative documentary by the BBC's Panorama. (Fifield 1998)

Child Labour: Primark has got sub contracts with some Indian companies which have found to use child labour in production of textiles. Primark did a fine job of suspending the contracts and saved its image in the eyes of public at large. It hardly matters whether the company knew about it or not, but they could not be directly held responsible for something which is happening in some foreign nation and out of their control. (Oakland 2003)

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Now, the controversies have stood and they are always expected to arise. But the efficiency of the management and strategic planning is reflected by the way these controversies have been handled. Rather than taking them as something extraordinary, the management took the controversies as part of day to day business and handled them the way they would have handled any other business problem. So that made the life much simpler-much for the top level management. (Fleming 2009)

4) Diversification as the key to success: Rather than being rigid, the management followed a policy of introduction of its own brands. The brands that the management introduced during course of time have been successful. Also, the timing of the launch of the brands along with the target customers of the brand has been flawless. The following brands were introduced by Primark during different periods:

Ryan's value Socks

Atmosphere - women swear/footwear

Butler & Webb - Premium formal menswear

Cedar wood State - casual menswear

Denim Co. - women swear, casual men's and children swear

Early Days - baby wear

Girl 2 Girl - young girls wear

Opia - accessories

Rebel Senior - older boys wear

Rebel Junior - younger boys wear

Young Dimension (YD) - older girls wear

Beauty Items - Cosmetics

Home items - home items

Secret wears (women's) - lingerie, women's nightwear

Extra - Basic Cheaper Items

Beach wears - Luggage, ladies beachwear

More the number of brands were introduced in the market; more the goodwill of the company was increased. This means that with rapid diversification and introduction, the management did a perfect act of capturing the right customers at the right time.

5) Sailing along the holding company: Being a subsidiary of ABF plc, Primark has been able to sustain the growth periods over the years. A strategic vision is the image of a company's future - the direction it is headed, the customer focus it should have, the market position it should try to occupy, the business activities to be pursued, and the capabilities it plans to develop. (Peter 1989) In today's era of rapid competition and increasing international trade, it is rather impossible for a company to sustain the growth stories over the years. But along with its holding company, Primark has been able to put the resources at the right places and this is the result which shows the sustainable development of the company over the years:


ABF has been on a ride since 2004 and Primark has taken major advantage of being associated with such a huge brand. At times, being a subsidiary is taken as a negative aspect for a business's growth prospects. But Primark has proved that wrong. The management has shown how to put the resources at the right areas and achieve the desired results.

6) Inventory as resources: An innovative concept: The management of the company has been innovative in their own sense. The decision of taking inventory as part of the overall resources has just ensured them the desired results. Being in the retail sector means that a company has to deal in a number of items. The amount of stock in trade as well as the inventory levels is huge. Hence, the efforts of making inventory as resource and managing that with equal seriousness have just helped them to serve their purpose.

Outcome of the strategic planning: Primark

Primark has been able to deal with the ongoing recession. Though there have been some problems in managing the resources and making sure that the things are going as planned. There have been periods where the management found it extremely difficult to sustain the demand and meeting their targets. But thanks to a wonderful and most importantly a flexible scheme of things, the company has been able to grow and flourish even during the toughest time ever in history. (Pride, Hughes, & Kapoor 2009)

Now we shall be taking into account the second company into consideration: Woolworths. We shall be following a similar pattern of analysis for this company too and then in the end, we shall conclude the overall exercise.

Woolworths UK: A brief introduction:

Woolworths or Wolly's is one of the most popular brands in the retail sector of UK. This company had history of its own. From being once the market leaders and today a defunct company, Woolworths has seen it all. Blame it on the faulty management practices and faulty strategic plans, the doom of the company was sealed long ago.

1) Rigidity in operations: There is no doubt in the fact that the policies and procedures as adopted by Wolly's were outdated. When a business organization is working in such a dynamic business world, the aspect of change management has to be taken into account. The overall process of managing the change effectively and efficiently becomes important. The stores of this company were no doubt favourite of the good old customers, but they failed to attract the youngsters. There is nothing wrong in changing or say rather adapting to the situations. Had they did that at right time, the situation would never been so drastic today. (Robert 2008)

2) Problems and issues in fundamental strategy formulation and implementation: The management failed to understand and analyse the external environment. Even though there were too many hints from the outside about the degeneration of the stores but still, it was not taken into account very seriously. We shall take a look at the following diagram and then analyse the things accordingly:


The prices share of the stores kept on outperforming the index all the time. But the time when the overall index started regaining momentum, the share price just lost its way. Anything going extremes of the index should be analysed deeply and the reasons for such events should be found out. The management of the company failed to comply with this stipulation and paid heavy prices in the end.

3) Recession and the gradual fall in demand: The overall demand of the goods and commodities has fallen over the past few months. This made the life even harder for the management. It was rather impossible for them to sustain the same speed in meeting the expenses and everything just went out of control for them.

Some other chief reasons for the failure are as follows:

In 2001, the company when sold by Kingfisher group was heavily loaded with debt

It did not go for owing the space of stores, rather rented them which increased at the rate of 2.5% pa.

Losses are parts and parcels of every organization. But when the losses are accumulated to 90 millions in a matter of six months, it is for sure that we have got a problem. Accumulating such level of losses in matter of days made it sure that the company was going down. The formal declaration was just few steps away. The financial losses were so huge that there was no chance whatsoever in coming back.

The final blow was much due to self destructing policies followed by the management when the previous boss was kicked out of the company. Trevor Bish-Jones, who contributed highly in the revival of company, could have been a saviour for company under given conditions.

Analysis of the strategic plans:

Both the companies had their own strengths and weaknesses. And the problems faced by both of them were common and similar in more than one way. But the only difference between the two companies has been the efficiency of the strategic plans and their implementation. This meant that Primark, which was flexible and broad in making strategies, was successful whereas Woolworths is now defunct company. (Sheshinski, Strom, & Baumol 2007)

It is important for such companies to manage changes in effective way. Change management could be defined as the latest buzz in management and it includes managing of the factors in such a way that the overall objectives of the business could be attained even in the most dynamic business conditions. It is a all round measure to develop planned measures to manage and analyze the changes which the organization has to face during the day to day working. The main objective of having such a module in the organization is to minimize the risk of failures, which the dynamic business world has got in store for the organizations. Change management is all about dealing with the human aspects in the overall industrial context. Hence it is an integral part of the management philosophy. Change management has become an essential component of management systems today. There has been a buzz in creation of experts who can deal with the expected events

Innovation management should be integral part of strategies of businesses in today's complex business environment. Innovation in most common context could be a creation (a new device or process) resulting from study and experimentation. During the last few years, global trade and international dealings have increased to a tremendous level. The level of complexities in the business has increased to such a level that management always has to find some new ways to add value to the business. The main aim of a finance manager is to maximise the returns available to the shareholders. Hence it is important for him to find newer and innovative ways to add value to overall operations.