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Diploma in Business
Unit Number and Title
Unit 7 Basic Tools of Business Strategy
The basic tools of business strategy is to introduce the learners about the basic tools of the business strategy. There are various tools that are needed in the strategic planning in the business like stakeholder analysis, environmental and organisational audits etc. They will learn to applypolicies and techniques in the organisation. It also gives knowledge to evaluate all the possible alternative strategies like substantial growth, limited growth, retrenchment etc. and select the best alternative for the future growth of the organisation. Finally, the learners will learn to compare the roles and responsibilities of the employersfor implementation and evaluation of the strategies. They learn to analyse the requirement of resources and to use them in a way so the optimum utilisation can takes place. They have knowledge to implement the strategies in the organisation. Hence, they are able to make targets and then propose a particular time to achieve the same. It will also help them to monitor and control the strategies in the organisation behaviour.
Business strategy is very important as it defines the dimensions for the operations of an organisation and facilitates the market position also. The businessstrategy acts as a relevant term as it provides a platform to success for an organisation in globalised world. Under this assignment, we learn to use the current scenario of Mulberry that emphasizes the growth and development in the strategic planning of the same.(Boise, 2010)
Vision and mission-The vision of Mulberry is to extend their business and market share and the mission is to improve the brand name. They want to establish their brand name in the global markets. They want to change their mission and vision on a very large scale as they are planning to become the apex brand in the luxury items and products. To achieve this target their strategy is to bring innovation in the organisation without which the luxury items cannot be manufactured. (Child et al., 2005)
Objectives and goals-The main objective of Mulberry is to improve the production of luxury items and products to bring growth and development of the organisation’s position. The scenario which is adopted by them is to lay down special technique of production. There main emphasis is on the best quality which must be provided to the customers so that they remain satisfied for a long period of time.They think that quality is the one thing which should be the priority to produce the luxury products and items to have a sustainable growth in the markets. Therefore, they make the first business strategy on improvement of the quality. (Collier, 2010)
They also put their efforts in financial stability and effective planning procedure to lay down businessstrategy properly. According to Mulberry, the strategic planning is highly affected by the missions, visions, objectives, goals, core competencies. Hence, they put their efforts in improving each of the elements and to achieve the desired goals.(Devlin, 2005)
There are many factors that are responsible in formulating strategic plans of an organisation. Under Mulberry, vision, mission, objectives, and goals needs to be accomplishedto achieve the desired outputs. Without this, a company will not be able to formulate the strategicplans. Hence, the objective is considered as the priority.It sets the direction to the employees according to which the flow of worktakes place. It helps in determining the specific course of actions.(RoAne, 2009)
Some of the other factors in formulating the strategic plans are as follows-
Market condition-A market is a place that is considered as an important factor. It involves-(Hooper, 2013)
Customers- The customers are the back bone of any product. They are the one who are considered as the most important element of planning procedure. The customers and the behaviour of them to purchase any productaffect the strategic planning of any organisation. Thehabits of the customers play a relevant role so the managers have to know the mind-sets of the customers.Mulberry is putting efforts in reading the mind-sets so that they can change their planning accordingto the demand of them. (Child et al., 2005)
Trend and latest fashion-As we know that Mulberry is in a fashion segment so it becomes more important for them to update themselves with the latest trend which is coming into the fashion industry. (Buckley, 2009)
Mulberry uses various effective techniques that help to develop the strategic planning of the organisation. Varioustechniques used by Mulberry are-
Set standards and benchmarks- Mulberry has set certain standards that need to be fulfilled by them. Thestandards are higher and help to motivate the employees to put all of their efforts so that they reach to benchmark set by the employers. These standards are either set through the past performances of the employees or on the basis of performance of the competitors.(Wershing, 2013)
SWOT analysis- The SWOT analysis refers to an analysis of the strength, weakness, opportunities and threatsfor the organisation. After applying this technique, Mulberry is able to analyse all the four relevant factors that can affects the working of it. It helps to compete with competitors. It also results in the fast growth of theorganisation as it is very effective in nature.(Boise, 2010)
