BUSI 1633 STRATEGY FOR MANAGERS ASSIGNMENT SAMPLE
1. Introduction
Mad Koffee is a newly established Bangladesh F-commerce company that has gained recent attention while selling T Shirts and lifestyle products. The huge success of the brand lies within the trendy collection and positive quotations on the shirts. The brand also started selling their products into categories such as pillows, notebooks and phone covers by 2019. Being a startup, it initially wanted to cut down the costs and that is why the brand avoided establishing a physical store. The brand started to sell their products on Facebook platform and for the quality and connectivity with the quotes, the brand was promoted by “word of mouth”. The strategy for managers in order to expand the business within a global atmosphere would be elaborated with providing insight about the brand’s strategic position. Moreover, strategic choice to increase the revenue would be elaborately discussed and the choice of market entry mode would be justified as well. Strategic options of internalisation would further be explored in this assignment that would increase the profit margin and reputation of Mad Koffee.
2. Strategic Position
Strategic position of Mad Koffee requires understanding of both internal and external situations so that decisions for internalisation can further be taken using PESTLE, Porter’s Five Forces, SWOT and VRIO framework. Mad Koffee has faced massive backlash from the customers as reportedly the qualities of the t-shirts have worsened as the colour bleeding was found. The Bangladeshi market did not allow for the operational sustainability and the organisation has struggled to compete within the saturated ecommerce market for which global expansion was needed.
PESTLE framework
| Factors | Comments | Impact |
| Political | ● A stable political system has been witnessed within Bangladesh
● Interest, culture and heritage are shared with the neighbouring countries (Sultana and Selim, 2021) ● The Bangladesh government has been found to be flexible to allow FDI ● Trade and e-commerce activities are expected to be improved with maintaining a positive relationship with UK government |
Moderate |
| Economic | ● The country has taken effective initiatives to eradicate poverty as it is one of the fastest growing economy in terms of developing countries
● The government has planned to improve the job openings in the coming future and the unemployment rate in 2022 is 4.70%, a 0.4% decline from 2021 (Macrotrends.net, 2023) ● The GDP Growth Rate in 2022 was 7.10% as compared to the previous year (Worldometers.info, 2023)
● Bangladesh “inflation rate” for 2022 was 7.70%, and it was a increase of 2.15% from 2021 (Macrotrends.net, 2023) |
Moderate |
| Social | ● The country makes up about 2.11% of the world’s total population (Worldometers.info, 2023)
● Bangladeshi population has allowed significant level of internet penetration for product and market development ● Bangladeshi society is established on the hierarchical cultural values and the acceptance of the new product (e.g. phone case, notebook) has increased based upon the connectivity with daily lives |
High |
| Technological | ● Bangladesh has emphasised on the improvement within the IT industry
● The industry has transformed from trade dependent to the technology dependent ● Innovative ideas are supported by the Artificial Intelligence and Virtual Reality within Bangladesh (Iqbal et al. 2021) |
Moderate |
| Legal | ● The safety of employees and customers have become the utmost priority
● The Commercial Documents Evidence Act, 1939 (Bdlaws.minlaw.gov.bd, 2023) ● Minimising the harm of employees have been significantly eradicated with implementing the laws |
High |
| Environmental | ● The waste minimisation and the environmental protection has been focused within Bangladesh
● Bangladesh Environment Conservation Act, 1995 (Bangladeshbiosafety.org , 2023) ● It has emphasised on reducing the environmental harm for the commercial business conduction |
Moderate |
Table 1: Strategic position analysis of Mad Koffee using PESTLE framework
(Source: Created by author)
Porter’s Five Forces
| Factors | Comments | Impact |
| Threat of new entrant | The Bangladeshi e-commerce market is already saturated and many of the brands have already utilised Facebook platforms to promote their products. However, providing the initial cost to start the business might become difficult for the startup (Aldianto et al. 2021). Thus, the threat of new entry is concluded to be moderate. | Moderate |
| Bargaining power of suppliers | Human resources are considered to be the main supplier of ecommerce. Additionally, the raw materials regarding textile determine the final quality and thus, to outsource the products, a huge dependence on suppliers have been found | High |
| Bargaining power of buyers | Considering the internet market, customers have plenty of options to choose from a vast market. Thus, they can choose from the offline market as well, which makes the force higher in this aspect (Hadasik and Kubiczek, 2022). | High |
| Threat of substitute products | Achieving the economy of scale might become difficult upon having the threat of the substitute products. However, the e-commerce industry within the textile business has a moderate threat of substitute products. Thus, the force is moderate in this context. | Moderate |
| Intensity of competitive rivalry | The competition within the ecommerce industry is higher because the market is saturated. The amount of fashion brands that produce shirts and lifestyle products are plenty in numbers and the brand loyalty has also increased as well. Thus, to compete with the market leaders, intensity of the competition has increased as well. | High |
Table 2: Strategic position analysis of Mad Koffee using Porter five force framework
(Source: Created by author)
VRIO analysis
| Resources | Value | Rare | Imitation | Organised | Types of competitive advantage |
| Profit | Yes | No | Yes | No | Temporary competitive advantage |
| Ease of browsing | Yes | No | Yes | Yes | Sustainable competitive advantage |
| Word of mouth promotional strategy | Yes | No | Yes | No | Sustainable competitive advantage |
Table 3: Strategic position analysis of Mad Koffee using VRIO framework
(Source: Created by author)
SWOT analysis
| Strength | Weakness |
| ● Mad Koffee has witnessed extensive reach inside and outside of the Bangladesh with their t-shirts and the lifestyle products
● The brand has ensured that customers have the ease to browse their desired products from plenty of other options (case study, p.8) ● Quick respond to the customer complaints and customer queries have been focused ● Low cost operational approach has been found as conducting business using Facebook did not require any additional charges |
● Technological management has been found to be difficult to manage
● Lack of consumer trust has been found because the false perception regarding the brand in terms of quality has been found (case study, p.7) ● Lack of alignment between the product description in the online platform and the actual quality of the products is the major weakness of Mad Koffee. ● Bangladeshi ecommerce market is already saturated and thus the scope of growth and sustainability is limited |
| Opportunity | Threat |
| ● Flexibility of timely delivery has been emphasised from the organisation’s end
● The brand awareness and the profit margin can be improved with word of mouth strategy ● The brand has an active following of 10,000 people across social media channels for which the brand awareness can be improved (case study, p.8) |
● The competitors were selling the products at a comparatively cheaper price
● Anyone with a Facebook account can conduct the business online (case study, p.8) ● The market of Bangladesh is price sensitive and thus comparing the price with competitors have reduced the product growth
|
Table 3: Strategic position analysis of Mad Koffee using SWOT framework
(Source: Created by author)
3. Strategic Choices
The growth of the revenue needs to be ensured within a competitive sphere and thus choosing the method of execution for the business has been prioritised.
Ansoff’s product/market growth matrix
Market penetration strategy (Existing products in the existing market)
Considering the increase of sales with existing products within the existing market of Bangladesh, the loyalty of existing customer base needs to be increased. It has been found that due to the colour bleeding of t-shirt, Mad Koffee has faced massive backlash on facebook. The negative publicity can further be avoided with considering merger and acquisition with the leading market player and focus on improving loyalty activity needs to be focused. This can further be achieved with providing discounts to the loyal customers and restructuring the pricing of the existing products.
Product development strategy (New products in the existing market)
Improvement of the brand identity can be achieved when the target customer base would expand beyond customers who are aged beyond thirties. Apart from focusing on the t-shirt, Mad Koffee should focus on selling pillows, phone covers, and notebooks with trendy designs to increase the profit margins. This would further help the consumers to feel valued within the brand (Granato et al. 2020). Thus, people would purchase multiple products and their needs would be fulfilled as well.
Market Development Strategy (Existing products in new markets)
Bangladesh e-commerce market is saturated and the scope of growth regarding sustainability is limited. Henceforth, Mad Koffee needs to seek commercial validation while expanding into the new markets where the tshirts, phone cases with meaningful and quirky quotes are high in demand such as the UK and USA (Yun et al. 2019). Thus, demographic and behavioural consideration is needed that can be facilitated with a reputed web presence with the help of adequate payment systems.
Diversification Strategy (New Products to New Markets)
Consideration of a third party organisation to take care of the selling can be used to improve product and profit growth. Thus, expanding the activities across all value chains can be witnessed from the end of Mad Koffee where new product lines would be sold in complete new regions.