BCG growth matrix-It is also oneof the effective technique in developing the business strategies for an organisation. Mulberry has adopted this technique because it provides the information about the product’s position in the market. It helps to identify the performance of the product and service within the market. These markets can be either local or nationalised markets. BCG growth helps to determine the product mix element on any product. (Collier, 2010)
A technique through which the internal assessment of an organisation takes place is termed as an “organisation audit”. It helps to examine the strengths, weakness, opportunities and weakness of the organisation in the market place. An audit helps to identify many other factors also like whether the company is achieving the set standards or not and to analyse the present position of the product etc. It also helps to analyse the financial position of the company. The SWOT analysis is a technique through which Mulberry is doing its audit. The organisational audit according to the SWOT analysis is as follows-(RoAne, 2009)
An audit is a process through which a company is able to study the external environment of the same. It is done by the higher authorities who come and study the internal and external factors that affect the organisation directly or indirectly. An audit also helps to formulate the business strategies that are appropriate for the business. There is an analysis done by Mulberry that is termed as PESTLE analysis. It is implemented in the organisation that helps to study the entire factor affecting it. It comprises of-(Collier, 2010)
Political environment- The environment which affects the policy formulation of export and import is termed as political environment. Under Mulberry, there are very less restrictions imposed which act as an opportunity to the organisation. They have the advantage to expand their business in the countries of Asia. The tax structure is also very reasonable which acts as an opportunity for the Mulberry.(Grant, 2008)
Economic environment- It is related to the monetary terms of the organisation.Mulberry is dealing with the products which are luxury in nature. Hence, the price of the product is also very high which result in decrease in the demand of its product. They have to decrease the price and set a new scheme to decide the price which is genuine and reasonable for the customers.(Sarsfield, 2009)
Social environment- As the trend of the society is changing, the females are adopting the changes and start carrying hand bags, accessories etc. people are becoming more familiar with the brands and even the middle class families are adopting a brand culture. It indicates the development in the market of brands. It also indicates the opportunity Mulberry has to expand their brand name across the boundaries of the Asia.(Devlin, 2005)
Technological environment-Mulberry is adopting the changes coming in the technology. The equipment and machinery are up to date. But still there is a need for continuous development in respect of technology. They have to adopt the new software so that they can reach to global business using internet and IT software. Updated database systems, ERS, MIS, etc. has to be used in the organisation.(Buckley, 2009)
Stakeholder analysis is a technique to understand the roles and responsibilities of the stakeholders within the organisation. In the organisation like Mulberry, strategies are formed to convince all the stakeholders to participate in the management. They play a significant role in the process of strategies formulation. Mulberry needs to understand the importance of the stakeholders at every stage of organisation. It also helps in identifying the capabilities of the employees as they are the only part of organisation who implements the strategic planning into the reality. So, the employees must be potential and capable of performing. (Collier, 2010)
Some of the major significance of stakeholder analysis is as follows-
According to the current scenario, there is a need of Ansoff Matrix that helps Mulberry to focus on the development of market segment and product strategy. In the case of this organisation, there is a requirement to capture some new markets and new customers. As we know that the development of market needs a huge amount of investments. This can be avoided by implementing strategies in a proper manner. (Crainer, 2014)
The alternative strategies are playing a very crucial role as they are providing opportunities to expand the business. They are also giving additional solutions and challenges for the organisation. One of the alternative strategy is market entry strategy that helps the organisation to enter into the new markets. It is very helpful as it provides guidelines to the employers to increase the market shares of their products. This strategy also gives knowledge about how to capture more and more customers and acquire a good position in the market.(Devlin, 2005)
Some of the techniques of market entry strategy are franchising, joint venture, merger, acquisition, etc. These all strategies help business to expand on an international level.
Franchising- A long term relationship between two parties i.e., a franchisor and a franchisee who come into an agreement in which the franchisor gives license to the franchisee to do the business. (Sarsfield, 2009)
Joint venture- A joint venture is an arrangement of two businesses wherebytwo or more parties come together to share the human and natural resources for the accomplishment of some particular task. This task can be a specific project or any other work.(Gregory, 2013)
Merger- A combination in which two running or existing companies come together to share the resources in one title or two is known as a merger.
Acquisition- An acquisition is when a company acquires almost all the assets and liabilities of some other company for its own benefits or for any other reason. It is type of takeover done by the organisations that are large in size.(Wershing, 2013)
The alternatives help to develop a diversification in the business strategies. It helps in integration of all the resources in a way that their utility get maximised. It also helps to cut down the cost of production. Under Mulberry, they use horizontal and vertical integration as it is the most effective process. They establish various distribution channels that help in growth of the product placement. The mulberry produces products that targets the middles class people and also manufactures some low price products which targets the lower middles class. Mulberry has less growth strategy but still they are successful in handling the adverse situation in the market. For mulberry there are fewer options that help to expand the market growth that are innovation, development of market, product development and the trend personal development.(Buckley, 2009)
The study of Mulberry says that the company is doing well but it is not fulfilling the expectations that are desired by the owners of the company. There is growth in this organisation but not a tremendous growth so they need to change the business strategies to acquire such expectations. They need to go back and research on each and every department and make plans according to their desired goals. Under this organisation, the strategy that is adopted is growth limited strategy. Instead of this they should adopt the market development and product development. These strategies will help to focus on both the customers and the competitors. In this way they can develop their focus on both the important departments. (Crainer, 2014)
The main motive of this strategy is to lay down a chance for the company to solve their current issues. As we know that the fashion industries need to be updated and fresh in their ideas to capture the markets. A new product line will help Mulberry to expand their business. The other factors that can help the company are to improve the existing manufacturing units other than focusing on making different strategies. From the last few years, Mulberry was investing in foreign companies that proved a big loss for the company. This money can be invested in the existing factories so that their productivity will be increase. At last we can say that the limited growth strategy will help Mulberry to focus only on the main business instead of diverting into other departments. They should bring stability in their business by adopting the strategy of limited growth.(Wershing, 2013) It is compatible and feasible for the company. These strategies will lead to a frequent and stable growth as the employers have to focus only on certain points. They can now achieve the level of satisfaction by applying such strategies in their organisation. Mulberry is an organisation which manufactures luxury products and items. So, it is a great opportunity for them to expand their business through using fresh ideas. This will also help them to concentrate on important work rather than wasting time and resources on investments and management of them. (Devlin, 2005)
The organisation needs to understand that they required most of the experienced employees in their organisation who are responsible and have the capability to form and implement strategies. Mulberry should give priority to the old and experienced employees who know well about the organisation. The personnel play a major role in the organisation as they are the one who communicate all the planned strategies to their related departments. All the personnel must have a clear understanding of all the strategies that has been formed in the organisation and also knows how to apply the same to the employees. They have the experience to convince the staff to perform better because they have a clear understanding between each other. It helps to lay down a proper procedure of communication between the two that ultimately leads to implementation of strategies. (Gregory, 2013)
The implementation of strategy is also dependent upon the utilisation of resources. This includes arrangement of resources in a way that they are fully utilised. It is done by the personnel of the organisation. They are the one that is responsible in making plans and implement the strategies. There must be a proper allocation of available resources so that the planned business strategy can be implemented. Mulberry is an organisation that has limited resources but their personnel are intelligent enough to arrange them in such way that the utility that acquires is effective and efficient. The personnel are also responsible for controlling the laid down strategies. They should keep track on the working of each employee. There is a need to examine whether the quality of work is according to standards or not. Thus, these are the major roles and responsibilities that are performed by the personnel to accomplish and implement the strategies.(Collier, 2010)
Technological resources-All the equipment and the machineries that are used by Mulberry in production of the fashion products and accessory items are termed as technological resources. In an organisation like Mulberry,it needs highly advanced machinery because they produced luxury items. This could help them to save the cost of production and also the time. Thus, to initiate with the new strategy they should invest on technology like machines and equipment. Example, Stitching machine which is updated (Sarsfield, 2009)
Financial resources- Financial resources are the resource that are not directly helpful in the implementation of the new strategy. These are helpful to purchase raw material, machinery etc. Mulberry require financial resources to pay salary for the staff, maintenance of the same, etc. it helps to make the work easy and less complex. Financial resource can also help to bring stability in the organisation. (Wershing, 2013)
Raw material- As we know that Mulberry is a fashion industry. Raw material is the most crucial and important resource that an organisation needs. Especially, when the organisation manufacturedfashion and luxury items. With some new raw material, they are able to produce new items and products. Thus, they need raw material in a sufficient quantity and also in quality. To satisfy the demand of the customers they should adopt the best quality of raw material.(Crainer, 2014)
Human resources- Human resource is the biggest strength of Mulberry as they are the most creative and innovative part of the organisation. The human resource should be very motivated and disciplined. They should carry a positive attitude towards their work. Under Mulberry, the human resource acts as the identity and their strength. They have good designers and technicians that work together to accomplish the given goals. They possess great potential that will help Mulberry to compete with the rivalries. Hence these are the most important resources an organisation needs.(Devlin, 2005)
The description given by the Mulberry about the SMART targets to achieve the implementation of the strategies is as follows- (El-gammal et al., 2010)
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With the help of this study of business strategy, it has become clear that it is one the relevant part for the development and growth of the entire organisation including Mulberry. Mulberry is an organisation that has to work a lot for achieving the competitive advantage as its competitors do like Gucci, MK, etc. The major learnings that learners will have after studying this are about all the factors that are important for strategic planning in the business. They will also know about the strength, weakness, threats, opportunity that Mulberry possesses. There is one more strategic technique used in the above study which is BCG matrix and PESTLE Analysis. Both are very helpful as they give clear status of Mulberry. There are certain standards and benchmarks that are set by the organisation to achieve a quality in the production of luxury goods. In order to improve the current position in the market, Mulberry applied various alternative techniques and strategies.
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