TOWS Matrix
| Strengths | Weaknesses | |
| Opportunities | Mad Koffee has it making sure that it provides effective customer service by responding to customer queries and complaints efficiently and timely. Effective customer service can assist a business in retaining customers by encouraging customer loyalty. This can lead Mad Koffee in boosting sales by building a strong organisational reputation and culture. | Mad Koffee has been keeping a focus in implementation of word of mouth strategy. As stated by Kang et al. (2020), as a strategy of marketing in word of mouth a customer shares positive experience with their peers regarding a service or a good provided by a brand. This strategy can provide a huge opportunity for Mad Koffee generating its business without involving additional costs of marketing. |
| Threats | As a threat the competitors have been selling products at a much cheaper price. Accordingly, the approach of low cost of operation by Mad Koffee as a strength can be used for the reduction of external threats such as high market competition. | As lack of consumer trust has been considered as a significant weakness within Mad Koffee the organisation is required to implement strategies that can increase trust among consumers. |
Table 4: TOWS Matrix
(Source: Created by author)
International market entry modes strategies
International market entry strategies assist businesses with the road map in entering into foreign markets. However, as there are different methods and strategies of market entry in the international market it is required for an organisation to choose the best approach based on their target market and goals. In this aspect, an organisation usually is required to choose a strategy based on the type of product they sell along with the product value (Kretschmer et al. 2021). Therefore, Mad Koffee’s three significant strategies of market entry can be exporting, joint ventures and strategic alliances.
Exporting
The strategy of exporting for market entry in the international market involves marketing of the products that are being produced within the countries in which a business intends to sell. However, there are various organisations that involve direct exporting as a market entry strategy in which selling of the product that is being manufactured within the international market takes place without involvement of third parties (Tien and Ngoc, 2019). On the other hand, an organisation can also export immediately by using the services provided by the agent such as International distributors.
Joint ventures
There are various organisations that attempt to minimise the risk while entering within a foreign market by creating joint ventures with other organisations making plans in selling their products within the global marketplace. However, joint ventures involve a combination of two smaller organisations that have the potential in earning higher revenue than individual organisations (Battisti et al. 2022). As a result, both the involved organisations in joint ventures can work together collaboratively in the establishment of a fair business process in the international market.
Strategic alliance
In entering a new market Mad Koffee can implement the strategy of strategic alliance with a local partner. As stated by He et al. (2020), as an international market entry strategy strategic alliance involves making contractual agreements between two or more enterprises for achieving a common purpose. This can help in improving the product line of Mad Koffee nearby development of an edge over competitors.
4. Strategy in Action
SAFe matrix
| SAFe matrix | Strategic option 1 (strategies within Ansoff matrix) | Strategic option 2 (International market entry strategies) |
| Suitability | 5 | 6 |
| Feasibility | 1 | 3 |
| Acceptability | 6 | 2 |
| Total | 12 | 11 |
Table 5: SAFe matrix
(Source: Created by author)
As per the suitability, feasibility and acceptability factors within SAFe framework the strategic option 1 considering the strategies within Ansoff matrix has been gaining a higher score than strategic option 2. This is specifically because as per market or product growth matrix the market strategy has been involving merger and acquisition in increasing customer loyalty of the existing customer base in Bangladesh. As narrated by Debellis et al. (2022), as a strategy joint ventures can be considered as strategies created on a short term basis and mostly for short projects. On the other hand, the strategy of mergers and acquisition can be considered as long term strategies (Aggarwal and Garg, 2022). In addition, as per the product development strategy an organisation involves improving identity of its brand in expansion of target customer base. This requires mad Koffee keeping a high focus on selling other products such as notebooks, phone covers and pillows that can increase profit margins.
As a strategy of market development in which an organisation is trying to expand its existing products with new markets it requires commercial validation. In addition, the organisation has been keeping its focus in diversifying strategies through new products within new markets. Therefore, as per the consideration of SAFe matrix with an increased score in all the three factors of suitability, feasibility and acceptability the strategy of diversification can also be implemented. As stated by Hariyanti, S. and Wardana, (2023), the strategy of product diversification involves diversifying the expansion of products both services and goods, in order to increase the growth of company profits and sales. This is because diversifying the same products or services and selling them within a familiar base of customers can be increasingly less risky for Mad Koffee than some other business growth strategies.
5. Conclusions
It can be concluded that analysing the strategic position of the organisation Mad Koffee in the study has been incorporating both analysis of internal and external situations. This is because the organisation has been facing massive challenges from its customers such as warnings of product quality. Accordingly, the report also involves analysis of the strength and weaknesses of the organisation in order to identify the areas of gap in business operation expansion. The report also involves different market entry strategies by considering the existing lines of products within the market. Additionally, strategies for product development and market development have been also analysed in the study that can help the organisation of Mad Koffee in improving their brand identity. Furthermore, several international market entry strategies have been discussed in this report that can assist an organisation in making an appropriate strategic choice. This can assist Mad Koffee gaining benefits of strategic decision making improving the efficiency within the organisation. As a result this approach can further assist in the mitigation of future challenges.
References
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